Court Opinion

ID: 9493381
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:06:29.579685+00
Date Added: 2024-06-11T17:55:48.571401
License: Public Domain

BEEZER, Senior Circuit Judge,
dissenting:
KF Dairies had absolutely no connection whatsoever with the properties in question during the policy period, from July 1, 1972 to January 1, 1976. Nevertheless, KF Dairies contends that Fireman’s owes it a duty of coverage because the properties that it subsequently acquired turned out to have contamination that might date back to the policy period.
This case boils down to a single question of state law: does a general liability policy provide coverage for liability arising out of real property purchased by an insured after the policy expired? The California Court of Appeals has twice answered this question in the negative. See A.C. Label Co. v. Transamerica Ins. Co., 48 Cal. App.4th 1188, 1193, 56 Cal.Rptr.2d 207, 210 (1996); see also FMC Corp. v. Plaisted & Cos., 61 Cal.App.4th 1132, 1154-56, 72 Cal.Rptr.2d 467, 480-81 (1998).
In A.C. Label, the court held that “[(liability insurance coverage cannot be created after the fact. The coverage provided by [a comprehensive general liability] policy [is] not triggered during the policy period” when the insured has “no connection to or nexus with the damage caused by contamination that occurred on the subsequently acquired property during the policy period.” 48 Cal.App.4th at 1194, 56 Cal.Rptr.2d at 210. Although the court in A.C. Label may have unnecessarily reached the issue of the parties’ expectations in light of the “unambiguous” conclusion, I believe it did so solely in an effort to bolster the conclusion it had already reached, namely, that an insured’s liability must occur during the policy period.
In FMC Corp., the court reached the same conclusion, holding that “a complete factual predicate for a liability subsequently imposed by law must exist during the policy period.” 61 Cal.App.4th at 1155, 72 Cal.Rptr.2d at 480. The court further recognized that “it is neither reasonable nor consonant with the terms of the general liability policies before us to require [ ] insurers to cover liabilities based on facts which did not occur until after the policy period.” Id.
I am convinced that the California Supreme Court would agree with the answer reached by the California Court of Appeals in AC. Label and FMC Corp. See Nelson v. City of Irvine, 143 F.3d 1196, 1206-07 (9th Cir.), cert. denied, 525 U.S. 981, 119 S.Ct. 444, 142 L.Ed.2d 399 (1998) (“[W]here there is no convincing evidence that the state supreme court would decide differently, a federal court is obligated to *929follow the decisions of the state’s intermediate appellate courts.”).
The court’s opinion today requires that liability for subsequently-acquired properties be explicitly excluded from casualty insurance policies. I would affirm the decision of the district court because the policies at issue never included such coverage in the first place.