Court Opinion

ID: 9751851
Source: CourtListenerOpinion
Date Created: 2023-08-28 17:10:12.857663+00
Date Added: 2024-06-11T09:43:08.806785
License: Public Domain

PREMO, Acting P. J.
I dissent.
The question presented by this case is simply stated: for purposes of the duty to defend, does a 1981-1982 comprehensive general liability (CGL) policy cover plaintiff for a 1987 suit alleging 1981-1982 groundwater contamination cleanup liability unknowingly transferred to and assumed by plaintiff via a 1984 purchase of real property?
The majority focuses on plaintiff’s purchase of the real property and misconstrues plaintiff’s contention into a claim that an insurer should be hooked “after the fact.” It then makes new law in pronouncing that, for CGL coverage to be triggered, an insured must be theoretically liable during the policy period. It then gives as the rationale for this new law no more than the reasonable-expectation-of-coverage rule of construction. I disagree with this focus and analysis.
CGL policies insure people, not property. Thus, the focus in a CGL coverage case is on the insured, not the insured’s property. Plaintiff’s purchase of the real property in question is therefore, at best and if necessary, a secondary part of a coverage analysis.
As in any type of coverage case, the analysis whether coverage exists in this case necessarily begins with the words of the coverage clauses. Here, the clauses are the same standard clauses that were at issue in Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645 [42 Cal.Rptr.2d 324, 897 P.2d 1]. The court therein settled the meaning of the clauses: “We find no ambiguity in this language; it clearly and explicitly provides that the occurrence of bodily injury or property damage during the policy period is the operative event that triggers coverage.” (Id. at p. 668.)
It follows that there is no ambiguity in the coverage clauses before us. Thus, there is no reason for the majority to employ a rule of construction to *1196interpret the clauses. (Montrose Chemical Corp. v. Admiral Ins. Co., supra, 10 Cal.4th at p. 667.) Since there is no question that there was an occurrence during the policy period in this case, the policy affords plaintiff coverage.
Admittedly, the facts of this case are unusual. At first blush, a result favorable to plaintiff can be taken as imposing ex post facto liability upon defendant. But after closer scrutiny, I am convinced that literal application of the coverage clauses to the facts of this case makes perfectly good sense.
First, plaintiff’s policy is a CGL “occurrence policy.” It insures for unknown liabilities that may occur even after expiration of the policy. The coverage is essentially open-ended so long as the injury or damage occurs during the policy period. This open-ended coverage is paid for by the higher premiums that go with occurrence-based coverage as distinguished from the limited coverage and lower cost of a CGL “claims made” policy. (Montrose Chemical Corp. v. Admiral Ins. Co., supra, 10 Cal.4th at p. 689.) In 1981-1982, plaintiff therefore paid defendant a higher premium for the security of open-ended 1981-1982 liability coverage. In accepting the higher premium, defendant accepted more risk—making an educated guess about its exposure at best, falling far short of the mark at worst. (Id. at p. 664.) Thus, as between plaintiff and defendant, defendant rather than plaintiff agreed to assume the risk of unusual facts.
Secondly, Montrose adopted the multiple-trigger-of-coverage theory to third party claims of continuous or progressively deteriorating damage or injury. This theory holds that “bodily injuries and property damage that are continuous or progressively deteriorating throughout successive policy periods are covered by all policies in effect during those periods.” (Montrose Chemical Corp. v. Admiral Ins. Co., supra, 10 Cal.4th at p. 675.) Given that courts will generally apply equitable considerations to spread the cost among the several policies and insurers (id. at p. 687), defendant is in a better position than plaintiff to minimize the impact of the unusual facts.
I would reverse the judgment and remand with instructions to overrule defendant’s demurrer and grant leave to answer.
A petition for a rehearing was denied August 16, 1996, and appellants’ petition for review by the Supreme Court was denied October 16, 1996. Mosk, J., and Kennard, J., were of the opinion that the petition should be granted.