Acme Galvanizing Co. v. Fireman's Fund Insurance

I. Synopsis of Case

Plaintiff and appellant Acme Galvanizing Co., Inc. (Acme), was the insured under an “all risk” commercial insurance policy issued by defendant and respondent Fireman’s Fund Insurance Company (Fireman’s). In February 1982, a steel kettle at Acme’s Stockton plant ruptured, allowing several tons of molten zinc in the galvanizing process to spill onto the surrounding equipment. Acme ultimately submitted a loss claim under the policy to Fireman’s. Following an investigation, Fireman’s denied coverage on the ground the loss was not caused by an external cause, but rather a latent defect or inherent vice and therefore was excluded from coverage under the policy.

Acme, plaintiff and appellant Sheridan C. Randolph (Acme’s president), and plaintiff and appellant Harry L. Randolph filed a complaint against Fireman’s and its insurance agent Joseph L. Taranto and Taranto & Company Insurance Services (collectively Taranto). The complaint stated several tortious causes of action, including “tortious breach of insurance contract” and intentional infliction of emotional distress. Fireman’s filed a cross-complaint for declaratory relief, seeking an adjudication of…