City of Mill Valley v. Transamerica Insurance

The City of Mill Valley (City) was the insured under a liability insurance policy written by Transamerica Insurance Company (Transamerica). The City’s appeal is from a judgment denying recovery in its action based upon a claim of liability of Transamerica under that policy.

The uncontradicted background, facts of the case follow. A series of heavy rains, in January 1970, had caused a landslide within the City which brought about substantial property damage to two of the City’s homeowners. The homeowners filed property damage suits against the City on theories of negligence and of inverse condemnation. Following a nonjury trial of the consolidated actions the trial court found, among other things:

The ensuing, and now final, judgment for the homeowners was entered on the theory of inverse condemnation alone.

After satisfying the homeowners’ judgment the City made claim upon Transamerica for indemnification under its policy. The claim was rejected and the instant unsuccessful action against Transamerica, and this appeal, followed.

Transamerica’s insurance policy, as relevant to the appeal, provided: “The company will pay on behalf of the insured all sums which the…