Fireman's Fund Insurance v. Superior Court

In Foster-Gardner, Inc. v. National Union Fire Ins. Co. (Cal.App.), Division Two of our court held that an insurer’s duty to defend any “suit” includes a duty to defend an administrative “claim.” In the case now before us, we reach the opposite conclusion.

Background

From 1971 to 1985, Vickers Incorporated was insured by Fireman’s Fund Insurance Company under four comprehensive general liability (CGL) insurance policies, all of which included the following language: “The Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of . . . bodily injury or . . . property damage to which this insurance applies, caused by an occurrence, and the Company shall have the right and duty to defend any suit asainst the insured seeking damages on account of such bodily injury or property damage . . . and may make such investigation and settlement of any claim or suit as it deems expedient, but the Company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the Company’s *1208 liability has been exhausted by payment of judgments or settlements.” 1 (Emphasis…

I agree Fireman’s Fund had no duty to defend, in that the Environmental protection Agency’s (EPA) orders did not emanate from a suit. I do not agree, however, that the definition of “suit” is limited to proceedings in a court of law tried by a judge or jury. As noted in Webster’s Third New International Dictionary (1993) page 2286, column 3, “suit” is not only “an action or process in a court for the recovery of a right or claim,” but it may include “the attempt to gain an end by legal process,” or “prosecution of [a] right before any tribunal.” (Italics added.) While a court undoubtedly is a tribunal, additionally a tribunal is a “forum of justice” *1222 and may consist of any “person or body of persons having authority to hear and decide disputes so as to bind the disputants” or who “decides or judges” a matter and “determines or directs a judgment or course of action.” (Id. at p. 2441, col. 1.) In my view, therefore, the common, ordinary meaning of “suit” is broad enough to cover alternative dispute resolution proceedings such as adjudicatory administrative hearings without resort to the “functional equivalent” approach to contract interpretation (Mich. Millers Mut. Ins. v.…

Rodi, Pollock, Pettker, Galbraith & Cahill, Tim G. Ceperley, John F. Cermak, Jr., Los Angeles, Cooper, Walinski & Cramer, Joseph P. Thacker and Terrell A. Allen, Toledo, OH, for Real Party In Interest.

MIRIAM A. VOGEL, Associate Justice.

In Foster-Gardner, Inc. v. National Union Fire Ins. Co. [*] (Cal.App.). Division Two of our court held that an insurer's duty to defend any "suit" includes a duty to defend an administrative "claim." In the case now before us, we reach the opposite conclusion.

From 1971 to 1985, Vickers Incorporated was insured by Fireman's Fund Insurance Company under four comprehensive general liability (CGL) insurance policies, all of which included the following language: "The Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of ... bodily injury or ... property damage to which this insurance applies, caused by an occurrence, and the Company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage ... and may make such investigation and settlement of any claim or suit as it deems expedient, but the…