Legarra

Plaintiffs Domingo and Katherine Legarra brought a declaratory action seeking to establish defendant Federated Mutual Insurance Company’s duty to defend and indemnify them in connection with a demand by the California Regional Water Quality Control Board for certain response costs for groundwater contamination on their property. Defendant successfully moved for summary judgment on the basis there was no potential for coverage under the policy. Plaintiffs appeal, contending the pollution exclusion in the policy does not apply and there is separate coverage under the personal injury provisions of the policy. We affirm.

Factual and Procedural Background

The Legarras acquired a property in Weaverville through a judicial foreclosure in 1986. The property had been used as a petroleum bulk plant. The Legarras entered into negotiations to sell the property to Glenn Robinson. During the negotiations, Federated Mutual issued a liability policy to Robinson covering the property. Mr. Legarra was named as an additional insured under the policy. The sale to Robinson did not go through.

The policy issued by Federated Mutual to Robinson provided coverage for bodily injury liability…