City of South El Monte v. Southern California Joint Powers Insurance Authority

This appeal involves issues of coverage for members of a joint powers insurance authority. The matter arises from a declaratory relief and breach of contract action seeking a determination of a joint powers authority’s duty to defend and indemnify a member city against a lawsuit for damages caused by the enactment of an anti-noise ordinance.

Defendant and appellant Southern California JointPowers Insurance Authority (Authority) appeals from the summary judgment entered in favor of plaintiff and respondent City of South El Monte (City) on City’s action for declaratory relief and breach of contract.

The question this court must decide is whether the Authority, a self-insuring pool comprised of 35 member cities, must defend and indemnify City for damages that allegedly resulted from the passage of a municipal ordinance. Under the facts of this case, our answer is no.

We find the member cities of the Authority determined the risks of loss they agreed to cover from their pooled funds. The joint powers agreement and the intent of the cities which signed it governed the operation and interpretation of their joint liability protection program. The scope of coverage is defined…