Harman

In this diversity action for declaratory relief, the plaintiffs seek to forestall a cancellation of two insurance policies covering two family structures located at 666 Beachcombers Road and 669 Sea Point Lane, located in the area known as Portuguese Bend Club, Portuguese Bend, California. This area is southerly of Los Angeles and westerly of the City of San Pedro.

The defendant issued fire insurance policies on the abovementioned structures and included in said policies a provision insuring, among other risks, said premises against “All Physical Loss”.

Both policies were in effect during the fall of 1956, when a massive and continuing land movement commenced in the Portuguese Bend area, affecting a large number of properties, including the two aforementioned. Damage was first noted by the insured in October 1956. The company inspected the properties in November and December of 1956, and again in January 1957. Damage was substantial and continuous. By January 26, 1957, the damages were estimated by the company at over $4,500 to 666 Beachcombers Road, and about $2,000 on Sea Point Lane. On January 20, 1957, with full knowledge of the existing land movement, the company issued…