City of Oxnord v. Twin City Fire Insurance Co.

The City of Oxnard (Oxnard) appeals the judgment in favor of respondents Twin City Fire Insurance Company (Twin City) and First State Insurance Company (First State). Oxnard had sued respondents for breach of contract and bad faith in failing to contribute to its defense in another action. We affirm the judgment.

Facts

Since 1975, Oxnard has maintained a self-insured, third party liability plan along with other liability insurance policies.

Under the policy issued by Twin City in effect from August 1983 to September 1984, Oxnard had a $100,000 self-insured retention (SIR) for each occurrence. Under the policy issued by First State in effect from September 1984 to October 1985, Oxnard maintained a $200,000 SIR. Each policy expressly stated that only “excess” coverage was being provided, and such coverage was only available after Oxnard became legally obligated for a loss in excess of its retained limit or SIR.

In 1987, Oxnard was named a defendant in two lawsuits collectively called the Dunes Action. This action alleged personal injuries and property damage occurring over a 20-year period as a result of the development of a subdivision on the site of a former waste oil…