A-H Plating, Inc. v. American National Fire Insurance

Defendant American National Fire Insurance Company (American National) insured plaintiff A-H Plating, Inc., under a commercial general liability policy. Third parties brought claims against A-H Plating, alleging that it was partly responsible for contaminating local groundwater. A-H Plating requested a defense and indemnity from American National, which rejected the request.

A-H Plating then filed this action for breach of contract, breach of the covenant of good faith and fair dealing, and declaratory relief. American National moved for summary judgment. The trial court granted the motion on the ground that the policy’s “pollution exclusion” precluded coverage. We reverse.

Background

In 1979, A-H Plating commenced electroplating operations at 1837 Victory Place, Burbank, California. It specializes in hard chrome, nickel and cadmium plating, and product engineering and design, primarily for the aerospace industry.

From September 12, 1983, through September 12, 1986, American National insured A-H Plating under a commercial general liability policy. “Coverage D” of the policy required American National “[t]o pay on behalf of the insured all sums which the insured shall…