Dana

MEMORANDUM AND ORDER (AMENDED)

I. BACKGROUND

Western World Insurance Co. (“Western”) filed this action for declaratory relief on November 5, 1990 seeking declarations that it owes no duties of defense or indemnity to any defendant with respect to two liability insurance policies it issued to defendants Clifford and Dora Dana (“the Da-nas”) for property located in Collinsville, California (“the Collinsville site”). The parties have filed counter-motions for summary adjudication which are now before the court. Jurisdiction is based on 28 U.S.C. § 1332 (diversity) and the court applies the law of the forum state. Ah Moo v. A. G. Becker Paribas, Inc., 857 F.2d 615, 620 (9th Cir.1988). Because the insured property is located in California, the court applies California law. See e.g., Insurance Co. of Pa. v. Associated Int’l Ins., 922 F.2d 516, 520 (9th Cir.1990).

A. The Undisputed Facts.

For purposes of these motions, the parties agree to the following undisputed facts. Since 1969 counter-claimant and defendant Catellus Development Corporation (“Catellus”) has leased the Collinsville site to the Danas. Beginning in 1981, the Da-nas sublet a portion of the property including a barn…