Lafarge Corp. v. Travelers Indemnity Co.

MEMORANDUM *

Lafarge Corporation appeals a grant of summary judgment in favor of its excess insurer, Appalachian Insurance Company. We have jurisdiction over this appeal pursuant to 28 U.S.C. § 1291 . We review a grant of summary judgment de novo. See Botosan v. Paul McNally Realty, 216 F.3d 827 (9th Cir.2000). We agree with the district court’s statement of the law, but hold that the existence of a disputed factual issue precluded summary judgment in favor of Appalachian.

Because the parties are aware of the facts in this case, we will not recite them in detail in this decision.

Lafarge first argues that the district court erred in holding that California law requires horizontal exhaustion before an excess insurer is required to defend or indemnify its insured. We disagree. See Community Redevelopment Agency v. Aetna Cas. & Sur. Co., 50 Cal.App.4th 329 , 57 Cal.Rptr.2d 755 (1996).

Lafarge also contends that the language of the Appalachian policy requires only exhaustion of the specifically listed underlying policies, not of all underlying insurance. The Appalachian policy does not limit exhaustion to only listed underlying policies. To the contrary, it requires exhaustion of…

dissenting in part.

The majority relies on Community Redevelopment Agency v. Aetna Casualty and Surety Co., 50 Cal.App.4th 329 , 57 Cal.Rptr.2d 755 (Ct.App.1996), for the proposition that the insured must exhaust the limits of the underlying primary policies for all the years during which a continuing loss occurred, but Community Redevelopment does not go quite so far. Community Redevelopment was not a case about policy limits; it was about a duty to defend. As Community Redevelopment explains, under Montrose Chemical Corp. v. Admiral Insurance Co., 10 Cal.4th 645 , 42 Cal.Rptr.2d 324 , 913 P.2d 878 (Cal. 1995), primary insurers in successive years may, indeed, be hable for contributing to the common defense of a continuing tort claim that spans several policy years. See Community Redevelopment, 57 Cal.Rptr.2d at 761 . This is so because it is unclear at the beginning of the lawsuit which portion of a continuing claim will be covered by any particular policy; it is sufficient that a claim be arguably covered by a policy for the duty to defend to kick in.

Our question is quite different: Does the excess insurer for a particular year avoid liability on a claim arising during a…