Reliance Insurance v. St. Paul Fire & Marine Insurance

MEMORANDUM **

In this diversity action controlled by California law, Reliance Insurance Company (“Reliance”) appeals the district court’s grant of summary judgment in favor of St. Paul Fire and Marine Insurance Company (“St.Paul”). We have jurisdiction under 28 U.S.C. §§ 1332 and 1291, and we affirm in part, reverse in part and remand for further proceedings. 1 We hold that the district court is to consider St. Paul’s equitable defenses of waiver, estoppel and unclean hands. If none of these defenses applies, the district court is to allocate an appropriate amount of contribution from St. Paul to Reliance.

The district court correctly interpreted the insurance policies as, on their face, making Reliance and St. Paul co-primary insurers of N.L. Barnes Construction (“Barnes”). As the district court found, there is no merit to St. Paul’s claim that “Provision B” of the “Automatic Additional Insureds Endorsement” in Reliance’s insurance policy for Richard Hancock Construction (“Hancock”) transformed St. Paul into an excess insurer.

*541 We conclude, however, that the district court improperly applied Rossmoor Sanitation, Inc. v. Pylon, Inc., 13 Cal.3d 622, 633 , 119 Cal.Rptr. 449 ,…