 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Baxter Healthcare Corp. v. California Insurance Guarantee Association12/7/2000
CERTIFIED FOR PUBLICATION
Appellants Baxter Healthcare Corporation (BHC) and Baxter International, Inc. (BII) sought a judicial declaration that the California Insurance Guarantee Association (CIGA) must indemnify them. Appellants paid product liability claims which would have been paid by two insurance carriers, now insolvent, of a predecessor company. We review the trial court's decision de novo (Hunter v. Pacific Mechanical Corp. (1995) 37 Cal.App.4th 1282, 1285; Iverson v. Muroc Unified School Dist. (1995) 32 Cal.App.4th 218, 222) and conclude that it properly granted summary judgment to CIGA.
Facts
Between 1971 and 1984, American Hospital Supply Company (AHSC) manufactured silicone breast implants. In each of those years, AHSC purchased between $75 million and $135 million of general liability insurance to cover product liability claims. AHSC purchased excess insurance from Transit Casualty Company (Transit) and Midland Insurance Company (Midland) during this period. Named insureds under the Transit and Midland policies included AHSC and its subsidiary, associated or affiliated companies, or owned and controlled companies "as now or hereafter constituted . . . ."
In March 1984, AHSC sold its breast implant business to Mentor Corporation while retaining responsibility for product liability claims before the closing date of the sale. Baxter Travenol Laboratories, Inc. (Baxter Travenol) later purchased all of the stock of AHSC. On November 25, 1984, AHSC merged into and was absorbed by Baxter Travenol. Baxter Travenol was the surviving corporation after the merger. On the same day, Baxter Travenol signed a document entitled "Assignment and Assumption" that transferred to Baxter Acquisition Sub., Inc. (BASI) substantially all of the assets formerly owned by AHSC. The Assignment and Assumption stated that the transfer would be " ffective simultaneously" with the merger between AHSC and Baxter Travenol. Also on the same date, BASI changed its name to American Hospital Supply Corporation (AHSCORP).
In December 1986, AHSCORP merged into Travenol Laboratories, Inc. which then changed its name to appellant Baxter Healthcare Corporation (BHC). Eight months later, Baxter Travenol changed its name and became Baxter International Inc. (BII).
Because they had acquired AHSC, BII and BHC were named as defendants in thousands of product liability lawsuits concerning silicone breast implants. In 1994, appellants filed this coverage action against the insurance carriers that sold excess liability insurance policies to AHSC between 1972 and 1984. Prior to the filing of the coverage action, Transit and Midland had been declared insolvent. CIGA was joined as a defendant in their place.
The Guarantee Act
Every liability insurer, as a condition of its authorization to conduct business in California, is a member of CIGA. (Ins. Code, ยง 1063.) "The statutory duty of CIGA is to provide for each member insolvency insurance to pay some (but not all) claims arising out of an insurance policy of an insolvent insurer." (Interstate Fire & Casualty Ins. Co. v. California Ins. Guarantee Assn. (1981) 125 Cal.App.3d 904, 908.)
CIGA is not an insurance company and its duties are not co-extensive with the insolvent insurer's obligations under its policies. (Walters v. California Ins. Guarantee Assn. (1991) 229 Cal.App.3d 1187, 1192-1993.) Instead, CIGA "is a statutory entity that depends on the Guarantee Act for its existence and for a definition of the scope of its powers, duties, and protections." (Isaacson v. California Insurance Guarantee Assn. (1988) 44 Cal.3d 775, 786.) Its authority is limited to the payment of "cover
Page 1 2 3 4 5 California Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|