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Ludgate Insurance Co. v. Lockheed Martin Corporation6/28/2000
operated the Burbank site from 1928 to the present."
Because Ludgate admitted knowledge that Lockheed's claims totaled $340 million in indemnity costs and were likely to reach the Ludgate excess policies, for which reason Ludgate initiated this declaratory relief action, and because Ludgate disputed liability under such claims even should the primary policies be exhausted, thereby creating an actual controversy between Lockheed and Ludgate, requiring Lockheed to allege additional facts to establish reasonable probability of exhaustion and actual controversy was superfluous and served no useful purpose. The California Supreme Court has consistently held that "a plaintiff is required only to set forth the essential facts of his case with reasonable precision and with particularity sufficient to acquaint a defendant with the nature, source and extent of his cause of action. [Citation.] If there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend. [Citations.]" (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245.) "The particularity required in pleading facts depends on the extent to which the defendant in fairness needs detailed information that can be conveniently provided by the plaintiff; less particularity is required where the defendant may be assumed to have knowledge of the facts equal to that possessed by the plaintiff. [Citation.]" (Jackson v. Pasadena City School Dist. (1963) 59 Cal.2d 876, 879.) There is no need to require specificity in the pleadings because "modern discovery procedures necessarily affect the amount of detail that should be required in a pleading." (Semole v. Sansoucie, supra, 28 Cal.App.3d at p. 719.)
The fair-notice test is clearly met here. Indeed, this declaratory relief action was initiated by Ludgate itself on Ludgate's assertion and representation to the court that an actual controversy exists between itself and Lockheed relating to their rights and duties under the excess insurance policies issued by Ludgate to Lockheed.
In concluding that Lockheed's fifth amended cross-complaint failed to state a cause of action, the trial court discussed lengthily Lockheed's failure to state in its fifth amended cross-complaint that it was "incorporating by reference" certain exhibits that Lockheed had attached to its fifth amended cross-complaint, even though Lockheed had extensively discussed those exhibits in the body of that amended complaint. The court gave prominent importance to the fact that: "In the first 125 paragraphs of its pleading, Lockheed refers to, but nowhere incorporates by reference, a 4-page list of `London Market Syndicate' numbers . . . ; a 12-page list of names of what it calls `London Market Companies' . . . ; a 1-page chart showing various carrier names, policy numbers and policy periods, entitled `Insurance Policies' . . . ; 2 sets of 2-page charts labeled `allocation models' 1 and 2 . . . and then another one-page chart of carrier names, policy numbers and policy periods, simply entitled `Exhibit G'. In contrast, however, Lockheed specifically incorporates by reference one 8-page chart, again showing various carrier names, policy numbers and policy periods, and entitled `Insurance Policies' . . . . [ ] Significantly, Lockheed's identification of each of these excess carrier cross-defendants is limited to describing their places of incorporation and principal places of business . . . . Lockheed makes no reference to, or incorporation of, the relevant terms and conditions of any cross-defendant's excess policies anywhere within the 101 pages of text of this pleading." The court implicitly concluded that because Lockheed had failed to state that
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