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Golden Eagle Insurance Co. v. Century Surety Company12/8/2003
lled "continuous injury" or "multiple" trigger, under which coverage is triggered for all policies in effect during the periods.
Pratali's letter stated: "As you know, the California Supreme Court now has conclusively determined that `the continuous injury trigger of coverage['] should be adopted for third party liability insurance cases involving continuous or progressive deteriorating losses. . . . [ ] Based upon our initial information, the property in question was built in or around 1989. In addition, the damages are alleged to be continuous and progressively deteriorating in nature. [ ] Therefore, we believe that each of your companies has a duty to participate in the defense of the insured along with Golden Eagle."
On January 28, 1999, Cal Coast also sent a copy of the arbitration demand to Century by fax through its broker. The cover sheet stated: "Please process the attached claim A.S.A.P. We need a claim # and adjuster name and phone number, also. Your prompt response is appreciated." No other information regarding the arbitration demand accompanied Cal Coast's submission of the arbitration demand.
On January 29, 1999, Anthony Signore, a claims manager for Century, informed Cal Coast by letter that Century had received the demand "under a Montrose II tender." Singore's letter cited the "excess only" policy provision, stated that the policy provided excess coverage under the circumstances, and told Cal Coast that it would defend and indemnify Cal Coast only when primary coverage had been exhausted. On March 2, 1999, Signore sent a similar letter to Golden Eagle.
On behalf of Golden Eagle, Pratali again wrote to Century Surety on April 2, 1999, and asserted that Century had a duty to defend Cal Coast. Pratali's letter states in pertinent part: "Based upon our initial information, and according to our insured, the property in question was built in or around 1992. The insured did the framing for the project. In addition, the damages are alleged to be continuous and progressively deteriorating in nature."
On June 25, 1999, Signore responded that Century denied any duty to defend or indemnity until underlying coverage was exhausted. Thereafter, Century never paid any funds to defend or indemnify Cal Coast.
Golden Eagle spent $20,632.52 in providing a defense for Cal Coast in the Solemint action. Cal Coast ultimately agreed to pay $540,000 to settle this action, of which Golden Eagle provided $196,000. Three other insurers also contributed settlement funds.
On May 25, 2000, the Golden Eagle appellants initiated the underlying action against Century for subrogation, contribution, indemnity, and declaratory relief, and the parties subsequently filed cross-motions for summary judgment, or in the alternative, summary adjudication. Golden Eagle's motion contended that (1) Century had a duty to defend Cal Coast because there was a potential for coverage under its policy at the time of tender, and (2) the "pro rata" provision in Golden Eagle's policies, rather than "excess only" provision in Century's policy, was applicable to Cal Coast's claim.
Following a hearing on January 31, 2002, the trial court concluded that Century had breached its duty to defend Cal Coast, and it was obligated to indemnify Golden Eagle. Judgment in favor of Golden Eagle and against Century was filed on May 7, 2002, pursuant to a stipulation regarding damages.
DISCUSSION
Century contends that the trial court erred in granting summary judgment. It argues that under the circumstances of this case, the "excess only" provision in its policy limited coverage to excess coverage, and thus it had no obligation to defend
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