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Golden Eagle Insurance Co. v. Century Surety Company12/8/2003
72-1173.) In so concluding, the court rejected the insurer's contention that its refusal was correct because the facts determinative of residence--though unknown to the insurer when it declined to defend--nonetheless unequivocally established that the insured and his wife shared a residence at the time of the accident. (Id. at pp. 1174-1175.) The Perkins court stated: "The relevant inquiry . . . is not concerning the facts as they now appear, but the facts as they were known to the insurer at the time coverage was sought." (Ibid.)
As we have explained, the facts before Century when it declined to participate in the defense of the Solemint action did not conclusively preclude the potential for coverage. In view of Mullen and Perkins, Century may not supplement this inadequate stock of facts with facts that it could have discovered, but did not.
Second, MacNaughton's declaration does not preclude the potential for coverage under the Century policy. As Golden Eagle indicated on summary judgment, other facts unknown to Century when it declined to defend Cal Coast raise the potential for policy coverage. Here, Golden Eagle pointed to a list of alleged defects that Solemint submitted during the arbitration in July 1999. Among the alleged defects are undated items that may have arisen well after the completion of the apartment complex, including ponding on roofs, wood damage due to water leaks, loosened nails, and premature failure of water lines. This defect list raises the potential that some damages occurred only within the Century policy period, notwithstanding MacNaughton's declaration. (Horace Mann Ins. Co. v. Barbara B., supra, 4 Cal.4th at p. 1081 ["Any doubt as to whether the facts give rise to a duty to defend is resolved in the insured's favor. [Citation.]"].)
3. Century's Other Contentions
Century also opposed summary judgment on a different basis, namely, that a determination that the damages were continuous and progressive was irrelevant to its refusal to defend Cal Coast under the "excess only" provision. As we have indicated, this provision states: "If other valid and collectible insurance is available to any insured for a loss we cover under [the coverage provisions], then this insurance is excess of such insurance and we will have no duty to defend any claim or `suit' that any other insurer has a duty to defend." (Italics added.)
Century contended that the italicized portion of the provision fell outside the scope of the word "if," and was fully independent of the remainder of the provision. It thus argued that Golden Eagle's admission in Pratali's letters that it was providing a defense to Cal Coast conclusively supported its own decision not to participate in this defense.
The question thus presented is one of policy interpretation. Absent special or technical language, " f the meaning a layperson would ascribe to the language of a contract of insurance is clear and unambiguous, a court will apply that meaning." (Montrose II, supra, 10 Cal.4th at p. 667.) Furthermore, potential ambiguities are resolved, in the first instance, by reference to the insured's objectively reasonable expectations. (Maryland Casualty Co. v. Nationwide Ins. Co. (1998) 65 Cal.App.4th 21, 30.)
Under these principles, we reject Century's proposed interpretation of the "excess only" provision. The basic coverage provisions of the Century policy, as with many CGL policies, obligate Century "to defend any `suit' seeking" damages for "`bodily injury' or `property damage.'" As the court explained in Maryland Casualty Co. v. Nationwide Ins. Co., supra, 65 Cal.App.4th at pp. 30-31, "any limitations on a promised defense duty must be `"conspicuous,
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