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Amerifloor Technical2/25/2003
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
Appellant Amerifloor Technical, Inc. (Amerifloor) was insured under a commercial general liability policy (CGL) issued by respondent The Travelers Indemnity Company of Illinois (Travelers). The California Division of Occupational Safety & Health (DOSH), after investigating an incident in which Amerifloor employees were injured, issued 11 safety violation citations to Amerifloor and assessed penalties for each violation. Travelers declined to provide Amerifloor with a defense in the DOSH proceeding or to indemnify it for the penalty assessments. Amerifloor filed this action against Travelers, asserting Travelers' refusal to defend and indemnify breached its obligations under the CGL.
The trial court granted Travelers' motion for summary judgment, concluding the DOSH proceeding did not seek "damages" and was not a "suit" as those terms are defined in the CGL, and entered judgment for Travelers. Amerifloor appeals, arguing the trial court erroneously granted Travelers' motion for summary judgment.
I. FACTUAL AND PROCEDURAL BACKGROUND
A. The Policy Provisions
The CGL policy providing coverage to Amerifloor during the relevant period stated:
"[Travelers] will pay those sums that the insured becomes legally obligated to pay as damages because of ['bodily injury ,' 'property damage,' 'personal injury,' or 'advertising injury'] to which this insurance applies. We will have the right and duty to defend the insured against any 'suit' seeking those damages. However, we will have no duty to defend the insured against any 'suit' seeking damages for ['bodily injury,' 'property damage,' 'personal injury,' or 'advertising injury'] to which this insurance does not apply."
The policy defined "suit" to mean:
". . . a civil proceeding in which damages because of 'bodily injury ,' 'property damage,' 'personal injury,' or 'advertising injury' to which this insurance applies are alleged. 'Suit' includes: [ ] a. An arbitration proceeding in which such damages are claimed . . .; or [ ] b. Any other alternative dispute resolution proceeding in which such damages are claimed . . . ."
B. The DOSH Proceeding
During the effective period of the CGL, three of Amerifloor's employees were working for Amerifloor at a client's location when they were injured by an explosion caused in part by the use of methlyethlyketone (MEK). After an investigation, DOSH issued a Citation and Notification of Penalty citing 11 separate violations (with related subparts) relating to Amerifloor's use of MEK. DOSH assessed civil penalties against Amerifloor pursuant to Labor Code section 6317 in the amount of $20,500. Although there is a dispute whether Amerifloor timely tendered to Travelers the defense of the DOSH proceeding, Travelers denied that the CGL obligated it to defend Amerifloor in the DOSH proceeding or to indemnify it for the civil penalties.
C. The Present Lawsuit
Amerifloor's suit alleged Travelers was obliged to defend Amerifloor in the DOSH proceeding and to indemnify it for the penalties levied by DOSH, and that Travelers' refusal to do so breached its contract and violated the covenant of good faith and fair dealing. Travelers moved for summary judgment, arguing there was no potential indemnity obligation for the DOSH penalties because (1) unde
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