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Foster-Gardner Inc. v. National Union Fire Insurance Co.8/3/1998
Massachusetts, Michigan, Minnesota, New Hampshire, and North Carolina, and the Ninth Circuit Court of Appeals (applying Idaho law), have all handed down decisions concluding that a PRP notification letters triggers an insurer's duty to defend under a CGL policy. (Aetna Cas. & Sur. Co., Inc. v. Pintlar Corp. (9th Cir. 1991) 948 F.2d 1507; A.Y. McDonald Indus., Inc. v. Ins. Co. of North America (Iowa 1991) 475 N.W.2d 607; Hazen Paper Co. v. United States Fidelity and Guaranty Co. (1990) 407 Mass. 689 [555 N.E.2d 576]; Michigan Millers Mutual Ins. Co. v. Bronson Plating Co. (1994) 445 Mich. 558 [519 N.W.2d 864]; SCSC Corp. v. Allied Mutual Ins. Co. (Minn. 1995) 536 N.W.2d 305; Coakley v. Maine Bonding and Cas. Co. (N.H. 1992) 618 A.2d 777; C.D. Spangler Const. Co. v. Indus. Crankshaft & Eng. Co., Inc. (N.C. 1990) 388 S.E.2d 557.) Rather than retrace in detail the familiar path that these courts have laid out, I will summarize the main points that I have found persuasive in reaching a Conclusion opposite to the majority's.
Under a CGL policy, the insurer promises to defend any "suit" against the insured seeking damages within the scope of the policy's indemnity provisions. The issue here is whether the term "suit" includes an administrative proceeding that a state agency charged with environmental protection commences by sending to the insured a statutory notification letter identifying the insured as a PRP and ordering the insured to commence the remediation process. The majority's decision that such a notice does not commence a "suit" rests mainly on the proposition that the term "suit" is unambiguous and refers only to a court action commenced by the filing of complaint. (Maj. opn., ante, at pp. 28-29.) Two decisions, one by a Court of Appeal in this state and the other by the Michigan Supreme Court, persuade me that this is not so.
In a 1982 decision joined by Presiding Justice Racanelli and justice Newsom, Justice Elkington had this to say about the meaning of "suit":
"While the term `suit' will ordinarily refer to an action commenced in a court of law, it has often been given a much broader meaning. It is not `essential that the proceeding should be originally instituted in a court.' [Citation.] The word signifies `the prosecution of any claim, demand, or request, and is much broader than the term "action," and may embrace it, but does not define it.' [Citation.] It is `in the nature of an action in court.' [Citation.] ` "Actions" technically applies only to actions at law, since "action" is narrower than "suit," which denotes any legal proceeding of a civil kind brought by one person against another, and includes actions at law and suits in equity.' [Citation.] It may be `given a broad meaning' [citation]; it `is a more general term denoting any legal proceeding of a civil kind' [citation]; and it simply connotes an `adversary proceeding' [citation], or `a process in law instituted by one party to compel another to do him Justice' [citation]. [ ] `Lawsuit' is defined by Webster's Third New International Dictionary (p. 1280) as `any of various technical legal proceedings.' [ ] And the term has expressly been held to embrace arbitration proceedings. ` " uit" is a broad term including arbitration.' [Citations.]" (Taranow v. Brokstein (1982) 135 Cal.App.3d 662, 665-666, italics omitted.)
The Michigan Supreme Court, addressing the same issue that the majority decides, concluded that "suit," as used in a CGL policy to trigger the insurer's duty to defend, does not unambiguously refer only to civil actions commenced in a court. The Michigan Supreme Court's decision includes these relevant observations:
"There is a division of opinion, both within Michi
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