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Foster-Gardner Inc. v. National Union Fire Insurance Co.8/3/1998
gan and among other jurisdictions, regarding the definition of the term `suit,' and its application to nontraditional legal proceedings. Some courts have found that `suit' must refer unambiguously to a court proceeding initiated by a complaint, while others hold that the term may also encompass some non-judicial proceedings.
"In determining what a typical layperson would understand a particular term to mean, it is customary to turn to dictionary definitions. Having canvassed a number of lay dictionaries, we note that most definitions of `suit' do include a reference to some type of court proceeding, e.g., `the act, the process, or an instance of suing in a court of law.' The Random House Dictionary of the English Language (1987). Nevertheless, `suit' is not defined exclusively in those terms. For instance, Webster's New World Dictionary of the American Language (2nd college ed., 1982), provides the alternative definition, `attempt to recover a right or claim through legal action,' while Webster's Third New International Dictionary of the English Language (1964), defines suit as `the attempt to gain an end by legal process: prosecution of a right before any tribunal.'
"The existence of these alternative and more general definitions of a `suit' persuasively suggests that a typical layperson might reasonably expect the term to apply to legal proceedings other than a court action initiated by a complaint. [Citation.] Where the insurers fail to provide otherwise, that commonly understood meaning must prevail." (Michigan Millers Mut. Ins. Co. v. Bronson Plating Co., supra, 445 Mich. 558, 567-569 [519 N.W.2d 864, 869], fns. and italics omitted.)
Another focal point of the majority's decision is the proposition that a PRP notification letter is properly characterized as a "claim" rather than a "suit." The terms "claim" and "suit" both appear in the standard CGL policy, and are used in a way that indicates they are intended to be mutually exclusive. The majority reasons that because "suit" unambiguously refers to a court proceeding initiated by complaint, a PRP notification letter does not commence a "suit," and therefore it must be, by default, a "claim." (Maj. opn., ante, at pp. 28-29, 32-33.) I find this reasoning unpersuasive.
One could just as readily reach the opposite Conclusion by beginning with the term "claim" rather than the term "suit." Focusing on the usual meaning of "claim" in the insurance context, one might conclude that "claim" is unambiguous and that it means a prelitigation demand letter that may be ignored without adverse legal consequences. A PRP notification letter does not satisfy this definition of "claim." As the majority acknowledges (maj. opn., ante, at p. 2), the letter at issue here was sent by an administrative agency, recited the agency's factual findings and legal Conclusions, and ordered the insured to take specific actions. As the majority also acknowledges (maj. opn., ante, at p. 32), failure to respond to this sort of letter has substantial adverse legal consequences, including fines of up to $25,000 per day (Health & Saf. Code, ยง 25359.2) and lost opportunities to contest the scope and cost of the cleanup. It must follow, therefore, that a PRP notification letter is not a "claim" and that, by a process of elimination, it must be a "suit" (or, more precisely, the event that initiates a "suit").
Obviously, resolution of the duty-to-defend issue presented here should not turn on whether analysis begins with the term "suit" or with the term "claim." The correct inquiry, in my view, is which of the two terms - "suit" or "claim" - more aptly describes the PRP notification letter and the administrative process that the sending of t
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