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Foster-Gardner Inc. v. National Union Fire Insurance Co.8/3/1998
a strictly technical and literal analysis controlled the `suit' issue. Neither the term `suit' nor the term `claim' is defined in the policies. The terms must therefore be construed in favor of the insured, to the extent consistent with objectively reasonable expectations. Although the proceedings commenced by the Determination and Order clearly do not constitute a traditional lawsuit in a court, neither do they constitute a mere claim which can simply be ignored -- without adverse effect -- until a traditional lawsuit is filed. The true nature of HSAA `Superfund' proceedings lies somewhere between a traditional lawsuit in a court and a traditional claim or pre-suit demand which has no effect until enforced by a lawsuit in a court. AIU teaches that ambiguities of this sort, produced by the combination of new schemes for remediating pollution plus undefined terms used in standard CGL policies, are to be construed against the insurer."
Soon after, a different division of the same district Court of Appeal reached the opposite Conclusion. (Fireman's Fund Ins. Co. v. Superior Court, supra, 57 Cal.App.4th 1252, review granted Dec. 23, 1997 (S065447) (Fireman's Fund).) In Fireman's Fund, the court considered whether United States Environmental Protection Agency (EPA) notices that the insured, Vickers Incorporated, was a potentially responsible party (PRP) in a Comprehensive Environmental Response, Compensation and Liability Act action (CERCLA) (42 U.S.C. § 9601 et seq.), as amended by the Superfund Amendments and Reauthorization Act, 42 United States Code section 9601 et seq., constituted a "suit." The court held that the words at issue were clear and unambiguous, and that the insurer had no duty to defend the EPA notices. The court stated, "Foster-Gardner's failure to consider the threshold issues -- the plain meaning of `suit' and `claim' and whether those terms are ambiguous -- is fatal to its analysis and to its decision to rewrite an insurance policy to afford coverage where none was purchased."
We granted the insurers' petition for review in this case. We subsequently granted plaintiff Vickers Incorporated's petition for review in Fireman's Fund, supra, and deferred further action pending consideration and Disposition of the related issues here.
II. Discussion
A. Background
1. Relevant HSAA Procedures
Whenever DTSC "determines that there may be an imminent or substantial endangerment to the public health or welfare or to the environment, because of a release or threatened release of a hazardous substance," it has three options. (§ 25358.3, subd. (a).) Generally, in August 1992 and currently it could (1) " rder any responsible party or parties to take appropriate removal or remedial action necessary to protect the public health and safety and the environment," as was done in this case; (2) " ake or contract for any necessary removal or remedial action"; or (3) " equest the Attorney General to secure the relief as may be necessary to abate the danger or threat" in the superior court in the county in which "the threat or danger occurs." (§ 25358.3, subd. (a)(1)-(3), as amended by Stats. 1989, ch. 1032, § 21, pp. 3576-3577; 3 Manaster & Selmi, Cal. Environmental Law & Land Use Practice, supra, § 55.02 , pp. 55-13-55-14.) Here, DTSC chose the first option.
Currently, but not in August 1992, the HSAA expressly provides that "the responsible party [shall be given] an opportunity to assert all defenses to the order." (§ 25358.3, subd. (a)(1).) These defenses are limited, and include acts of God, war, or a third party, the innocent landowner defense, and the statute of limitations. (§ 25323.5, subd. (b); § 25360.4; 3 Manaster &
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