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Foster-Gardner Inc. v. National Union Fire Insurance Co.8/3/1998
76, 1081; Buss v. Superior Court, supra, 16 Cal.4th at p. 49 [insurer "cannot parse the claims, dividing those that are at least potentially covered from those that are not"].)
3. Out-of-State Authority
While the issue of whether environmental agency activity prior to the filing of a complaint is a "suit" within the meaning of a CGL policy is one of first impression in California, numerous other state and federal courts have considered this question. These cases have arisen as a consequence either of underlying CERCLA proceedings, underlying state proceedings pursuant to statutes modeled after CERCLA (similar to the HSAA), or both. Essentially three approaches have evolved, generally referred to as the literal, functional, and hybrid approaches.
a. The "literal meaning" approach
Under the "literal meaning" approach, the term "suit" is deemed unambiguous, referring to actual court proceedings initiated by the filing of a complaint. When no complaint has been filed, there is no "suit" the insurer has a duty to defend. (Lapham-Hickey Steel Corp. v. Protection Mutual Ins. Co., supra, 655 N.E.2d at p. 847 [word "suit" is unambiguous, and its plain meaning requires the filing of a complaint in a court of law before an insurer's duty to defend is triggered]; Ray Industries, Inc. v. Liberty Mut. Ins. Co., supra, 974 F.2d at p. 761, original italics [Term "suit" has a "plain and unambiguous meaning" that excludes PRP letters, because a "suit" is "an attempt to gain an object in the courts. The term refers to formal legal proceedings, as opposed to demands and other tactics that, however powerful, are not enforced by a court of law."].)
In addition to the plain meaning of the term "suit," some courts find support for their Conclusion in the connection between the filing of a complaint and the duty to defend. Generally the issue of whether an insurer's duty to defend has arisen is determined by looking to the allegations in the underlying complaint and comparing these allegations to the policy provisions. (Lapham-Hickey Steel Corp. v. Protection Mutual Ins. Co., supra, 655 N.E.2d at p. 847 [" he duty to defend extends . . . not to allegations, accusations or claims which have not been embodied within the context of a complaint."]; City of Edgerton v. General Cas. Co. of Wisconsin, supra, 517 N.W.2d at p. 477.) "These references to the `complaint' clearly indicate that insurers generally contract to defend suits filed in a court, rather than mere allegations or threats." (Ray Industries, Inc. v. Liberty Mut. Ins. Co., supra, 974 F.2d at p. 763.) Where there is no complaint, there is no "suit" against which the insurer can defend. (Lapham-Hickey Steel Corp. v. Protection Mutual Ins. Co., supra, 655 N.E.2d at p. 847.)
Moreover, many courts note that the standard policy language differentiates between a "claim" and a "suit." "If all of the policy's language is to be given effect, then the words `suit' and `claim as used within [the policy] must have different meanings. . . . While [the insurer] has the power to investigate any claim, it has the duty to defend only suits. If the word `suit' was broadened to include claims, in the face of policy language which distinguishes between the two, any distinction between these two words would become superfluous." (Lapham-Hickey Steel Corp. v. Protection Mutual Ins. Co., supra, 655 N.E.2d at pp. 847-848; Ray Industries, Inc. v. Liberty Mut. Ins. Co., supra, 974 F.2d at p. 762 [court construed the term "suit" narrowly in order to maintain policy distinction between "suit" and "claim"].)
Other courts conclude that interpreting "suit" to mean an action initiated by the filing of a complaint recognizes th
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