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London Market Insurers v. Superior Court of the City and County of San Francisco2/6/2002
As modified March 6, 2002. There is no change in the judgment. The petition for rehearing is denied.
LONDON MARKET INSURERS, PETITIONERS,
v.
THE SUPERIOR COURT OF THE CITY AND COUNTY OF SAN FRANCISCO, RESPONDENT; KAISER ALUMINUM AND CHEMICAL CORPORATION, REAL PARTY IN INTEREST.
(City and County of San Francisco Super. Ct. No. 312415)
The opinion of the court was delivered by: Swager, J.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 977.
This writ proceeding arises out of an insurance coverage dispute related to asbestos bodily injury claims. Kaiser Aluminum & Chemical Corporation (Kaiser) sued Certain Underwriters at Lloyd's, London, and Certain London Market Insurance Companies (collectively, the London Insurers), among other insurers, seeking indemnity under excess policies issued to Kaiser in connection with lawsuits alleging asbestos-related bodily injury.
The London Insurers and Kaiser both filed motions for summary adjudication of the meaning and application of an exclusion incorporated by reference into an excess policy in effect from January 1, 1967, to February 1, 1970. The exclusion, which the parties call the 36-month clause, provides that the policy does not apply under coverage for personal injury and employers' liability "to bodily injury by disease unless prior to thirty-six months after the end of the policy period written claim is made or suit is brought against the Insured . . . ."
The London Insurers argued that the 36-month clause clearly and explicitly limited all personal injury liability coverage to claims made within 36 months after the policy expired, i.e., by February 1, 1973, and that they had no duty to indemnify Kaiser under the policy because none of the claims for which it sought coverage were brought within that period. Kaiser argued that the clause applied only to claims by its employees.
The trial court granted Kaiser's motion and denied that of the London Insurers. The court reasoned that the term "bodily injury by disease" was ambiguous, both in isolation and when considered in the context of the entire policy. To resolve that ambiguity, the court considered extrinsic evidence submitted by Kaiser, which was uncontroverted. That evidence consisted of a declaration by an insurance expert stating in part that the term "bodily injury by disease" is customarily understood in the industry to apply to claims arising out of injuries sustained by the insured's employees.
The London Insurers filed a petition for writ of mandate in this court challenging the trial court's ruling, and we issued an order to show cause. Having reviewed the pleadings and the record and having heard oral argument, we discharge the order to show cause and deny the writ petition.
DISCUSSION
A. The Policy
The policy at issue is an excess umbrella policy that contains a "following form" provision, incorporating by reference the terms, definitions, exclusions, and conditions of an underlying policy issued by the Insurance Company of North America (INA). Therefore it is the meaning of the INA policy that is in dispute. That policy begins with the following insuring clause.
"INSURING AGREEMENT
"Coverage A - Personal Injury Liability
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