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Scottsdale Insurance Company v. National Union Fire Insurance Company of Pittsburgh1/30/2002
Ordered not published May 1, 2002.
SCOTTSDALE INSURANCE COMPANY, PLAINTIFF AND RESPONDENT
v.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA ET AL., DEFENDANTS AND APPELLANTS
APPEAL from the Superior Court of San Bernardino County. Keith D. Davis, Judge. Affirmed. (Super.Ct.No. SCVSS58683)
Haight, Brown & Bonesteel, Roy G. Weatherup, Stephen M. Caine; Sedgwick, Detert, Moran & Arnold, Lawrence E. Picone and Kathleen Caswell Vance for Defendants and Appellants. Luce, Forward, Hamilton & Scripps, Rex Heeseman and David R. Krause-Leemon for Highlands Insurance Company as Amicus Curiae on behalf of Defendants and Appellants. Selman-Breitman, Neil Selman, Anthony L. Cione and Gregory J. Newman for Plaintiff and Respondent.
The opinion of the court was delivered by: Richli, J.
NOT FOR PUBLICATION
OPINION
"Other insurance" clauses direct how liability is to be allocated among multiple insurers who are liable on the same risk. The drafters of such clauses are engaged in a game of "hot potato": each insurer is trying to shift as much of the risk as possible to other insurers, well aware that they will be trying to shift it back again. When faced with conflicting "other insurance" clauses, the courts ordinarily "split the potato" - that is, they dole out the risk in more or less equal portions to each of the participating insurers.
The new twist in this case is that plaintiff Scottsdale Insurance Company (Scottsdale) used two different "other insurance" clauses. One purported to apply to the duty to indemnify; the other purported to apply to the duty to defend. Moreover, the clause applicable to the duty to defend was made an integral part of the statement of that duty. Thus, it provided that Scottsdale "shall have the right and duty to defend any suit against the insured, seeking damages which are payable under the above Insuring Agreement . . . , provided, however, that no other insurance affording a defense or indemnity against such a suit is available to the insured." (Capitalization omitted.) By contrast, defendants National Union Fire Insurance Company of Pittsburgh, Pennsylvania (National) and American International Specialty Lines Insurance Company (American) each used a standard "other insurance" clause, which applied solely to the duty to indemnify.
At least three lawsuits - which we must assume, for purposes of our opinion, involve covered claims - have been filed against the parties' common insured. National and American have stepped up to the plate and defended; Scottsdale has refused to defend. In this action, on cross-motions for summary judgment and summary adjudication, the trial court ruled that Scottsdale had no duty to contribute to National and American's defense costs.
We will assume, without deciding, that Scottsdale's "other insurance" clause regarding its duty to defend is governed by the same rules of law as "other insurance" clauses in general. Thus, we do not reach Scottsdale's contention that, because it engrafted this clause onto its promise to defend, the clause is part of the insuring grant and hence not subject to these rules.
We will hold that this case does not involve conflicting "other insurance" clauses. Scottsdale's "other insurance" clause is therefore enforceable, unless it leaves the insured less than fully protected. As we read Scottsdale's clause, so long as National, American, or any other insurer has a duty to defend, Scottsdale does not; but if and when every other insurer's duty to d
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