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Syntex Corp. v. Lowsley-Williams and Companies11/10/1998
As amended December 9, 1998. There is no change in the judgment. The petition for rehearing is denied.
SYNTEX CORPORATION ET AL., PLAINTIFFS AND RESPONDENTS,
v.
LOWSLEY-WILLIAMS AND COMPANIES ET AL., DEFENDANTS AND APPELLANTS.
Counsel for Plaintiffs and Respondents: Heller, Ehrman, White & McAuliffe Barry S. Levin Jonathan P. Hayden Dale A. Rice A. Mari Mazour Christine R. Saunders Counsel for Defendants and Appellants: Hancock, Rothert & Bunshoft Paul D. Nelson Paul J. Killion Eve F. Lynch Suzanne R. Fogarty Monica M. Slakey
The opinion of the court was delivered by: Walker, J.
CERTIFIED FOR PUBLICATION
(San Francisco County Super. Ct. No. 847212)
Appellants, certain syndicates at Lloyd's of London and 71 London market and foreign insurance companies (London Insurers), appeal the judgment following a jury trial determining that they were responsible for the environmental clean-up costs incurred by Syntex Corporation and its subsidiaries (Syntex). London Insurers contend that the trial court erred by: (1) misinterpreting the pollution exclusion clauses of the 1973-1984 insurance policies providing coverage to Syntex and subsequently denying London Insurers' motion for judgment notwithstanding the verdict (JNOV) based on the pollution exclusion clauses; (2) instructing the jury that the 1970-1973 insurance policy was "triggered" as a matter of law based on allegations in the underlying complaints and claims, and by failing to instruct the jury on Syntex's burden to prove property damage; (3) instructing the jury that Syntex did not expect damage under the 1970-1973 policy unless those persons in Syntex "with the power to bind the corporation" expected property damage; (4) refusing to instruct the jury that property damage is expected under the 1970-1973 policy if Syntex "expected" any degree of damage; and (5) determining that the insurers are obliged to pay "all sums" for the damages resulting from a covered "occurrence" under the 1970-1973 policy, even those damages arising beyond the policy period. We agree with London Insurers that the trial court erred by denying the motion for a JNOV with respect to the pollution exclusion clauses in the 1973-1984 policies, and that the trial court erred by its trigger and burden of proof instructions, its "power to bind" instruction, and its degree of damage instruction. We find no error in the "all sums" ruling. We reverse the judgment against London Insurers with respect to the 1973-1984 policies, and remand for entry of judgment in their favor on these policies. We reverse the judgment against London Insurers with respect to the 1970-1973 policy, and remand for a new trial on the factual issues relating to that policy.
BACKGROUND
I. The Insurance Policies
London Insurers issued excess umbrella insurance policies to Syntex, a California pharmaceutical company, from August 1970 to August 1984. All of the insurance policies contained "occurrence clauses," which provided that London Insurers would, subject to certain limitations and conditions, "indemnify [Syntex] for all sums which [Syntex] shall be obligated to pay by reason of the liability [ ] . . . imposed upon [Syntex] by law . . . [ ] . . . [ ] for damages, direct or consequential and expenses on account of . . . [ ] . . . [ ] . . . Property Damage, [ ] . . . [ ] caused by or arising out of each occurrence happening anywhere in the world, and arising out of the hazards covered by and as defined in the Underlying Umbrella Policies . . . ." "Occurrence" was defined in most of the policies as "an ac
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