APPEAL from a judgment of the Superior Court of Los Angeles County. Malcolm H. Mackey, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC379039).
The opinion of the court was delivered by: Ashmann-gerst, J.
CERTIFIED FOR PUBLICATION
In this opinion we resolve the following issue: Did the addition of subdivision (c)(13) to Insurance Code section 1063.1*fn1 abrogate Denny's Inc. v. Workers' Comp. Appeals Bd. (2003) 104 Cal.App.4th 1433 (Denny's)? The answer is no. We therefore conclude that the trial court properly invoked the Denny's rule when it granted summary judgment and concluded that the appellant City of Laguna Beach (City) cannot obtain reimbursement from respondent California Insurance Guarantee Association (CIGA) under section 1063.1, subdivision (c)(13). Though that provision renders the obligation of an insolvent excess workers' compensation insurer a "covered claim" that CIGA must ordinarily reimburse, CIGA need not reimburse a permissibly self-insured employer for benefits paid to an employee for cumulative injury if the employer's liability is based in part on a period of time when the employer was self-insured and chose not to buy excess insurance for the particular risk.
The judgment is affirmed.
Continental Casualty Company (Continental) issued a workers' compensation policy to the City providing coverage from May 1, 1998, to May 1, 1999. The policy was excess to the City's $275,000 self-insured retention and covered cumulative injury only if it first manifested during the policy period. Reliance National Indemnity Company (Reliance) issued a workers' compensation policy to the City for the period May 1, 1999, to July 18, 2001. This policy, too, was excess to the City's $275,000 self-insured retention. But it differed from Continental's policy in that it was triggered by cumulative injury if the last date of exposure to the conditions causing the disease occurred during the policy period.
A City employee filed a workers' compensation claim for cumulative injury from 1986 to June 18, 1999. The case was resolved in 2001, but the employee reopened the case in 2003 to seek more benefits. The City incurred workers' compensation liability that exceeded its self-insured retention and sought reimbursement from Continental. In addition, because Reliance was insolvent, the City sought reimbursement from CIGA. Continental and CIGA both determined that they did not have to pay the City's claim.
The City sued CIGA and Continental and requested a declaration that they owe the City reimbursement. CIGA filed a motion for summary judgment or summary adjudication. It argued that the City's self- insured status and the Continental policy constituted other insurance under section 1063.1, subdivision (c)(9) and therefore CIGA had no statutory obligation to pay any portion of the benefits that were due under Reliance's policy.
According to the trial court, the City bore the burden of proving the nonexistence of other insurance but failed to meet its burden. The trial court granted CIGA's motion and entered judgment.
This timely appeal followed.
We review summary judgment de novo. (Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6.) In assessing whether the trial court properly granted summary judgment, the pivotal question presented is whether the City's claim is a covered claim under section 1063.1, subdivision (c)(13) or barred under subdivision (c)(9) because its self- insured status qualifies as other insurance. The City contends that section 1063.1, subdivision (c)(13) clearly applies to this case, and that the trial court's reliance on Denny's is unexplainable. In particular, the City posits that section 1063.1, subdivision (c)(13) specifically abrogated Denny's. What the City fails to appreciate is that the reach of section 1063.1, ...