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Evanston Insurance Co. v. North American Capacity Insurance Co.

United States District Court, E.D. California

July 8, 2014

EVANSTON INSURANCE COMPANY, an Illinois corporation, Plaintiff,
v.
NORTH AMERICAN CAPACITY INSURANCE COMPANY, a New Hampshire corporation, Defendant.

ORDER REGARDING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT

ANTHONY W. ISHII, Senior District Judge.

I. Introduction

This action arises from a dispute regarding the scope of Defendant North American Capacity Insurance Company's ("NAC") responsibility to provide legal defense for Berry & Berry, Inc. ("Berry & Berry"), construction and development company mutually insured by Plaintiff Evanston Insurance Company ("Evanston") and NAC. Evanston contends that NAC had a joint responsibility with Evanston to defend Berry & Berry against claims arising from the matters within the scope of the liability policies. NAC claims that no duty to defend was triggered because Berry & Berry failed to pay the required $10, 000 per-claim Self-Insured Retention Endorsements ("SIR Endorsement"). NAC filed a motion for partial summary judgment pursuant to Federal Rule of Civil Procedure 56. For the following reasons, NAC's motion will be granted.

II. Background

Evanston issued three consecutive commercial general liability policies to Berry & Berry. The policies collectively covered the period from July 1, 2002 until July 1, 2005. Doc. 2 ("Compl.") at ¶ 7. The policies provided that Evanston would "pay those sums that [Berry & Berry] becomes legally obligated to pay as damages because of bodily injury' or property damage' to which this insurance applies." Compl. at ¶ 7. Evanston also had the "right and duty to defend any "suit" seeking those damages." Compl. at ¶ 7.

NAC issued two consecutive commercial general liability policies to Berry & Berry. Those policies collectively covered the period from July 1, 2000 to July 1, 2002. Section I of both policies provide that NAC "will pay those sums that [Berry & Berry] becomes legally obligated to pay as damages for bodily injury or property damage to which th[e] insurance applies." Declaration of Counsel in Support of Motion for Summary Judgment, Exhibit 1 ("Doc. 16") at p. 24; Exhibit 2 ("Doc. 16-1") at p. 30. According to the first policy NAC also has "the right and duty to defend any suit seeking those damages." Doc. 16 at p. 24. The first policy goes on to specify that NAC's "duty to defend is excess over and shall not contribute where the insured has any other insurance under which, but for the existence of this Policy, any other insurer is obligated to provide a defense." Doc. 16 at p. 24. The second policy provides that NAC "will have the right and duty to defend any suit seeking [bodily injury or property damages which the insurance covers], unless an insured has another policy of insurance which obligates another insurer to provide a defense, in which case, [NAC's] duty to defend is excess." Doc. 16-1 at p. 30.

Both NAC policies contain SIR endorsements which provide in relevant part:

The self-insured retention (retained limit) applies to each and every claim made against you, regardless of how many claims arise from a single occurrence or are combined in a single suit, and the company has not duty to defend you unless and until the amount of the retained limit has been exhausted by payment of settlements, judgments, or claims expense. (claims expenses do reduce the retained limit)

* * *

In the event of a conflict between any of the terms, conditions or provisions of the policy and this endorsement, this endorsement shall control the application of insurance to...
* * *
(B) The "retained limit" for each and every claim arising as the result of an "occurrence"... shall be: [¶] $10, 000.00 [¶] regardless of the number of claims from a single occurrence, suits brought or the number of claims incorporated into one such suit.

Doc. 16 at p. 13; Doc. 16-1 at p. 24 (emphasis original).

Both NAC policies define "claim" and "claims" ...


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