United States District Court, N.D. California
ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY
JUDGMENT AND GRANTING DEFENDANT'S CROSS-MOTION FOR
SUMMARY JUDGMENT RE: DKT. NOS. 57, 63
HAYWOOD S. GILLIAM, JR. United States District Judge
the Court are Plaintiff Scottsdale Insurance Company's
(“Scottsdale”) and Defendant Hudson Specialty
Insurance Company's (“Hudson”) cross-motions
for summary judgment. See Dkt. Nos. 57, 63.
Scottsdale, an excess insurance provider, asserts claims for
equitable indemnification and subrogation against Hudson, a
primary insurance provider, for allegedly failing to
contribute the full amount required under the primary policy.
Hudson contends that it made a complete payment under the
terms of the primary policy.
Civil Local Rule 7-1(b) and Federal Rule of Civil Procedure
78(b), this motion was deemed suitable for disposition
without oral argument. Having carefully considered the
parties' arguments, the Court DENIES Scottsdale's
motion for summary judgment, and GRANTS Hudson's
cross-motion for summary judgment for the reasons set forth
a dispute between an excess and a primary insurance carrier
regarding the amount of their obligations to resolve a claim
settled with the insured. The Court first discusses the terms
of the primary and excess policies, before discussing the
underlying lawsuit, its settlement, and the structure of the
insurance payments under that claim. Unless otherwise stated,
the following facts are undisputed. See Dkt. Nos. 1
The Primary Insurance Policy
Parking Services, CA, LLC (“Priority Parking”)
leased a parking garage located at 1040 Sacramento Street in
San Francisco, California (“Brocklebank Garage”)
from Nob Hill Properties (“Nob Hill”) on or about
May 2, 2005. Compl. ¶¶ 10-11. Nob Hill assigned its
leasehold interest to Fritz Property Group, Inc.
(“Fritz”) on or about July 31, 2008. Id.
provided primary liability insurance to Priority Parking for
the period from May 1, 2011, to May 1, 2012 (“Primary
Policy”). Id. ¶ 13; Dkt. No. 60, Ex. 1.
The Primary Policy included commercial general liability
coverage. Dkt. No. 60, Ex. 1 at POLICY0014-28. Section I of
the commercial general liability coverage form within the
Primary Policy set forth three separate and distinct types of
coverage: (1) Coverage A Bodily Injury and Property Damage
Liability (“Coverage A”); (2) Coverage B Personal
and Advertising Injury Liability; and (3) Coverage C Medical
Payments. Id., Ex. 1 at POLICY0014-20. Of these
coverage agreements, only Coverage A is now at issue.
A covered bodily injury claims as follows: “[Hudson]
will pay those sums that [Priority Parking] becomes legally
obligated to pay as damages because of ‘bodily
injury' . . . to which this insurance applies.”
Compl. ¶ 14. Coverage A applied only if the bodily
injury was caused by an “occurrence” that took
place in the “coverage territory” during the
policy period. Id. ¶ 15. “Bodily
injury” included “bodily injury . . . sustained
by a person[.]” Id. ¶ 16.
“Occurrence” included “an accident.”
Id. ¶ 17. The Brocklebank Garage was in covered
territory. Id. ¶ 22.
endorsement,  the Primary Policy included an additional
provision entitled “Parking Operations Errors and
Omissions Liability” (“Parking Operations
E&O”). Dkt. No. 60, Ex. 1 at POLICY0042. Its
endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
Under SECTION I - COVERAGES
COVERAGE A BODILY INJURY AND PROPERTY DAMAGE
Id., Ex. 1 at POLICY0042. Beneath that preamble, the
endorsement stated: “Insuring Agreement is amended to
include: [subpart] e. [Hudson] will pay those sums [Priority
Parking] becomes legally obligated to pay as damages because
of any negligent act, error or omission during the policy
period arising out of [Priority Parking's] parking
operations.” Compl. ¶ 18. The terms
“negligent act, ” “error, ” and
“omission” were left undefined. Id.
Primary Policy also included a set of “Common Policy
Declarations” that preceded the commercial general
liability form discussed above. Dkt. No. 60, Ex. 1 at
POLICY0002-06. On the “Liability Coverage”
declarations page, there were four tables set forth under
different headings. Id., Ex. 1 at POLICY0005. Under
the heading “Commercial General Liability” and
the subheading “Limits of Insurance, ” the
declaration set a coverage limit of $1, 000, 000 for
“each occurrence.” Id., Ex. 1 at
POLICY0005. Under the heading “Parking Operations
Errors and Omissions” and the subheading “Limits
of Insurance, ” the declaration set a coverage limit of
$1, 000, 000 for “each claim.” Id., Ex.
1 at POLICY0005.
III of the commercial general liability agreement provided
that the “Limits of Insurance shown in the Declarations
and the rules below fix the most [Hudson] will pay regardless
of the number of: (a) Insureds; (b) Claims made or
‘suits' brought; or (c) Persons or organizations
making claims or bringing ‘suits.'”
Id., Ex. 1 at POLICY0022. The rules below that
clause provided two terms relevant to this dispute. First:
“The General Aggregate Limit is the most [Hudson] will
pay for the sum of: Medical expenses under Coverage C;
Damages under Coverage A[;] and Damages under Coverage
B.” Id., Ex. 1 at POLICY0023. Second, as
Subject to [the General Aggregate Limit], the Each Occurrence
Limit is the most [Hudson] ...