California Court of Appeal Addresses Horizontal Exhaustion Applied to Excess Coverage

On August 31, 2017, the California Court of Appeal, Second Appellate District, issued its long awaited decision in Montrose Chemical Corp. of California v. Superior Court (Canadian Universal), Case No. B272387.  The issue before the Court concerned the sequence in which an insured may access its excess liability policies to respond to long tail environmental liabilities.

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California’s “Concurrent Proximate Cause” Doctrine Applies Only Where Multiple Causes Of An Injury Operate Wholly Independently Of Each Other

In Evanston Ins. Co. v. Atain Spec. Ins. Co. (May 26, 2017) 2017 WL 2311401, the United States District Court for the Northern District of California revisited the reach of California’s “concurrent proximate cause” doctrine, and reiterated it requires multiple causes of harm to be “completely independent” in order to trigger coverage.

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Ninth Circuit Holds That Diamond Heights Represents Controlling California Law On The Duty Of An Excess Insurer To Accept A Reasonable Settlement

In Teleflex Medical Inc. v. Nat’l. Union Fire Ins. Co. of Pittsburgh, PA (March 21, 2017) 2017 WL 1055586, the Ninth Circuit affirmed a jury verdict in a bad faith case against an excess insurer for rejecting a settlement approved by insured and primary insurer, and refusing to take over the insured’s defense.

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“Other Insurance” Clause Enforced Where Competing Clause Was Ambiguous

In St. Paul Fire and Marine Insurance Company v. Insurance Company of the State of Pennsylvania (N. D. Cal. March 7, 2017), 2017 WL 897437, the district court recently compared “other insurance” clauses in insurers’ excess policies and enforced a clear “excess” clause over a clause in another policy that conflicted with other language in that policy.

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California Court Rejects Excess Insurer’s Contribution Action, Holding That Indemnity Requires Proof Of Actual Coverage And Finding That Vertical Exhaustion Barred Claim

Contribution actions between insurers sometimes blur the distinct and different requirements for proving the duty to defend versus the duty to indemnify.  In the recent case of Advent, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 6 Cal.App.5th 443 (2016), the Sixth District of the California Court of Appeal issued a reminder that it is significantly more difficult to obtain contribution for indemnity than it is for defense.

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BREAKING NEWS: California Supreme Court To Weigh In On Excess Insurer’s Standing To Sue Primary Insurer For Bad Faith Failure To Settle When Excess Insurer Contributes To A Settlement On Behalf Of The Insured

As we have previously reported, there is a split of authority in the California Court of Appeal as to whether an excess insurer has standing to sue a primary insurer for failure to settle a case within its limits when the excess insurer contributes to a settlement on behalf of the insured.

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Ace American Insurance Company v. Fireman’s Fund Insurance Company, 2016 WL 4156686 (August 5, 2016): Primed for Review by the California Supreme Court

A few months ago, we highlighted a split of authority in California on whether an excess insurer can settle a case the primary insurer failed to settle within primary limits and pursue an equitable subrogation action against the primary insurer for the amount paid in excess of the primary limits.  (November 18, 2015, When May An Excess Liability Insurer Sue A Primary Insurer For Failing To Settle A Claim.

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