San Diego Unified Port Dist. v. Landmark Ins. Co. ( 2020 )

FILED
NOT FOR PUBLICATION
JUN 15 2020
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
SAN DIEGO UNIFIED PORT No. 19-55409
DISTRICT,
D.C. No.
Plaintiff-Appellee, 3:15-cv-01401-BEN-MDD
v.
MEMORANDUM*
LANDMARK INSURANCE COMPANY,
Defendant,
and
NATIONAL UNION FIRE INSURANCE
COMPANY OF PITTSBURGH, PA,
successor-in-interest to Landmark
Insurance Company,
Defendant-Appellant.
Appeal from the United States District Court
for the Southern District of California
Roger T. Benitez, District Judge, Presiding
Argued and Submitted June 2, 2020
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: LIPEZ,** RAWLINSON, and N.R. SMITH, Circuit Judges.
National Union Fire Insurance Company of Pittsburgh, PA (“National
Union”) appeals the district court’s summary judgments in favor of San Diego Port
District (“the Port”) granting declaratory relief. We have jurisdiction pursuant to
28 U.S.C. § 1291; we reverse and remand.
1. The district court erred in determining that the umbrella/excess policies were
ambiguous thereby imposing a duty on National Union to defend claims and
indemnify the Port for losses stemming from non-litigated disputes, including costs
resulting from agency orders requiring the Port to remediate and abate
environmental contamination and pollution. The language of the umbrella/excess
policies “governs” because it is “clear and explicit.” See Cty. of San Diego v. Ace
Prop. & Cas. Ins. Co., 118 P.3d 607, 612 (Cal. 2005) (quoting Bank of the West v.
Superior Court, 833 P.2d 545, 552 (Cal. 1992)). The central insuring provisions in
the umbrella/excess policies provide coverage only for “damages.” See id. at
614–16. Similarly, National Union’s duty to defend only extends to “suit[s],” but
National Union retains “the right”—but has no obligation—to investigate,
negotiate, or settle “any claim or suit.” Cf. CDM Inv’rs v. Travelers Cas. & Sur.
**
The Honorable Kermit V. Lipez, United States Circuit Judge for the
First Circuit, sitting by designation.
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Co., 43 Cal. Rptr. 3d 669, 672–73 (Ct. App. 2006). Nothing in the umbrella/excess
policies—including the “continue in force as underlying insurance” language in
Endorsement 2—obligates National Union to defend or indemnify expenses or
claims unrelated to “suits” and “damages.” Thus, coverage under the
umbrella/excess policies is limited to “damages,” i.e., liabilities assessed against
the Port within the context of a lawsuit.
2. The district court erred in holding the umbrella/excess policies were
ambiguous thereby containing no aggregate limit of liability for property damage
losses. Multiple provisions in the umbrella/excess policies clearly and
unambiguously contemplate a general aggregate limit for covered losses, including
the endorsement entitled “Ultimate Net Loss Limit of Liability Amended”
(Endorsement 2), Item 3(B) on the declarations page, and the “Limit of
Liability–Retained Limit” section of the base policy. The Port seeks to sidestep the
clear and unambiguous language in those provisions that the umbrella/excess
policies contain a general aggregate limit by pointing to the italicized portion of the
following language in Endorsement 2: “in respect of each occurrence—subject to a
limit as stated in item 3(B) of the declarations in the aggregate for each annual
period during the currency of this policy, separately in respect of products liability
and in respect of personal injury . . . by occupational disease.” However, the only
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reasonable interpretation of Endorsement 2 is that general covered losses,
including property damage (or environmental contamination) claims, are subject to
a per-policy cap of $20 or $50 million, depending on the respective policy, and that
separate aggregate limits in those same amounts apply to products liability and
personal injury by occupational disease claims. Cf. Garamendi v. Mission Ins. Co.,
31 Cal. Rptr. 3d 395, 408–10 (Ct. App. 2005). Thus, the umbrella/excess policies
contain a general aggregate limit in the amounts noted above for each policy
period, and the policies contain separate aggregate limits for products liability and
personal injury by occupational disease.
REVERSED and REMANDED.
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