701 F.2d 95 (9th Cir. 1983), 82-5350, National Union Fire Ins. Co. of Pittsburgh, Pa. v. Argonaut Ins. Co.

Docket Nº:CA No. 82-5350.
Citation:701 F.2d 95
Party Name:NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, Plaintiff-Appellant, v. ARGONAUT INSURANCE COMPANY, Defendant-Appellee.
Case Date:March 08, 1983
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 95

701 F.2d 95 (9th Cir. 1983)

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH,

PENNSYLVANIA, Plaintiff-Appellant,

v.

ARGONAUT INSURANCE COMPANY, Defendant-Appellee.

CA No. 82-5350.

United States Court of Appeals, Ninth Circuit

March 8, 1983

Argued and Submitted Jan. 7, 1983.

Stephen A. Lax, Pachter, Gold & Schaffer, Los Angeles, Cal., for plaintiff-appellant.

Michael J. Cereseto, Buchalter, Nemer, Fields, Chrystie & Younger, Los Angeles, Cal., for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before CHAMBERS and FARRIS, Circuit Judges, and PRICE, [*] District Judge.

FARRIS, Circuit Judge:

Plaintiff National Union Fire Insurance Company of Pittsburgh, Pennsylvania, appeals from a grant of summary judgment to defendant Argonaut Insurance Company in an action on an insurance contract. We affirm.

FACTS

In February 1975 certain events in Texas gave rise to claims against United Rent-All, Inc., National's equitable subrogor, which it eventually settled for $1,540,000. Commerce and Industry Insurance Company, United's primary insurer, contributed to the settlement to the limit of its coverage, $300,000, subject to a $10,000 deductible. National contributed the remainder pursuant to its umbrella liability policy providing coverage of $5,000,000 in excess of underlying coverage of $300,000.

Page 96

National then sued Argonaut, contending that at the relevant time Argonaut insured United by a primary policy to a limit of $300,000 and was thereby obligated to indemnify National for that amount. Argonaut argues that its policy covered United only to a limit of $10,000, the amount of the deductible under the Commerce and Industry policy.

The district court looked to extrinsic evidence in order to determine the intent of the parties to the contract by which Argonaut insured United for alternative reasons. California law permits reception of such evidence to ascertain the parties' intent, even when the contract appears unambiguous on its face, if "the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible." Pacific Gas and Electric Co. v. G.W. Thomas Drayage Co., 69 Cal.2d 33, 37, 69 Cal.Rptr. 561, 442 P.2d 641 (1968); see Kock v. Quaker Oats Co., 681 F.2d 649, 657 n. 5 (9th Cir.1982); Brobeck, Phleger &amp...

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