Aerojet-General Corp. v. Transport Indemnity Co
| Decision Date | 28 May 1996 |
| Docket Number | A057812 and A059976,Nos. A053808,AEROJET-GENERAL,s. A053808 |
| Citation | 45 Cal.App.4th 1192,53 Cal.Rptr.2d 398 |
| Parties | Previously published at 45 Cal.App.4th 1192, 50 Cal.App.4th 354 45 Cal.App.4th 1192, 50 Cal.App.4th 354, 96 Cal. Daily Op. Serv. 3788, 96 Daily Journal D.A.R. 6079 CORPORATION et al., Cross-Complainants and Appellants, v. TRANSPORT INDEMNITY COMPANY et al., Cross-Defendants and Respondents. |
| Court | California Court of Appeals Court of Appeals |
Nossaman, Guthner, Knox & Elliott, Scott P. DeVries, San Francisco, Aerojet-General Corporation, Jose N. Uranga, Sacramento, for Aerojet-General Corporation and Cordova Chemical Company.
Bishop, Barry, Howe, Haney & Ryder, Jeffrey N. Haney, William R. Brown, San Francisco, for Commercial Union Insurance Company for Falcon Insurance Company, formerly known as Employers' Surplus Lines.
Boornazian, Jensen & Garthe, Bruce Winkleman, Oakland, for American Excess Insurance Co.
Carroll, Burdick & McDonough, James B. Clapp, Sacramento, Horvitz & Levy, Mitchell C. Tilner, Encino, for California Insurance Guarantee Association.
Gibson, Dunn & Crutcher, Donald E. Sloan, San Francisco, for Aetna Casualty & Surety Company.
Crosby, Heafey, Roach & May, Stephen G. Schrey, Louise M. McCabe, Oakland, for Northbrook Excess and Surplus Insurance Company, Hartford Accident and Indemnity Company, First State Insurance Company, New England Reinsurance Corporation, Twin City Fire Insurance Company, Old Republic Insurance Company, Northbrook Excess & Surplus.
Gordon & Rees, Donald W. Rees, David C. Capell, San Francisco, for Gibraltar Casualty Company.
Haasis, Pope & Correll, Kenneth E. Goates, San Diego, for Federal Insurance Company.
Hancock, Rothert & Bunshoft, Richard L. Seabolt, Andrew K. Gordon, Brian A. Kelly, Laura G. Hill and Arthur J. Friedman, San Francisco, for Certain Underwriters at Lloyd's London and certain British insurance companies designated as "Cheshire and Companies".
Hardin, Cook, Loper, Engel & Bergez, Ralph A. Lombardi, Oakland, for Republic Indemnity Co. of America.
Hoge, Fenton, Jones & Appel, Inc., Robert Cullen, San Jose, for Protective National Insurance Company of Omaha.
Jedeikin, Green, Meadows & Schneider, Nancy A. Aptekar, San Francisco, for Hartford Accident and Indemnity Company, First State Insurance Company, New England Reinsurance Corporation, Twin City Fire Insurance Company.
Lillick & Charles, Donald E. Dorfman, James Forbes, San Francisco, for Home Insurance Company, City Insurance Company.
Long & Levit, Ira Goldberg, San Francisco, for Columbia Casualty Company, Transcontinental Insurance Company, Continental Casualty Company.
Luce, Forward, Hamilton & Scripps, Cathy L. Croshaw, Mitchell L. Lathrop, San Francisco, for Westport Insurance Corp. (formerly known as Puritan Insurance Company).
Lynberg & Watkins, R. Jeff Carlisle, Wendy E. Schultz, Los Angeles, for AIU Insurance Company, American Home Assurance Company, American International Reinsurance Company of Pembroke, Bermuda Granite State Insurance Company, Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburg, Pennsylvania, New Hampshire Insurance Company, Landmark Insurance Company, Lexington Insurance Company.
Misciagna & Colombatto, P. Richard Colombatto, San Francisco, for Old Republic Insurance Company.
Morris, Polich & Purdy, Steve Crane, Mike Colliau, Los Angeles, for Fidelity & Casualty Company of New York, Continental Insurance Company.
Transit Casualty Company In Receivership, J. Burleigh Arnold, Los Angeles, for Transit Casualty Company.
Newton, Kastner & Remmel, Stephen Newton, Mountain View, for Associated International Insurance Company.
O'Melveny & Myers, Martin S. Checov, San Francisco, for Insurance Company of North America, Central National Insurance Company of Omaha.
Orrick, Herrington & Sutcliff, Jeffrey S. White, San Francisco, for The Seven Provinces Insurance Company, Ltd.
Pruess, Walker & Shanagher, Gary T. Walker, San Francisco, for International Insurance Company, International Surplus Lines Insurance Company, Industrial Underwriters Insurance Company, United States Fire Insurance Company.
Rivkin, Radler & Kremer, Donald McMillan, George Keller, Santa Rosa, Fireman's Fund Insurance Companies, Michael Skaggs, Environmental Claims Facility, Petaluma, for Fireman's Fund Insurance Company.
Ropers, Majeski, Kohn, Bentley, Wagner & Kane, Richard K. Wilson, Redwood City, for Transport Indemnity Company.
Sedgwick, Deter, Moran & Arnold, Roger Sleight, Jeffrey Miller, San Francisco, for Allianz Underwriters Insurance Company.
Skadden, Arps, Slate, Meagher & Flom, Irene Sullivan, New York City, Skadden, Arps, Slate, Meagher & Flom, Thomas R. Harrell, San Francisco, for General Reinsurance Company, North Star Reinsurance Corporation.
Francis J. Stillman, Burlingame, for Chicago Insurance Company.
Loraine A. Wallace, San Jose, for Harbor Insurance.
Wilson, Eelser, Moskowitz, Edelman & Dicker, Debra S. Strummer, Stephen P. Randall, San Francisco, for Evanston Insurance Company.
This declaratory judgment action was instituted by Aerojet-General Corporation and Cordova Chemical Company 2 (collectively Aerojet) to secure a determination of the rights and obligations of the parties under Comprehensive General Liability Insurance (CGL) policies that over 50 insurers (insurers) issued to Aerojet from 1956 to 1984. Aerojet sought insurance coverage for losses resulting from contamination of groundwater with toxic chemicals from unlined ponds and trenches where Aerojet's chemical wastes had been deposited at its industrial facility near Sacramento. Judgment was rendered for insurers after a jury determined they were not obligated to indemnify Aerojet for any of the policy years at issue.
Aerojet's appeal questions the court's construction of CGL policy provisions, especially policy exclusions. Aerojet challenges numerous evidentiary and procedural rulings, and raises several issues involving reimbursement of defense costs. We affirm in part and reverse in part.
The salient facts are largely undisputed. In 1951 Aerojet established an 8,500 acre facility 15 miles east of Sacramento, California, for the purpose of developing, testing and building rocket systems. Aerojet's Sacramento facility was devoted primarily to the development and production of missile and rocket motors for the Air Force, Navy, Army and National Aeronautics and Space Administration. Examples of the contract programs performed at Aerojet's site during the 1950's through 1970's include Gemini, Apollo, Delta, Titan, Polaris, Minuteman, Hawk, Genie, Tartar, Standard Missile and Harpoon. By 1961 the Aerojet site consisted of nearly 800 buildings staffed by approximately 17,000 engineers, technicians, security, service and administrative personnel in the shops, laboratories, offices and test areas.
Aerojet used various chemicals in the performance of its work, which were primarily disposed of on-site and included trichloroethylene In 1979 the presence of hazardous chemicals, including TCE, was discovered in the groundwater beneath the site and other nearby property. Further investigation determined that contaminants from Aerojet's earthen pits and trenches were seeping into the soil and polluting the groundwater, ultimately reaching the American River.
(TCE), a hazardous chemical solvent used by Aerojet primarily for metal and equipment cleaning operations. TCE was described by Aerojet's counsel as "the very life blood of Aerojet's operation." It was brought onto the Aerojet site in 10,000 gallon railroad tank cars, and by 1972 Aerojet had used 4 to 5 million gallons of TCE in its operations. Chemical wastes resulting from Aerojet's operations, some of which contained TCE, were discharged into large earthen pits and trenches which were excavated and designed specifically for this purpose
The presence of these chemicals in the groundwater and soil resulted in legal action against Aerojet by both the United States and the State of California, as well as numerous private litigants. The state initially sued Aerojet in state court, primarily under the Porter-Cologne Water Quality Control Act (Porter-Cologne Act) (Wat.Code, § 13000 et seq.), and subsequently filed a parallel action along with the United States in the federal district court under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) (42 U.S.C. § 9601 et seq.). 3 The state and federal actions sought reimbursement for the cost of remediation of the contamination, and ultimately resulted in a partial consent decree under which Aerojet agreed to undertake the cleanup. The actions by the private parties sought money damages for personal injury and property damage. As the various governmental and private lawsuits were commenced, Aerojet sought indemnification and a defense from its insurers.
Several insurers sought declaratory relief to clarify their obligation to Aerojet. In this same litigation, Aerojet cross-complained against over 50 underwriters and insurance companies which issued policies to Aerojet during the 1956-1984 period in question. 4 Aerojet's cross-complaint raised questions with respect to the insurers' duty to defend and/or indemnify it in 38 enumerated lawsuits consisting of 3 governmental actions and 35 private actions. Aerojet's cross-complaint ultimately went to trial and is the subject of this appeal. The litigation involved numerous parties and issues. The major issues were divided into distinct and separate phases, each necessarily foundational to the next. We have grouped Aerojet's appellate arguments in accordance with the phases in which the case was tried. 5
Phase I was tried to the court sitting without a jury and involved the interpretation of policy language, particularly the coverage...
To continue reading
Request your trial
-
Stonewall Ins. Co. v. City of Palos Verdes Estates
...of a dispute concerning costs of defending against liability for toxic waste, Aerojet-General Corp. v. Transport Indemnity Co. (1st Dist., Div. 5, 1996) 50 Cal.App.4th 354, 379-383, 53 Cal.Rptr.2d 398 review granted September 25, 1996 (S054501), held that the insured was required to bear a ......
-
Domtar, Inc. v. Niagara Fire Ins. Co.
...necessary either to defeat liability or to minimize the scope or magnitude of such liability. See Aerojet-Gen. Corp. v. Transport Indem. Co., 50 Cal.App.4th 354, ----, 53 Cal.Rptr.2d 398, 408 (concluding that a reasonable defense "even for a clearly liable party" requires investigative stud......
-
General Star Nat. Ins. Corp. v. World Oil Co.
...180-81 (8th Cir.1989). "Other insurance" clauses prevent double recovery by the insured, see Aerojet-General Corp. v. Transport Indem. Co., 45 Cal.App.4th 1192, 1221, 53 Cal.Rptr.2d 398 (1996), and attempt to control the manner in which the insurer contributes to a loss, see Fire Ins. Exch.......
-
Hormel Foods v. NORTHBROOK PROPERTY & CAS. INS.
...11.31 at 348. This is precisely the result which courts addressing these facts have reached. See Aerojet-General Corp. v. Transport Indemnity Co., 45 Cal.App.4th 1192, 53 Cal.Rptr.2d 398 (1996) (where entity makes business decision to retain portion of risk, no duty to defend exists until r......