Ameron Int'l Corp. v. Am. Home Assurance Co.
| Decision Date | 06 June 2011 |
| Docket Number | Case No. CV 11-1601 CAS (AGRx) |
| Court | U.S. District Court — Central District of California |
| Parties | AMERON INTERNATIONAL CORPORATION v. AMERICAN HOME ASSURANCE COMPANY; ET AL. |
CIVIL MINUTES - GENERAL
Present: The Honorable CHRISTINA A. SNYDER
CATHERINE JEANG Deputy Clerk
LAURA ELIAS Court Reporter / Recorder
N/A Tape No.
Attorneys Present for Plaintiffs: Charles Siegal Leo Goldbard
Attorneys Present for Defendants: David McMahon Peter Felsenfeld
Proceedings: PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT (filed 04/14/11)
On January 27, 2011, plaintiff Ameron International Corporation filed the instant action against defendant American Home Assurance Company in the Los Angeles County Superior Court alleging claims for declaratory relief and breach of contract. Plaintiff seeks a determination that defendant's insurance policies provide defense coverage for an action pending against plaintiff in Hawaii. On February 23, 2011, defendant removed the action to this Court on the basis of diversity jurisdiction.
On April 14, 2011, plaintiff filed the instant motion for partial summary judgment. On May 16, 2011, defendant filed an opposition to plaintiff's motion. Plaintiff replied on May 23, 2011. After carefully considering the arguments set forth by both parties, the Court finds and concludes as follows.
On June 1, 2004 and June 1, 2005, defendant issued commercial general liability insurance policies, numbers GL 360-23-12 and GL 643-17-25, respectively ("the policies"), to plaintiff. Defendant's Statement of Uncontroverted Facts ("DSUF") ¶¶ 2-3. The policies provide that defendant will "pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury or property damage,'" including loss of use of property, that is "caused by an 'occurrence' that takes place in the'coverage territory.'" DSUF ¶ 4. The policies further provide that defendant has the right and duty to defend plaintiff against "any suit seeking those damages." DSUF ¶ 4.
"Occurrence" is defined in the policies as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." DSUF ¶ 5. The term "accident" is not defined in the policies. "Property damage" is defined as "[p]hysical injury to tangible property, including all resulting loss of use of that property," or "[l]oss of use of tangible property that is not physically insured," deemed to have occurred at the time of the "occurrence" that caused it. DSUF ¶ 6. The policies define "coverage territory" for present purposes as the United States. DSUF ¶ 7. The policies provide coverage for "property damage" or "bodily injury" occurring from June 1, 2004 to June 1, 2006. DSUF ¶ 8.
The policies do not explicitly specify a place of performance. DSUF ¶ 9. Plaintiff, a company headquartered and with its principal place of business in California, purchased the policies through the Los Angeles, California office of Aon Risk Services. Plaintiff's Statement of Uncontroverted Facts ("PSUF") ¶ 10. Defendant has its principal place of business in New York. DSUF ¶ 10. The policies include one amendatory endorsement, which was accepted in California and applies to the policy as a whole. PSUF ¶ 14. All required premiums have been paid with respect to the policies, and all conditions and covenants required to be performed by plaintiff under the policies have been performed. PSUF ¶¶ 16-17.
On April 13, 2010, Brown's Trucking, Inc. ("Brown") filed a complaint ("the Brown Complaint") against plaintiff in Hawaii state court in the matter of Brown's Trucking, Inc. v. Ameron Int'l Corp., et al., CV 10-1-0245 ("the Brown action"). DSUF ¶ 18. The Brown Complaint alleges that Brown was hired as the general contractor on the State of Hawaii Department of Transportation project described as "Kamehameha V Highway Emergency Replacement of Kawaikapu Bridge, District of Molokai, Island of Molokai, Federal Aid Project No. ER-12(4)" (the "Project"). DSUF ¶ 19. The Brown Complaint further alleges that Brown contracted with plaintiff to supply concrete for the Project, including concrete for the construction of drilled shafts. DSUF ¶ 20. The Brown Complaint alleges that the concrete provided by plaintiff was substandard and resulted in the failure of drill shafts, causing delays and the filing of a lawsuit against Brown by the subcontractor responsible for installing the damaged drilled shafts. PSUF ¶ 21. Based onthose facts, the Brown Complaint alleges causes of action against plaintiff for (1) breach of contract, (2) quantum meruit, (3) negligence, (4) negligent interference with contract, (5) equitable indemnity, and (6) contribution. DSUF ¶ 22.
By letter dated April 30, 2010, plaintiff tendered the Brown action to defendant for coverage and a defense. DSUF ¶ 23. On November 15, 2010, Chartis Claims, Inc. ("Chartis"), the claims administrator for defendant, informed plaintiff by letter that "there is no coverage under the policies for the claims presented" based on the allegations in the Brown Complaint. DSUF ¶ 24. The letter stated that Brown's claims did not allege an "occurrence" as defined in the policies because "Hawaii courts have consistently held that commercial general liability coverage is not available for contract and contract-based tort claims under Hawaii law." Declaration of Charles D. Siegal ("Siegal Decl."), Exh. C. at 77. Plaintiff requested additional explanation of defendant's denial of coverage by letter on November 19, 2010, to which Chartis responded on December 10, 2010. DSUF ¶¶ 26-27. Defendant continues to refuse to provide plaintiff with coverage and a defense to the Brown action. DSUF ¶ 28.
Plaintiff seeks a declaration that defendant owes it a duty to defend the Brown action and to reimburse it for the cost of defending the lawsuit thus far. Mot. at 1.
Summary judgment is appropriate where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party has the initial burden of identifying relevant portions of the record that demonstrate the absence of a fact or facts necessary for one or more essential elements of each cause of action upon which the moving party seeks judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
If the moving party meets its initial burden, the opposing party must then set out specific facts showing a genuine issue for trial in order to defeat the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); see also Fed. R. Civ. P. 56(c), (e). The nonmoving party must not simply rely on the pleadings and must do more than make "conclusory allegations [in] an affidavit." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990); see also Celotex, 477 U.S. at 324. Summary judgment must be granted forthe moving party if the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322; see also Abromson v. Am. Pac. Corp., 114 F.3d 898, 902 (9th Cir. 1997).
In light of the facts presented by the nonmoving party, along with any undisputed facts, the Court must decide whether the moving party is entitled to judgment as a matter of law. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 & n.3 (9th Cir. 1987). When deciding a motion for summary judgment, "the inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation omitted); Valley Nat'l Bank of Ariz. v. A.E. Rouse & Co., 121 F.3d 1332, 1335 (9th Cir. 1997). Summary judgment for the moving party is proper when a rational trier of fact would not be able to find for the nonmoving party on the claims at issue. See Matsushita, 475 U.S. at 587.
At the outset, the parties dispute whether California or Hawaii law controls the present dispute. See Mot. at 11-17; Opp'n at 1-9; Reply at 1-11. This inquiry is significant because, as discussed in more detail below, the allegations in the Brown Complaint trigger defendant's duty to defend the Brown action under California law, but may not under Hawaii law.
Because this lawsuit has been brought in California, the Court must apply California choice of law principles in determining the appropriate substantive law to apply to this dispute. See Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., 622 F.3d 996, 1002 (9th Cir. 2010) (). In contract cases, California has two different choice of law tests: California Civil Code section 1646, which governs the interpretation of contracts, and the "governmental interest" test. The parties disagree as to which choice of law rule the Court should apply. Plaintiff argues that the policies fall within the scope of California Civil Code section 1646, because the question of whether the allegations inthe Brown Complaint constitute an "occurrence" within the meaning of the policies is one of contract interpretation. Mot. at 12-14; Reply at 2-3 (citing Frontier Oil Corp. v. RLI Ins. Co., 153 Cal. App. 4th 1436, 1459-60 (2007)). Defendant counters that determining whether plaintiff is entitled to a defense in the Brown action involves the applicability and enforceability of an express contractual promise, rather than an interpretation of the policies. Opp'n at 1-2. Therefore, defendant maintains that California's common law governmental interest analysis applies. Id. The Court need not decide this dispute because under either section 1646 or the governmental interest analysis, California law governs.1
California Civil Code section 1646 provides a choice...
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