Certain Underwriters at Lloyd's of London v. Superior Court

Citation56 Cal.App.4th 952,65 Cal.Rptr.2d 821
Decision Date25 July 1997
Docket NumberNo. B110170,B110170
Parties, 97 Cal. Daily Op. Serv. 5918, 97 Daily Journal D.A.R. 9519 CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; SOUTHERN CALIFORNIA GAS COMPANY, Real Party in Interest.
CourtCalifornia Court of Appeals

Hancock Rothert & Bunshoft, San Francisco, Yvette D. Roland, Victoria A. Pynchon and Jennifer D. McKee, Los Angeles, for Petitioner.

No appearance for Respondent.

Troop Meisinger Steuber & Pasich, David W. Steuber, Tyrone R. Childress, Los Angeles, and Jeffrey M. Jacobberger for Real Party in Interest.

MIRIAM A. VOGEL, Associate Justice.

This is a coverage dispute in which the insured (the Southern California Gas Company [SoCalGas] ) contends the carrier (Certain Underwriters at Lloyd's of London designated as Lowsley-Williams and Companies [Lowsley-Williams] ) breached its duties to defend and indemnify SoCalGas in several environmental contamination actions. SoCalGas tendered the defense of the underlying actions to Lowsley-Williams, but Lowsley-Williams refused to defend or indemnify SoCalGas and this lawsuit followed. Lowsley-Williams moved for summary adjudication of issues, contending there was no possibility of coverage under the policies (and thus no duty to defend) because the coverage afforded under its policies was effective for "finite policy periods" during which SoCalGas had no insurable interest in the properties that are the subject of the underlying action and, therefore, no objectively reasonable expectation of coverage. Lowsley-Williams presented some evidence (discovery responses) addressing the insurable interest issue but it did not submit copies of the insurance policies or any evidence of the allegedly "finite" policy periods or of the terms and conditions of those policies. SoCalGas opposed the motion, contending among other things) that Lowsley-Williams had failed to meet its initial burden of proof because it had not submitted the policies (or any proof that might otherwise suggest SoCalGas would be unable to establish coverage).

The trial court denied the motion, and Lowsley-Williams filed a petition for a writ of mandate, asking us to hold that its evidence was sufficient to shift the burden of proof to SoCalGas because the coverage issue could be determined as a matter of law, without reference to the policies. We disagree and hold that, absent relevant admissions by the insured, an insurer moving for summary adjudication of issues or summary judgment on the merits of a case in which coverage is disputed must provide copies of the policies or, if the policies are missing, secondary evidence sufficient to inform the court of the relevant terms and conditions of the insurance contract. 1

DISCUSSION
A.

As evidentiary support for its motion, Lowsley-Williams relied on SoCalGas's first amended complaint which, according to Lowsley-Williams, "contends" that Lowsley-Williams issued "various excess liability policies" for specified periods of time. In its opposition, SoCalGas admits it contends that Lowsley-Williams is liable under the policies but points out that Lowsley-Williams had "not introduced the relevant insurance policies into evidence, and there is thus no admissible evidence regarding the language or terms of those policies." The issue, as Lowsley-Williams contends the trial court should have granted its motion on the ground that SoCalGas's allegation of "the policy periods" (that is, the complaint's list of policy numbers and years) was a judicial admission on which Lowsley-Williams can rely, "with no further evidence of the policy periods required" to support its motion for summary adjudication. 2 We disagree.

                framed by Lowsley-Williams, was whether SoCalGas had an insurable interest in the properties that are the subject of the underlying actions at the time the policies were in effect.  The threshold question, however, is whether that issue could or should be determined in a vacuum.  According to Lowsley-Williams, "the particular language of the [listed] Policies is irrelevant for purposes of applying the statutory insurable interest requirement, because that requirement is read into the policies as a matter of law."   According to SoCalGas, the language of the policies must be examined to determine the dates the policies were "in effect" (that is, the dates relevant to the "insurable interest" issue) and whether the terms and conditions of the policies support a claim of coverage for the underlying actions
                
B.

Under the current version of section 437c of the Code of Civil Procedure, 3 a defendant moving for summary adjudication has met its "burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established .... Once the defendant ... has met that burden, the burden shifts to the plaintiff ... to show that a triable issue of one or more material facts exists as to that cause of action.... The plaintiff ... may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action ...." (§ 437c, subd. (o)(2), emphasis added.) As we explained in Leslie G. v. Perry & Associates (1996) 43 Cal.App.4th 472, 482, 50 Cal.Rptr.2d 785, this provision in section 437c means that a "moving defendant may (through factually vague discovery responses or otherwise) point to the absence of evidence to support the plaintiff's case. When that is done, the burden shifts to the plaintiff to present evidence showing there is a triable issue of material fact. If the plaintiff is unable to meet [its] burden of proof regarding an essential element of [its] case, all other facts are rendered immaterial." (Original italics omitted, emphasis added.)

Under the plain language of the statute, the burden does not shift to the plaintiff unless the moving defendant first meets its burden of "showing" that the plaintiff cannot establish at least one element of its cause of action. (§ 437c, subd. (o)(2).) Under our holding in Leslie (and under the rules announced in all of the cases decided since the 1993 amendment to section 437c [Stats.1993, ch. 276] ), this initial burden can be met by the presentation of "factually vague discovery responses or otherwise"--but we know of no case suggesting that section 437c permits the moving defendant to meet its initial burden without any showing at all. (Leslie G. v. Perry & Associates, supra, 43 Cal.App.4th at p. 482, 50 Cal.Rptr.2d 785 ["factually vague discovery responses" sufficient to shift burden]; see also Villa v. McFerren (1995) 35 Cal.App.4th 733, 739-740, 41 Cal.Rptr.2d 719 [failure to present "competent evidence which proved the allegation of a conspiracy could not be established" means the burden is not shifted]; Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590, 37 Cal.Rptr.2d 653 ["factually devoid discovery responses" sufficient to shift burden]; Jambazian v. Borden (1994) 25 Cal.App.4th 836, 846, 30 Cal.Rptr.2d 768 [expert's "declaration" negating medical malpractice sufficient to shift burden]; Hunter v. Pacific Mechanical We agree, of course, that Lowsley-Williams was entitled to rely on admissions in SoCalGas's pleadings (Foxborough v. Van Atta (1994) 26 Cal.App.4th 217, 222, fn. 3, 31 Cal.Rptr.2d 525), and we therefore necessarily also agree (as SoCalGas concedes) that it is undisputed that SoCalGas "contends that the [listed] Policies are obligated to provide [it] with a defense and indemnity" arising at the OII and IWP sites. (Emphasis added.) So what? The issue is what SoCalGas can prove, not what it can plead, and a statement by Lowsley-Williams paraphrasing SoCalGas's contention does not come close to suggesting (let alone showing) that SoCalGas will be unable to establish coverage--unless Lowsley-Williams also shows that the provisions of the policies support its position by defining the effective dates of coverage to exclude the underlying actions under the theories raised by SoCalGas's complaint.

                Corp.   (1995) 37 Cal.App.4th 1282, 1288, 44 Cal.Rptr.2d 335 [factually vague discovery responses sufficient to shift burden].)
                

We find nothing in section 437c or any case to suggest that a defendant moving for summary judgment or summary adjudication can shift the burden of proof to the plaintiff by the sort of challenge presented by Lowsley-Williams's motion. More specifically, we find nothing in section 437c to suggest a legislative intent to require our state courts to decide coverage issues without reference to the policy from which springs the claim of coverage. (Cf. United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 333, 282 Cal.Rptr. 368 [to justify adjudication of an issue, the moving party must show that it is supported by undisputed facts, which in turn must be established by "admissible evidence"].) 4 While Lowsley-Williams's approach may be legitimate in federal court, it is not permitted by section 437c.

C.

Which brings us to the heart of the problem. Lowsley-Williams's argument seems to assume that the 1992 and 1993 amendments to section 437c adopted rule 56 of the Federal Rules of Civil Procedure (28 U.S.C.) as well as every nuance of the rules announced in Celotex Corp. v. Catrett (1986) 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265. While we agree that the 1993 amendment accomplished a dramatic change in California's summary judgment law by authorizing the moving defendant's use of the plaintiff's factually vague discovery responses to shift the burden of proof to the plaintiff (Union Bank v. Superior Court, supra, 31 Cal.App.4th at pp. 589-590, 37 Cal.Rptr.2d 653), there is nothing in our amended statute (or the cases decided since the 1993 amend...

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