Nicolet, Inc. v. Superior Court (Insurance Co. of North America)

• Citation: 188 Cal.App.3d 28,224 Cal.Rptr. 408
• Court: California Court of Appeals
• Decision Date: 25 March 1986
• Parties: Previously published at 188 Cal.App.3d 28 188 Cal.App.3d 28 NICOLET, INC., Petitioner, v. SUPERIOR COURT of the State of California, City and County of San Francisco, Respondent, INSURANCE COMPANY OF NORTH AMERICA, Real Party in Interest. GAF CORPORATION, Petitioner, v. SUPERIOR COURT of the State of California, City and County of San Francisco, Respondent, KEMP AND COMPANIES, Real Parties in Interest. GAF CORPORATION and GAF Insurance, Ltd., Petitioners, v. SUPERIOR COURT of the State of California, City and County of San Francisco, Respondent, INSURANCE COMPANY OF NORTH AMERICA, et al., Real Parties in Interest. A030879, A030933 and A030934.

Page 408

224 Cal.Rptr. 408

Previously published at 188 Cal.App.3d 28

188 Cal.App.3d 28

NICOLET, INC., Petitioner, v. SUPERIOR COURT of the State of California, City and County of San Francisco, Respondent, INSURANCE COMPANY OF NORTH AMERICA, Real Party in Interest.

GAF CORPORATION, Petitioner, v. SUPERIOR COURT of the State of California, City and County of San Francisco, Respondent, KEMP AND COMPANIES, Real Parties in Interest.

GAF CORPORATION and GAF Insurance, Ltd., Petitioners, v. SUPERIOR COURT of the State of California, City and County of San Francisco, Respondent, INSURANCE COMPANY OF NORTH AMERICA, et al., Real Parties in Interest.

A030879, A030933 and A030934.

Court of Appeal, First District, Division 1, California.

March 25, 1986.

Review Granted June 24, 1986.

Paul, Hastings, Janofsky & Walker, Daniel H. Williams, III, Peter K. Rosen, David W. Steuber, Los Angeles, for petitioner Nicolet, Inc.

O'Melveny & Myers, John G. Niles, Robert S. Draper, John F. Daum, Paul G. McNamara, Los Angeles, for real party in interest Insurance Co. of North America.

Paul, Hastings, Janofsky & Walker, David W. Steuber, Grace A. Carter, Martin D. Katz, Keker & Brockett, John W. Keker, Los Angeles, for petitioner GAF Corp.

Hancock, Rothert & Bunshoft, Barry L. Bunshoft, Patrick R. Matthews, Philip R. Matthews, Christina M. Benitez, William J. Baron, San Francisco, for real party in interest Kemp and Companies.

INTRODUCTION AND SUMMARY

NEWSOM, Associate Justice.

By these timely (Code Civ.Proc., § 437c, subd. (l )) ¹ petitions for writs of mandate which we consolidate for decision, Nicolet, Inc. and GAF Corporation (hereafter Nicolet and GAF) seek reversal of certain choice of law rulings made by the San Francisco Superior Court. These rulings, made upon real parties' motions for summary adjudication of issues (Beech Aircraft Corp. v. Superior Court (1976) 61 Cal.App.3d 501, 514-517, 132 Cal.Rptr. 541) are properly subject to pre-trial review. (Ibid.; Hurtado v. Superior Court (1974) 11 Cal.3d 574, 579, 114 Cal.Rptr. 106, 522 P.2d 666.)

Petitioners are plaintiffs below ² in three of the law suits coordinated ( § 404 and Cal.Rules of Court, rule 1520 et seq.)in San Francisco Superior Court as Judicial Counsel Coordination Proceeding No. 1072. Characterized by one authority as "one of the largest trials in the State's history" (Maher, Asbestos Extravaganza (1985) 5 State Bar J. 61) the proceeding generally pits some five plaintiff asbestos manufacturers against 50 insurance companies. At issue are insurance coverage questions, including the so-called trigger-of-coverage issue, which may arise when an asbestos producer has had a number of insurers over the years and now faces claims by workers with diseases arising from exposure to asbestos. "Were the claimants 'injured' while the producer was insured in one period by carrier A, in another period by carrier B, or in yet another period by carrier C?" (Ibid.) Asked to respond to such claims, the insurers have regularly declined coverage, whereupon the producer has sued all. The questions common to such suits are: What event triggered coverage and which company was providing insurance when the event triggering coverage occurred?

No asbestos victims are parties to these coordinated proceedings. The petitioner manufacturers have generally alleged bad faith in the insurers' refusal to defend and indemnify claims, and seek punitive as well as compensatory damages for such bad faith.

In the underlying proceeding, real parties INA and Kemp brought motions for summary adjudication of issues as follows.

As to the Nicolet/INA and GAF/INA actions, it was claimed that Pennsylvania law applies to the question of the availability of punitive damages, and that that state's law will not permit recovery of such damages against INA. As to the GAF/Kemp action, real party claimed that British law governs, and that it likewise precludes recovery of punitive damages.

The respondent court agreed with the INA and Kemp contentions and ruled accordingly, whereupon these petitions followed.

We initially note the standard of review, as proper to this proceeding:

"Since the validity of a summary judgment is to be determined solely by the sufficiency of the affidavits (McComsey v. Leaf, 36 Cal.App.2d 132 ; Dudum v. City of San Mateo, 167 Cal.App.2d 593 ), this court will consider no facts other than those which were before the lower court; '[w]e are limited to the facts shown by the affidavits (Kimber v. Jones, supra, 122 Cal.App.2d 914 ), and are to determine only whether the facts so shown give rise to a triable issue (Coyne v. Krempels, supra, 36 Cal.2d 257 .)' (Italics added.) (Dudum v. City of San Mateo, 167 Cal.App.2d 593, 598 .) Thus any new matter urged upon us cannot be examined; this applies ... to any additional facts 'which might be adduced at a trial' or [plaintiff] claims [it] can prove...." (Green v. Green (1963) 215 Cal.App.2d 37, 46, 30 Cal.Rptr. 23; see also Dixon v. Ford Motor Co. (1975) 53 Cal.App.3d 499, 507, 125 Cal.Rptr. 872, 877; Wiler v. Firestone Tire & Rubber Co. (1979) 95 Cal.App.3d 621, 627, 157 Cal.Rptr. 248, 250-51; G. & D. Holland Construction Co. v. City of Marysville (1970) 12 Cal.App.3d 989, 997, 91 Cal.Rptr. 227.)

The record before us is a voluminous one. Likewise many of the briefs of the parties fail utterly to comply with California Rules of Court rule 15 regarding length and citations to the record, and we are deluged with facts and argument never presented to the trial court. We choose nevertheless to address the merits of the petition, given the complexity of the lower court proceedings and the large number of persons who will be affected by its outcome. (Chambers v. Superior Court (1981) 121 Cal.App.3d 893, 896-897, 175 Cal.Rptr. 575.) Other reasons favoring our proceeding to decision without further delay appear. Thus, respondent court's order bars a substantial portion of petitioners' cases from being heard on the merits during the coordination proceeding (Nazaroff v. Superior Court (1978) 80 Cal.App.3d 553, 557-558, 145 Cal.Rptr. 657); many cases and parties are affected; rights of non-parties are involved, and the question is one of importance to the bench and bar if for no other reason than because of the financial magnitude of the law suit. (Daly v. Superior Court (1977) 19 Cal.3d 132, 140, 137 Cal.Rptr. 14, 560 P.2d 1193.)

We wish, however, to emphasize that in reviewing the rulings of the court below we have disregarded factual assertions (and arguments relying on those factual assertions) which were not presented to the trial court.

We turn now to the crucial issue--common to all of the consolidated petitions--of choice of law and the governmental interest analysis which underlies it in California decisional law. First adopted in Reich v. Purcell (1967) 67 Cal.2d 551, 63 Cal.Rptr. 31, 432 P.2d 727, the analysis has been most recently applied and explained in Hurtado v. Superior Court, supra, 11 Cal.3d 574, 114 Cal.Rptr. 106, 522 P.2d 666, Bernhard v. Harrah's Club (1976) 16 Cal.3d 313, 128 Cal.Rptr. 215, 546 P.2d 719, and in Offshore Rental Co. v. Continental Oil Co. (1978) 22 Cal.3d 157, 148 Cal.Rptr. 867, 583 P.2d 721 (hereafter sometimes Offshore ).

According to that analysis, given the choice of law alternatives set out in the consolidated petitions, we first turn to California law, and to that of Pennsylvania or England, in order to determine whether they differ on the question of punitive damages. As we shall assume, infra, they do, and thus present a conflict. Nevertheless, " '[a]lthough the two potentially concerned states have different laws, there is still no problem in choosing the applicable rule of law where only one of the states has an interest in having its law applied.... "When one of two states related to a case has a legitimate interest in the application of its law and policy and the other has none, there is no real problem; clearly the law of the interested state should be applied." (Currie, Selected Essays on Conflicts of Laws (1963) p. 189.) [Fn. omitted.]' (Hurtado v. Superior Court, supra, 11 Cal.3d at p. 580 [114 Cal.Rptr. 106, 522 P.2d 666].)" (See Offshore Rental Co. v. Continental Oil Co., supra, 22 Cal.3d at p. 163, 148 Cal.Rptr. 867, 583 P.2d 721.)

"We must therefore examine the governmental policies underlying the ... laws, 'preparatory to assessing whether either or both states have an interest in applying their policy to the case.' (Kay, Comments on Reich v. Purcell (1968) 15 UCLA L.Rev. 584, 585.) Only if each of the states involved has a 'legitimate but conflicting interest in applying its own law' will we be confronted with a 'true' conflicts case. (Bernhard v. Harrah's Club, supra, 16 Cal.3d 313, 319 [128 Cal.Rptr. 215, 546 P.2d 719].)" (Offshore, supra, 22 Cal.3d at p. 163, 148 Cal.Rptr. 867, 583 P.2d 721.)

According to high authority, when a true conflict is discovered, the forum state, before simply applying its own law should reexamine its policy to determine if a more restrained interpretation is more appropriate. " '[T]o assert a conflict between the interests of the forum and the foreign state is a serious matter; the mere fact that a suggested broad conception of a local interest will create conflict with that of a foreign state is a sound reason why the conception should be reexamined, with a view to a more moderate and restrained interpretation both of the policy and of the circumstances in which it must be applied to effectuate the forum's legitimate purpose.... An analysis of this kind ... was brilliantly performed by Justice Traynor in Bernkrant v. Fowler (1961) 55 Cal.2d 588 [12 Cal.Rptr. 266, 360 P.2d 906].' (Currie, The Disinterested Third State (1963) 28 Law & Contemp. Prob., pp. 754, 757; see also Sedler in Symposium, Conflict of Laws Round Table, supra, 49 Texas L.Rev. 211, at pp. 224-225.) This process of reexamination requires identification of a 'real interest as...