Reliance Nat. Indem. Co. v. General Star Indem. Co.

• Decision Date: 09 June 1999
• Docket Number: No. B120030,B120030
• Citation: 85 Cal.Rptr.2d 627,72 Cal.App.4th 1063
• Court: California Court of Appeals Court of Appeals
• Parties: , 99 Cal. Daily Op. Serv. 4549, 1999 Daily Journal D.A.R. 5748 RELIANCE NATIONAL INDEMNITY CO., Plaintiff and Appellant, v. GENERAL STAR INDEMNITY CO., Defendant and Respondent.

Page 627

85 Cal.Rptr.2d 627

72 Cal.App.4th 1063, 99 Cal. Daily Op. Serv. 4549,

1999 Daily Journal D.A.R. 5748

RELIANCE NATIONAL INDEMNITY CO., Plaintiff and Appellant, v. GENERAL STAR INDEMNITY CO., Defendant and Respondent.

No. B120030.

Court of Appeal, Second District, Division 5, California.

June 9, 1999.

Certified for Partial Publication. ^*

Boornazian, Jensen & Garthe, David J. Garthe, Jacqueline Jordan Leung and Kelly T. Nugent, Oakland, for Plaintiff and Appellant.

Quisenberry & Barbanel, Alan H. Barbanel and Phyllis J. Bersch, Los Angeles, for Defendant and Respondent.

TURNER, P.J.

I. INTRODUCTION

Plaintiff, Reliance National Indemnity Company (Reliance), appeals from summary judgment entered in favor of defendant, General Star Indemnity Company (General Star), on a complaint for indemnity and contribution. Reliance seeks complete indemnity from Golden Star for monies expended in defense and settlement of a lawsuit in federal court in Rhode Island. We affirm because we conclude the principal authority relied upon by Reliance, Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628-635, 119 Cal.Rptr. 449, 532 P.2d 97 (Rossmoor hereafter), is not controlling in this case which involves a coverage dispute between primary and excess insurance carriers.

II. BACKGROUND

A. The Parties, Policies, and the Underlying Lawsuit

This action is based upon several insurance policies issued to Don Law Company, Inc. ("Don Law") and Lollapalooza Joint Venture, a joint venture of Perry Farrell doing business as Bells Are Ringing, Inc., Ted Gardner doing business as Woomera, Inc., and William Morris Agency doing business as Morwill Entertainment, Inc. For purposes of clarity, the joint venture will be referred to as "Lollapalooza" in the balance of this opinion. Lollapalooza entered into a written contract dated June 18, 1994, with Don Law. Under the June 18, 1994, contract terms, Lollapalooza agreed to sponsor a musical festival on August 3, 1994, at Providence, Rhode Island. The contract provided that it would be construed solely under the laws of the State of California. The June 18, 1994, contract required Don Law to indemnify and hold Lollapalooza harmless for personal injury loss, damage, or expense. Paragraph 21 of the contract, in which Don Law was identified as the "PURCHASER," provides: "PURCHASER hereby indemnifies and holds PRODUCER and ARTIST, as well as their respective agents, representatives, principals, employees, officers and directors, harmless from and against any loss, damage or expense, including reasonable attorney's fees, incurred or suffered by or threatened against PRODUCER or ARTIST or any of the foregoing in connection with or as result of any claim for personal injury or property damage or otherwise brought by or on behalf of any third party person, firm or corporation as a result of or in connection with the engagement, which claim does not result from the active negligence of the ARTIST and/or PRODUCER." It is this indemnification clause upon which Reliance relies on in large part to support its contention that Rossmoor, Inc., supra, 13 Cal.3d at pages 628-635, 119 Cal.Rptr. 449, 532 P.2d 97 is controlling in this case.

The June 18, 1994, contract further required Don Law to purchase commercial general or public liability insurance naming Lollapalooza as an additional insured and with a combined single limit of $5 million aggregate per occurrence and $5 million total per event. Paragraph K provided: "1. Purchaser shall secure at its sole cost and expense, Commercial General (or so-called "Public") Liability Insurance covering any claims, liabilities, or losses resulting directly or indirectly from injuries to any person (including Bodily Injury and Personal Injury) and from any Property Damage and/or Loss in an amount of a combined single limit of Five Million Dollars ($5,000,000 U.S.D.) aggregate per occurrence and Five Million Dollars ($5,000,000 U.S.D.) aggregate per event placed with an insurance company acceptable to PRODUCER and naming PRODUCER and its principals and their respective officers, partners, principals, employees and agents as additional insureds. PURCHASER shall furnish to PRODUCER and its representative, Robertson Taylor (North America), Inc. (per address in paragraph 6 below) a copy of said Commercial General Liability policy(s) or Umbrella policy(s), if applicable, for PRODUCER'S prior written approval." Paragraph 20 of the June 18, 1994, contract provided, "In the event of any inconsistency between the provisions of this contract and the provisions of any riders, addenda, exhibits or any other attachments hereto, the parties agree that the provisions most favorable to PRODUCER and ARTIST shall control." Paragraph M of the contract provided: "Except as otherwise stated herein PURCHASER assumes sole responsibility for any cost, expenses, charges, claims losses, liabilities, and/or damages directly or indirectly related to the Festival."

During the relevant time period, Reliance insured Lollapalooza with a general liability policy from January 22, 1994, to January 22, 1995. There was a limit was $1 million on the Reliance primary general liability policy. Reliance also insured Lollapalooza under an excess policy. The Reliance excess policy provided coverage once the $1 million limit on its general liability obligation was exhausted. Gulf insured Don Law under a primary policy with limits of liability of $1 million in the aggregate. Gulf named Lollapalooza as an additional insured pursuant to an endorsement and a certificate of insurance. General Star insured Don Law between May 1, 1994, and May 1, 1995, under an excess policy with limits of liability of $10 million per occurrence and aggregate. Lollapalooza was an additional insured under the General Star excess policy pursuant to the terms of section V(d). This was because Don Law was required by the June 18, 1994, written contract to provide such insurance. Lollapalooza was also an additional insured under the terms of section V(e) of the excess policy. This was because Lollapalooza was an additional insured included in the underlying insurance provided by the Gulf policy. Lollapalooza was further named as an additional insured under the General Star excess policy under the terms of a certificate of insurance issued to Lollapalooza. The certificate of insurance referred to the General Star policy and an attached additional insured addendum.

Reliance's policy provided subrogation rights as follows: "Transfer of Rights of Recovery Against Others to Us. [p] If the [i]nsured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The [i]nsured must do nothing after loss to impair them. At our request, the insured will bring 'suit' or transfer those rights to us and help us enforce them." The other insurance clause in the Reliance primary policy provided in part: "If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as follows: [p] a. Primary Insurance [p] This insurance is primary except when b. below applies. If this insurance is primary our obligations are not affected unless any of the other insurance is also primary. Then, we shall share with all that other insurance by the method described in c. below. [p] Excess Insurance [p] This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis: [p] ... [p] When this insurance is excess, we will have no duty under Coverage A or B to defend any claim or 'suit' that any other insurer has a duty to defend. If no other insurer defends, we will undertake to do so, but we will be entitled to the Insured's rights against all those other insurers. [p] When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any, that exceeds the sum of: [p] (1) The total amount that all such other insurance would pay for the loss in the absence of this insurance; and [p] (2) The total of all deductible and self-insured amounts under all that other insurance. [p] We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of this Coverage Part."

The General Star other insurance policy language was as follows: "If other valid and collectible insurance with any other insurer is available to the insured covering a loss also covered by this Policy, other than insurance that is in excess of the insurance afforded by this Policy, the insurance afforded by this Policy shall be in excess of and shall not contribute with such other insurance. Nothing here shall be construed to make this Policy subject to the terms, conditions, and limitations of other insurance, reinsurance or indemnity." The Reliance excess policy provided in part: "6. Other Insurance [p] If there is any: a. other insurance; or ... this coverage part shall apply as excess of and not contributing with such insurance."

On August 3, 1994, an audience member was injured at the festival while "crowd surfing." As a result of the injury, on May 16, 1995, plaintiffs filed a complaint for damages against a number of defendants including Lollapalooza and Don Law in the United States District Court in Rhode Island (the "underlying action"). The underlying action alleged that a concert goer was injured while "crowd surfing" at the August 3, 1994, event produced by Don Law and sponsored by Lollapalooza. The underlying action was settled for $2,142,858. Reliance provided a defense to Lollapalooza and contributed $1 million to the $2,142,858 settlement of the underlying action on behalf of its insured. Reliance also paid $71,429 under the excess policy. Gulf provided a defense and...