In re American Bankers Insurance Company of Florida
- Haywood Gilliam
- 4:19-cv-02237
- U.S. District Court · Northern District of California
- 11
In American Bankers v. National Fire, Judge Gilliam granted insurers’ summary-judgment motions because the City showed no policy-period property damage.
The ruling affected the City of Walnut Creek and the remaining insurer defendants: Admiral Insurance Company, the National Fire Insurance Company of Hartford, Columbia Casualty Company, Insurance Company of the State of Pennsylvania, and American Bankers Insurance Company of Florida. The insurers obtained judgment on the City’s coverage claims, and the case was closed.
What happened
American Bankers Insurance Company of Florida and the City of Walnut Creek sought insurance coverage for defense and settlement costs from three flooding lawsuits. The City argued that policies issued from 1968 through 1986 covered the property damage and related expenses.
The insurers argued that the underlying lawsuits alleged damage beginning decades after their policies ended. The City relied on evidence of inadequate drainage and repeated rain during earlier decades, but the court found that evidence did not show property damage during any relevant policy period.
In American Bankers Insurance Company of Florida v. National Fire Insurance Company of Hartford, Judge Haywood S. Gilliam, Jr. granted the defendants’ motions for summary judgment, directed the clerk to enter judgment for the defendants, and closed the case.
The detailed version
- In re American Bankers Insurance Company of Florida · No. 4:19-cv-02237
- Haywood Gilliam
- Feb. 4, 2021
Background
The action consisted of two consolidated cases involving the City of Walnut Creek and several insurance companies. The City had settled three underlying lawsuits alleging that its failure to develop and maintain storm drains caused flooding and damage to real property. The City sought defense and indemnity coverage for amounts it incurred resolving those lawsuits under insurance policies issued between 1968 and 1986.
The underlying lawsuits included Coleman I, Coleman II, and Garibian. The earliest alleged damage identified in the underlying materials occurred in 2000 or later. The City nevertheless argued that property damage had occurred during the insurers’ policy periods because inadequate drainage and repeated rainfall existed during earlier decades.
Summary-judgment standard
The court explained that summary judgment is proper when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. A material fact could affect the case’s outcome, and a dispute is genuine when the evidence could allow a reasonable factfinder to rule for the nonmoving party.
Court’s analysis
The relevant policies generally defined an “occurrence” to require personal injury or property damage during the policy period. The court relied on its earlier ruling concerning Travelers’ policies, which held that the relevant damage—not merely the event or conditions causing it—had to occur during the policy period.
The court found that none of the underlying plaintiffs had claimed that damage occurred during the long-ago policy periods. The claim forms, complaints, and settlement agreements identified damage occurring in 2002, 2003, 2012, or later. The City conceded that the underlying plaintiffs had not specifically claimed damage during Admiral’s policy periods.
The City invoked a continuous-injury theory of insurance coverage. Under that theory, the event or conditions causing damage may begin before or continue during a policy period, but property damage still must occur during the policy period. The court found that the City’s evidence showed, at most, that certain drainage conditions existed. It did not create a genuine factual dispute showing that property damage occurred during the relevant policy periods. The court characterized the City’s argument that damage must have occurred because flooding conditions were severe and ongoing as speculation, and noted that the record could show conditions without proving damage.
Ruling
The court granted the summary-judgment motions filed by Admiral Insurance Company, the National Fire Insurance Company of Hartford and Columbia Casualty Company collectively identified as the CNA Insurers, Insurance Company of the State of Pennsylvania, and American Bankers Insurance Company of Florida. The court held that the City failed to show a triable issue of fact about whether property damage occurred during the relevant policy periods. It did not reach the defendants’ additional arguments because this ground was sufficient to grant their motions.
The clerk was directed to enter judgment in favor of the defendants and close the file. The court also denied as moot several requests for judicial notice and overruled as moot the parties’ evidentiary objections.
Read the full 11-page opinion on CourtListener, the free public archive maintained by the Free Law Project.