ELR Citation: ELR 20390
No(s). A082765 (Cal. Ct. App. Dec 28, 2000)

The court affirms a trial court holding that three comprehensive general liability insurers could not be required to defend or indemnify an insured property owner with respect to environmental cleanup costs and other liabilities arising from property that the owner did not own during the relevant policy periods. The trial court declared itself bound by stare decisis to state precedent to find that where the insurance policies are ambiguous on the issue of liability for after-acquired property, the reasonable expectations of a policyholder could not include the expectation of coverage for the liability in question. On appeal, the property owner claimed that the state precedent relied on by the trial court contradicted California Supreme Court statements that liability is triggered by the occurrence of property damage. The court first holds that, here, there is no doubt that coverage was triggered on the subject properties with respect to any policies covering those properties. The California Supreme Court, however, has never addressed the issue of whether comprehensive general liability policies cover liabilities arising from ownership of properties acquired after the policy period. The court then holds that it will not depart from state precedent that set forth that it is neither reasonable nor consonant with the terms of general liability policies to require insurers to cover liabilities based on facts that did not occur until after the policy period.

Counsel for Plaintiff
Donald W. Brown
Brobeck, Phleger & Harrison
550 W. C St., San Diego CA 92101
(619) 234-1966

Counsel for Defendant
Lisa L. Pan
Law Offices of Donald J. Deshaw
393 Vintage Park Dr., San Mateo CA 94404
(650) 349-3555

Before Reardon and Woolard,^* JJ.