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Aerojet-General Corp. v. Commercial Union

ELR Citation: 37 ELR 20240
Nos. No. C051124, (Cal. App. 3d Dist., 09/13/2007)

The court holds that sums agreed to be paid as a settlement of litigation are not subject to indemnification as "damages" under excess liability insurance policies. The case arose after a rocket and missile manufacturer sued for breach of contract and declaratory relief against its excess liability insurance carriers due to their refusal to indemnify the company for costs it incurred remediating groundwater pollution pursuant to a settlement agreement in an underlying action. But because the court in the underlying case did not order the payment of any money, the insurers had no duty under the terms of their insurance policies to indemnify the company for the costs it incurred in implementing its settlement agreement.