Jump to Navigation
Jump to Content

State v. California Continental Ins. Co.

ELR Citation: 39 ELR 20010
Nos. No. E041425, (Cal. App. 4th Dist., 01/05/2009)

A California appellate court held that a trial court erred by limiting the state's insurance coverage for cleanup costs at the Stringfellow hazardous waste site to the policy limits in effect for any one policy period. In California, when there is a continuous loss spanning multiple policy periods, any insurer that covered any policy period is liable for the entire loss, up to the limits of its policy. The trial court, therefore, correctly ruled that each of the insurers covered the total amount of the state's liability for property damage, including property damage that actually occurred before or after their policy periods. However, the state is entitled to "stack" the policy limits of the different policy periods. Based on the policy language and on a consistent line of authority in California that allows stacking in other multiple coverage situations, the state was entitled to stack the policy limits of all applicable policies across all applicable policy periods. The trial court's no-stacking ruling, which limited the state's recovery to $48 million, was therefore erroneous.