Case Briefs

On March 9, 2009, the California Supreme Court ruled that, in the context of a 1970 ISO pollution exclusion, the relevant discharge for application of the exclusion's “sudden and accidental” exception was the release of pollutants from a containment site rather than the initial deposit of wastes into the site. Additionally, the California high court held that where a loss has two causes ' one covered and one uncovered ' if the policyholder can establish that the covered cause was a substantial factor in causing an indivisible loss, then the entire loss will be deemed covered. State of California v. Allstate Ins. Co. et al., No. S149988 (Cal. March 9, 2009). The court therefore reversed a summary judgment for the insurers that had been granted below. Specifically, the court found that, to the extent the state can show “sudden and accidental” releases proximately caused the damage for which it was held liable, it is contractually entitled to indemnity for that liability. The court found that the summary judgment record reflected at least a triable issue of fact as to whether 1969 and 1978 discharges caused by heavy rainfalls were substantial factors in causing contamination of soils and groundwater downgradient from the Stringfellow site. The court also found that the record reflected a triable issue as to whether that property damage, or the cost of repairing it, could be quantitatively divided among the various causes of contamination. It remanded for further proceedings on those issues.