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Court of Appeal, Fourth District, Division 3, California.

PFIZER INC., et al., Petitioners, v. The SUPERIOR COURT of Orange County, Respondent; AETNA CASUALTY & SURETY COMPANY et al., Real Parties in Interest.

No. G021411.

Decided: October 29, 1997

Troop, Meisinger, Steuber & Pasich, David W. Steuber, Martin D. Katz, Jeffrey A. Rosenfeld, Los Angeles, Covington & Burling, Mark H. Lynch, Timothy C. Hester, Washington, DC, Seth A. Tucker and Pierce O'Donnell, Los Angeles, for Petitioners. No appearance for Respondent. Sinnott, Dito, Moura & Puebla, Randolph P. Sinnott, John A. Dito, Debra R. Puebla, Suzanne M. Rufflo, Los Angeles, Simpson, Thacher & Bartlett, Barry R. Ostrager, Andrew S. Amer, New York City, Elizabeth Bassin, Julie Levy and James D. Otto, Los Angeles, for Real Parties in Interest. Lynberg & Watkins, Charles A. Lynberg, Pamela H. Roth, Los Angeles, Horvitz & Levy and Peter Abrahams, Encino, as Amici Curiae on behalf of Real Parties in Interest.


This case arises out of tort claims against Pfizer Inc. and Shiley Incorporated (Pfizer) regarding the Bjork-Shiley Convexo/Concave (BSCC) artificial heart valve.   Three categories of claims were brought against Pfizer:  (1) claims where the valves actually fractured;  (2) claims where the valves continue to function, but the patients fear they will fracture;  and (3) claims where the patients had their valves removed and replaced with other cardiac prostheses.

Subsequent to the filing of these claims, Dairyland Insurance Company sought declaratory relief regarding its duties to defend and indemnify Pfizer in the underlying tort litigation.   Pfizer cross-complained against Aetna Casualty and Surety Company (Aetna) and a number of other insurers seeking declaratory relief and specific performance of the insurers' duties to defend and indemnify.   During the course of discovery, Pfizer sought via interrogatories information regarding claims by other insureds who manufactured surgically implanted medical devices, the type of devices made and what event the insurers decided triggered the potential for coverage.   When the insurers refused this information, Pfizer brought a motion to compel responses to the interrogatories.   The trial court sustained the insurers' objections.1

Pfizer then filed a petition for writ of mandate asking us to direct the trial court to compel responses to the interrogatories.   We stayed the trial court proceedings and issued an alternative writ.2  We now issue a peremptory writ granting Pfizer the requested relief.

Factual and Procedural Background

The trial court bifurcated the litigation, designating Phase I as the determination of “trigger of coverage” issue.   It defined the trigger of coverage issue as follows:  “The ‘trigger of coverage’ issue relates to what must transpire ‘during the policy period’ of the insurers' policies in order to give rise to the insurers' obligations (subject to the other terms and conditions of the policies).  [¶] ․ ‘[T]rigger of coverage’ discovery also includes:  ․ the existence of a duty to defend vs. a duty to pay/reimburse defense costs, and the implications of the distinction between these two obligations on the ‘trigger of coverage’ issue (if any).”

Pfizer sought three categories of information from the insurers:  (1) the identities of other medical device manufacturers, other than heart valves, who had notified the insurers of potential or pending claims;  (2) the types of devices involved in those claims;  and (3) what event had triggered potential coverage.   The insurers refused to respond and Pfizer brought the underlying motion to compel.   The insurers objected, claiming these interrogatories sought irrelevant and inadmissible material, the request was overly burdensome, and the responses would violate other insureds' privacy rights.   The discovery referee concluded the information sought was “highly relevant” and, after Pfizer clarified it was not asking for any documents, recommended granting the motion.

The insurers brought their objections to the trial court.   After hearing argument regarding the relevancy of the interrogatories, the court sustained the insurers' objections and denied Pfizer's motion to compel discovery.


Code of Civil Procedure section 2017, subdivision (a) 3 permits discovery of “any matter, not privileged, that is relevant to the subject matter involved in the pending action or to the determination of any motion made in that action, if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.”

I. Relevance

 The insurers maintain the requested information is irrelevant because these comprehensive general liability (CGL) clauses are clear and unambiguous and therefore not subject to interpretation.   They are wrong because in the discovery context relevant information is any matter which “might reasonably assist a party in evaluating its case, preparing for trial, or facilitating a settlement.”  (Glenfed Development Corp. v. Superior Court (1997) 53 Cal.App.4th 1113, 1117, 62 Cal.Rptr.2d 195.)

The parties dispute what triggers coverage.   Pfizer claims implantation of the valve is the determinative event.   The insurers maintain coverage commences from the time the valve causes bodily injury.   Knowing the approach the insurers have taken in similar situations is clearly helpful to Pfizer in all aspects of the litigation process from preparation through trial or settlement.

II. Admissibility

 At issue here is the standard CGL clause which provides the insurer “will pay ․ all sums which the insured shall become legally obligated to pay as damages because of personal injury ․ to which this insurance applies, caused by an occurrence․”  “Occurrence” is defined as “an accident or a happening or event or continuous or repeated exposure to conditions which unintentionally causes injury.” 4  Pfizer claims the requested information is admissible because it demonstrates the clause's ambiguity and once that is established, it can further be used to prove the parties' intent at the time they executed the contracts.   Pfizer is correct on both points.5

 Interpretation of insurance policies is governed by the rules of construction applicable to contracts.  (Montrose Chemical Corp. v. Admiral Ins. Co., supra, 10 Cal.4th at p. 666, 42 Cal.Rptr.2d 324, 913 P.2d 878.)  “Under statutory rules of contract interpretation, the mutual intention of the parties at the time the contract is formed governs its interpretation.   (Civ.Code, § 1636.)   Such intent is to be inferred, if possible, solely from the written provisions of the contract.  (Id., § 1639.)”  (Montrose Chemical Corp. v. Admiral Ins. Co., supra, 10 Cal.4th at p. 666, 42 Cal.Rptr.2d 324, 913 P.2d 878.)   However, when a party claims the language is ambiguous, i.e., reasonably susceptible of more than one possible interpretation, the court must consider extrinsic evidence to determine whether or not the instrument is in fact ambiguous.  (Pacific Gas & E. Co. v. G.W. Thomas Drayage Etc. Co. (1968) 69 Cal.2d 33, 36-37, 69 Cal.Rptr. 561, 442 P.2d 641.)   As stated by our Supreme Court nearly two decades ago, “The test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible.”  (Id. at p. 37, 69 Cal.Rptr. 561, 442 P.2d 641.)   If an insurance policy is ambiguous, the ambiguity is resolved by interpreting the provisions in the manner the insurer reasonably believed the insured understood the provisions at the time of formation of the contract.  (Montrose Chemical Corp. v. Admiral Ins. Co., supra, 10 Cal.4th at p. 667, 42 Cal.Rptr.2d 324, 913 P.2d 878;  Civ.Code, § 1649.)   If application of this rule does not resolve the question, then the ambiguous language will be construed against the party who created the uncertainty.  (Montrose Chemical Corp. v. Admiral Ins. Co., supra, 10 Cal.4th at p. 667, 42 Cal.Rptr.2d 324, 913 P.2d 878.)

The insurers' reliance on date of implant for some claims and date of injury or its manifestation for others will in and of itself establish ambiguity.   Once this is shown, the evidence is further admissible to prove the reasonable expectations of the parties at the time the policy was issued.   (AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 822, 274 Cal.Rptr. 820, 799 P.2d 1253;  Nestle Foods Corp. v. Aetna Casualty & Surety Co. (D.N.J.1990) 135 F.R.D. 101, 106-107.)

The insurers assert this evidence is in any event inadmissible because requiring them to explain why they chose different triggering events would lead to mini trials on each insurance policy.   The insurers take an unnecessary leap.   The point is not why they have interpreted the same clauses differently, but rather that they did.   That in and of itself goes to ambiguity and the insurers' reasonable belief Pfizer understood coverage would be triggered by implantation.

III. Intrusiveness and Burden

Section 2017 requires the court to limit the scope of discovery “if it determines that the burden, expense, or intrusiveness of that discovery clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence.” (§ 2017, subd. (c).)  The insurers assert the court properly exercised its discretion because the request seeks private information and places too great a burden on the insurers.

 We acknowledge insurers are generally precluded from disclosing private information obtained in connection with an insurance transaction.   (Ins.Code, § 791.13.) Discovery of private information may be permitted, however, as long as necessary precautions are taken to protect the privacy interests affected.  (See Schnabel v. Superior Court (1993) 5 Cal.4th 704, 712, 21 Cal.Rptr.2d 200, 854 P.2d 1117;  Shaffer v. Superior Court (1995) 33 Cal.App.4th 993, 999, 39 Cal.Rptr.2d 506.)   Pfizer seeks only the names of other insureds who manufacture surgically implantable medical devices, the types of devices and the insurers' determinations regarding trigger of coverage in those cases.   This is a minimal intrusion into the privacy interests of corporate insureds which could easily be protected by an order prohibiting Pfizer from any further disclosure or use of the information.

We also reject the insurers' assertion the process of finding the requested information would be “extremely burdensome” for them.   Unlike its previous request which sought copies of all the other insureds' claims files, this time Pfizer limits its request to answers to the interrogatories.   Therefore, the insurers are not required to physically sort through every file in each insurers' possession.   While it still may necessitate review of numerous files involving many products, in this electronic age, much of this can be done via computer records.   We do not see this as an overly onerous task considering the complexity of the litigation involved.

The insurers are right on one point.   As written, the interrogatories require the insurers to search every policy ever issued for the relevant information.   This overbroad request is easily resolved by an order limiting the interrogatory responses to the same time periods as the effective dates of the policies issued to Pfizer.


Let a peremptory writ of mandate issue commanding the trial court to vacate its order of February 7, 1997, and to enter a new order granting Pfizer's motion to compel further responses to Interrogatory Numbers 68 through 70.   The court shall determine the time period for which such information must be disclosed and include the same in the order.   The previously issued stay is dissolved.   Costs are awarded to petitioners.  (Cal. Rules of Court, rule 56.4.)


1.   Previously, Pfizer sought discovery of claims files as well as interrogatory responses regarding “implantable medical devices.”   When the insurers refused to comply, Pfizer brought a motion to compel.   The discovery referee concluded the requested documents and information were relevant and likely to lead to admissible evidence.   But, he concluded, the term “implantable medical device” was vague and the demands were overly broad, burdensome and oppressive;  he recommended denial of the motion except to the extent it sought discovery related to other cardiac devices.   The trial court adopted the referee's recommendation.The insurers claim this prior denial of the motion to compel mandates a denial of this writ because Pfizer seeks discovery of identical material.   They are wrong.   The first motion was denied without prejudice, and the referee's recommendation specifically noted the issue may be subject to reconsideration as the litigation progressed.   Moreover, this request is much narrower because Pfizer no longer seeks the documents.   It also cured the vagueness problem by requesting information regarding “surgically implantable medical devices” rather than “implantable medical devices.”

2.   Aetna filed the opposition to the petition and the return on behalf of itself and several other insurance companies.   Since then, Aetna and all but one other insurer have settled with Pfizer and are no longer parties to this writ proceeding.   The insurance company that remains a real party is the Home Insurance Company, but we will refer to all the insurers collectively.

3.   All further statutory references are to the Code of Civil Procedure, unless otherwise noted.

4.   Although the parties have not provided us with copies of the actual insurance policies in dispute, they concede the language at issue is the standard language promulgated by the Insurance Services Office.

5.   In Montrose Chemical Corp.v.Admiral Ins. Co. (1995) 10 Cal.4th 645, 42 Cal.Rptr.2d 324, 913 P.2d 878, our Supreme Court determined certain CGL clauses were clear and unambiguous.  (Id. at pp. 667-669, 42 Cal.Rptr.2d 324, 913 P.2d 878.)   The insurers claim the Supreme Court's decision in Montrose applies here and as a matter of law these clauses are unambiguous.   The insurers are mistaken.In Montrose, the court considered whether the policies provided potential coverage for continuous and progressively deteriorating bodily injury caused by exposure to toxic chemicals.  (Montrose Chemical Corp.v.Admiral Ins. Co., supra, 10 Cal.4th at pp. 662-663, 42 Cal.Rptr.2d 324, 913 P.2d 878.)   After examining the policies as a whole, the court concluded the language clearly and explicitly applied to such injury.   (Id. at pp. 668-669, 42 Cal.Rptr.2d 324, 913 P.2d 878.)   The court's interpretation in Montrose is limited to claims involving progressively deteriorating injuries caused by products similar to toxic chemicals.   Its conclusion the CGL policies are clear and unambiguous cannot be applied here where three different types of injury are alleged to have been caused by defective heart valves.

SONENSHINE, Associate Justice.

WALLIN, Acting P.J., and CROSBY, J., concur.