Skip to main content

MONTROSE CHEMICAL CORPORATION OF CALIFORNIA v. AMERICAN MOTORISTS INSURANCE COMPANY

Reset A A Font size: Print

Court of Appeal, Second District, Division 1, California.

MONTROSE CHEMICAL CORPORATION OF CALIFORNIA, et al., Plaintiffs and Respondents, v. AMERICAN MOTORISTS INSURANCE COMPANY, et al., Defendants and Appellants.

No. B058060.

Decided: January 25, 1993

Drinker Biddle & Reath, John Chesney, Lawrence A. Nathanson and Paul H. Saint–Antoine, Philadelphia, PA, Mindlin Tigerman & Holtzman and Michael Holtzman, Coudert Brothers, Douglas L. Hallett, Robert M. Churella, and William M. Samoska, Los Angeles, Boornazian, Jensen & Garthe, Charles I. Eisner, Alan E. Swerdlow, Oakland, and John W. Morrison, Chicago, IL, pro hac vice, O'Melveny & Myers, Ralph W. Dau, H. Douglas Galt, Holly E. Kendig and Daniel Aronowitz, Los Angeles, for defendants and appellants. Latham & Watkins, David L. Mulliken, Kristine L. Wilkes, Barry J. Shotts and Donna J. Williams, San Diego, Covington & Burling, Kirkpatrick & Lockhart, Washington, DC, Paul, Hastings, Janofsky & Walker, Munger, Tolles & Olson, Los Angeles, and Marc S. Mayerson, Washington, DC, for plaintiffs and respondents.

In these consolidated declaratory relief actions, we must determine whether the trial court properly ordered the defendant insurers to pay their insureds' defense costs.   We affirm the order, which we find to be a final judgment (order) on a collateral issue (the duty to defend).

INTRODUCTION

The insureds, Montrose Chemical Corporation of California and Stauffer Chemical Company, are being sued in several pending environmental pollution actions in state and federal courts.

Plaintiffs Montrose and Stauffer herein are seeking declaratory relief to establish the duty of six defendant insurers to defend and to indemnify them in the underlying tort actions.   In addition, Stauffer is seeking breach of contract damages, and Montrose is seeking damages for breach of the covenant of good faith and fair dealing and breach of statutory duties.

With respect to the insurers' duty to defend, the superior court has summarily adjudicated that such duty exists and will continue to exist until such time as a court determines there is no potential for indemnity.   Despite those summary adjudication orders, several insurers unilaterally refused to pay portions of the insureds' mounting defense costs.   Their refusal led the insureds to move for an order requiring the immediate payment of defense costs in each underlying action.

The superior court granted the motion and ordered the insurers to pay, within 30 days of receipt, the insureds' defense bills in the underlying liability actions.   Four insurers have appealed.

The appellant insurers contend the order to pay is invalid.   They point out that because the summary adjudication (duty to defend) orders were not final for the purpose of appeal, and because there are unresolved issues concerning indemnity, coverage, breach of contract, bad faith, and statutory violations, no final judgment has been or could be entered at this stage of the proceedings.   The appellants contend any interlocutory order to pay defense costs must comply with the pleading, proof, and bond requirements of a preliminary injunction (or some other provisional remedy).

The insureds, on the other hand, contend the summary adjudication orders establishing the duty to defend were final for the purpose of appeal, and that the insurers could have immediately appealed those orders but did not.   The insureds maintain that the subsequent enforcement order is thus a permanent injunction which is exempt from the bond and other procedural requirements of a preliminary injunction.

We agree with the insurers that the summary adjudication (duty to defend) orders were not final for the purpose of appeal, and they did not waive their right to appellate review by failing to bring an immediate appeal of those interlocutory orders.   However, we conclude the summary adjudication orders were incorporated in the final judgment (order) on a collateral issue (the duty to defend), which has in effect been severed from the remaining issues in this action.

FACTS

A. The Underlying Tort Actions

Montrose, a defunct chemical company, manufactured DDT for use in pesticides from 1947 until 1982.   Stauffer (now known as Rhone–Poulenc Basic Chemicals Company) owned 50 percent of Montrose at all relevant times.

Numerous actions are pending against Montrose and Stauffer for property damage (and one alleging bodily injuries) resulting from alleged contamination at sites where they allegedly manufactured their product or disposed of hazardous waste.

1. The Stringfellow Cases

United States v. Stringfellow (C.D.Cal.Civ. No. 83–2501) and Newman v. Stringfellow (Super.Ct. Riverside County, No. 165994MF) (jointly, the Stringfellow cases) involve the alleged dumping of hazardous waste by the insureds and about 15 others at the Stringfellow acid pits in Riverside County.   In United States v. Stringfellow, the United States and the State of California are seeking reimbursement, pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, 42 U.S.C. § 9601 et seq.), from the insureds for the costs of investigating, removing and remediation of alleged contamination, as well as compensation for damaging the state's natural resources.   In Newman v. Stringfellow, a private party toxic tort action, the plaintiffs seek damages from the insureds for personal injuries and property damage caused by the alleged dumping of hazardous waste.   Both Stringfellow cases allege the damage occurred beginning in 1956 and continuing to the present.

2. Levin Metals Cases

Parr–Richmond Terminal Co. v. Levin Metals Corp. (N.D.Cal. No. C 85–4776 SC), Levin Metals Corp. v. Parr–Richmond Terminal Co. (N.D.Cal., Nos. C 84–6273 SC and 84–6324 SC) and Levin Metals Corp. v. Parr–Richmond Terminal Co. (Super.Ct. Contra Costa County, No. 255836) (collectively referred to as the Levin Metals cases) 1 involve the alleged contamination of the United Heckathorn site in Contra Costa County.   These cases began as a state fraud action concerning Levin Metals's 1981 purchase of the United Heckathorn site from Parr–Richmond, who allegedly had failed to disclose the alleged contamination to Levin Metals.   Montrose and Stauffer were brought into the litigation on indemnity and contribution theories.   Montrose and Stauffer allegedly had contracted for the treatment, processing or disposal of DDT and other chemical substances at the United Heckathorn site at some time during the period when the alleged contamination occurred, from 1947 to the present.

3. Iron Mountain Proceedings

In addition to the above litigation, Stauffer is involved in proceedings (hereafter the Iron Mountain proceedings) before the Environmental Protection Agency (EPA) concerning alleged contamination of the Iron Mountain Mine, which Stauffer formerly owned, near Redding, California.   Pursuant to the CERCLA (42 U.S.C. § 9607(a)), the EPA notified Stauffer in 1982 of its possible liability for cleanup costs associated with the alleged contamination of this site.   Following investigations, the EPA ordered Stauffer in 1989 and 1990 to perform remedial work at the site.   The EPA also notified Stauffer in 1990 of its potential liability for alleged damages to natural resources at the site from the late 1950's to the present.

B. The Insurance Policies

Montrose and Stauffer have been covered since 1960 by comprehensive general liability (CGL) insurance policies issued by seven carriers.   The four carriers involved in this appeal are Insurance Company of North America (INA), American Motorists Insurance Company (AMICO), The Travelers Indemnity Company, and Centaur Insurance Company (which covered Montrose only).2

All of the relevant CGL policies contained language substantially similar to the following:  “The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:  (a) Bodily injury and/or (b) Property damage to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the Insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent․”

C. The Instant Complaints

On April 3, 1986, Montrose filed its complaint for declaratory relief against all seven CGL carriers.   The complaint alleged the carriers had agreed to pay Montrose's interim defense costs under a reservation of rights.   Because the carriers had reserved their rights, Montrose sought a declaration requiring each carrier to provide a defense and to indemnify Montrose for any damages or settlement costs incurred in the Stringfellow and Levin Metals cases.   In addition, Montrose sought “specific performance” of the insurance policies.

Thereafter, Montrose and six CGL carriers executed a second interim defense agreement whereby the carriers agreed to pay Montrose's past and future defense costs in the Levin Metals cases under a reservation of rights.   AMICO, however, did not sign the agreement and refused to pay Montrose's defense costs in the Levin Metals cases.   As a result, Montrose amended its complaint and added causes of action against AMICO for breach of the covenant of good faith and fair dealing and breach of statutory duties (Ins.Code, § 790.03).

Stauffer filed its own action for declaratory relief and breach of contract against, among others, appellants INA, AMICO, and Travelers.3  Stauffer alleged these insurers had agreed to defend Stauffer in the Stringfellow cases subject to a reservation of rights.   Because the carriers had reserved their rights, Stauffer sought a declaration requiring each carrier to provide a defense and to indemnify Stauffer for any damages or settlement costs incurred in the Stringfellow cases and the Iron Mountain proceedings.   Stauffer also requested breach of contract damages for the carriers' past failures to pay defense costs.   Unlike Montrose, Stauffer did not pray for specific performance of the insurance policies.

Montrose's and Stauffer's declaratory relief actions were thereafter consolidated in the trial court.

1. The First Duty to Defend Order Regarding the Stringfellow and Levin Metals Cases

Montrose moved for summary adjudication of the carriers' duty to defend Montrose against the Stringfellow and Levin Metals cases.   Stauffer joined in the motion.4

The carriers unanimously opposed the motion on the ground that they were already providing a defense (with the exception of AMICO in the Levin Metals cases) to both insureds under a reservation of rights.   The carriers maintained that because there was no justiciable issue, any ruling would be advisory only.

The trial court disagreed that its ruling would be advisory only.   While the interim defense agreement permitted the insurers to withdraw their defense unilaterally, the trial court's summary adjudication order stated that the duty to defend would exist until there was a contrary judicial determination.5  Moreover, the court noted the interim defense agreement required each insurer to pay only one-seventh of the defense costs.   The court stated:  “[T]his finding that there is a duty to defend can't help but alter the interim defense agreement.   It has to alter that.  [¶]  Whatever the interim defense agreement provides for, the duty to defend is there larger, broader in scope than what I understand the interim agreement to be.”

At the conclusion of the summary adjudication hearing, the court stayed discovery of underlying facts concerning coverage defenses (e.g., whether the alleged property damage and personal injury occurred during the respective policy periods, whether the insureds expected or intended the injury, and whether the loss was in progress when the respective policies were issued).   The discovery stay was in effect until January 1992.

The trial court granted the insureds' summary adjudication motion as to all carriers except Admiral, who subsequently won summary judgment.   Montrose appealed from the summary judgment in favor of Admiral, which this Division reversed.   That matter is now pending before the California Supreme Court.   (Montrose Chemical Corp. v. Admiral Ins. Co. (1992) 9 Cal.App. 4th 1021, 5 Cal.Rptr.2d 358, review granted May 21, 1992 (S026013).)

2. The Second Duty to Defend Order Regarding the Iron Mountain Proceedings

 Thereafter, Stauffer moved for summary adjudication of the carriers' duty to defend Stauffer in the Iron Mountain proceedings.   Stauffer brought its motion against INA, AMICO, and Travelers (as well as National Union, who is not involved in this appeal).6

In support of its motion, Stauffer relied on two prior rulings of May 25, 1990, in which the court had determined that (1) the Iron Mountain proceedings constituted a “suit” within the meaning of the policies, and (2) the 1989 and 1990 EPA orders (requiring Stauffer to perform remedial work at the allegedly contaminated site) required Stauffer to expend money “ ‘because of property damage’ which potentially occurred during the [carriers'] policy periods.”

In opposition, the insurers contended there were triable issues of fact because known losses are not insurable, and there is no coverage for expected or intended pollution.   Additionally, the insurers maintained that Stauffer, as the moving party, had the burden of negating the insurers' coverage defenses based on pollution exclusions, waiver, and late notice.  (We note that the identical summary judgment burden of proof issue is currently pending before the California Supreme Court in Montrose Chemical Corp. v. Superior Court (1992) 8 Cal.App.4th 260, 10 Cal.Rptr.2d 687, review granted on October 16, 1992 (S024390).)

The trial court granted Stauffer's motion in full, declaring the insurers owed a duty to defend Stauffer against the Iron Mountain proceedings, and they had breached their duty to defend.   The trial court stated that if and when the insurers prevail on their own summary judgment motion establishing, as a matter of law, the absence of any potential for indemnity, the court would enter an order terminating the duty to defend.

3. The Carriers' Summary Judgment Motion

Concurrently with Stauffer's motion, the carriers filed a cross motion for summary judgment or summary adjudication of their policies' various pollution exclusions.   The carriers asserted the pollution exclusions precluded indemnification of the insureds for losses incurred in all of the underlying actions, including the Iron Mountain proceedings.

In order to prove the applicability of the pollution exclusions, the carriers sought to introduce evidence regarding liability, including whether and when the insureds polluted the various sites.   The trial court, however, excluded this evidence because it pertained to disputed fact issues which must still be litigated in the underlying liability suits.   The trial court told the carriers to file new moving papers without reference to disputed underlying facts.   The record does not indicate that the carriers ever refiled their summary judgment motion.

4. The Carriers' Unilateral Refusal to Pay

The carriers maintained, both below and on appeal, that the summary adjudication (duty to defend) orders did not alter the interim defense agreement, which affords them the unilateral right to terminate defense payments.   The carriers rely on the reporter's transcript of the first summary adjudication hearing, in which the trial court stated its ruling “does not interpret the interim defense agreement and neither terminates nor continues it.” 7  Also the carriers rely on the first summary adjudication order which states:  “This Court does not make any interpretation of or ruling with regard to the Interim Defense Agreements․”

Based on their interpretation of the summary adjudication orders, several insurers ceased paying defense costs in some of the cases without first obtaining a court order relieving them of their duty to defend.   The two insurers who have repudiated their defense obligations to Montrose in the Levin Metals cases are AMICO, which has never contributed toward those costs, and Travelers, which had been contributing toward Levin Metals defense costs until about November 1990.   The three carriers who have refused to defend Stauffer in the Iron Mountain proceedings are INA, AMICO, and Travelers.

5. The Order to Pay

As a result of the unilateral refusal by several carriers to pay for defense costs in the Levin Metals cases and Iron Mountain proceedings, Montrose and Stauffer sought an equitable enforcement order requiring the carriers to continue making (or begin making) timely defense payments in each underlying case.

In opposition, the carriers contended the summary adjudication orders were interlocutory and, as such, were immediately enforceable only if the insureds satisfied the pleading, proof, and bond requirements for a mandatory preliminary injunction or some other form of statutory provisional remedy.

At oral argument below, Montrose and Stauffer denied that they were seeking either a preliminary injunction or some other statutory provisional remedy.   Montrose and Stauffer explicitly requested the court to enforce its prior summary adjudication orders pursuant to its inherent equitable power.

The trial court ordered the carriers to pay, within 30 days of receipt, the defense bills in the underlying tort actions.   No bond was required.   In addition, the court ordered the carriers to reimburse the insureds for past defense costs with interest.

INA, AMICO, Travelers, and Centaur appeal from the March 22, 1991, order to pay.

APPEALABILITY OF THE VARIOUS ORDERS

If the summary adjudication (duty to defend) orders were final for the purpose of appeal when entered, as the insureds contend, then they were immediately appealable and the insurers lost their right to appellate review of those orders by failing to file timely appeals.  (Taper v. City of Long Beach (1982) 129 Cal.App.3d 590, 607, 181 Cal.Rptr. 169.)   We conclude, however, that the summary adjudication orders were not final for the purpose of appeal until they were incorporated in the subsequent final order to pay defense costs.   We find that the order to pay defense costs is a final collateral order which, in effect, severed the duty to defend from the remaining issues of this case.

A. The Summary Adjudication Orders

 Generally, summary adjudication orders are not appealable.  (See Code Civ.Proc., § 437c, subd. j.)   Numerous cases support the rule that summary adjudication orders, which leave other issues between the parties undecided, are not appealable.  (Field Research Corp. v. Superior Court (1969) 71 Cal.2d 110, 111, 77 Cal.Rptr. 243, 453 P.2d 747;  Gaillard v. Natomas Co. (1989) 208 Cal.App.3d 1250, 1255, fn. 1, 256 Cal.Rptr. 702;  Barth–Wittmore Ins. v. H.R. Murphy Enterprises, Inc. (1985) 169 Cal.App.3d 124, 136, 214 Cal.Rptr. 894;  IFS Industries, Inc. v. Stephens (1984) 159 Cal.App.3d 740, 756, 205 Cal.Rptr. 915;  Niederer v. Ferreira (1983) 150 Cal.App.3d 219, 222–223, 197 Cal.Rptr. 685;  DeGrandchamp v. Texaco, Inc. (1979) 100 Cal.App.3d 424, 430–437, 160 Cal.Rptr. 899;  Trani v. R.G. Hohman Enterprises, Inc. (1975) 52 Cal.App.3d 314, 315–316, 125 Cal.Rptr. 34;  King v. State of California (1970) 11 Cal.App.3d 307, 310, 89 Cal.Rptr. 715;  Rich v. Siegel (1970) 7 Cal.App.3d 465, 469, 86 Cal.Rptr. 665.)   The purpose of the rule is to prevent the piecemeal disposition of several counts in a complaint.  (DeGrandchamp v. Texaco, Inc., supra, 100 Cal.App.3d at p. 431, 160 Cal.Rptr. 899.)

We recognize, however, that whether an order is labeled interlocutory or final is not determinative of its appealability.  “ ‘[I]t is not the label but rather the substance and effect of a court's judgment or order which determines whether or not it is appealable.  [Citation.]’  (In re Marriage of Loya (1987) 189 Cal.App.3d 1636, 1638 [235 Cal.Rptr. 198]․)”  (Viejo Bancorp, Inc. v. Wood (1989) 217 Cal.App.3d 200, 205, 265 Cal.Rptr. 620.)

“It is sometimes very difficult to determine whether a decree is a ‘final judgment’ within the meaning of that term as used in our statutes concerning appeals․   The general rule applicable in determining whether a judgment is final or merely interlocutory ․ is that if anything further in the nature of judicial action on the part of the court is essential to a final determination of the rights of the parties, the judgment is interlocutory only.”  (Security–First Nat. Bk. v. Superior Court (1933) 132 Cal.App. 683, 693, 23 P.2d 1055.)

1. The Allegations of the Complaints

 Both insureds sought declaratory relief of at least two separate issues, the duty to defend and the duty to indemnify.   The duty to defend is broader than the duty to indemnify;  the two duties are not identical and the insureds were not required to litigate both issues prior to the termination of the underlying tort actions.  (See State Farm & Casualty Co. v. Cooperative of American Physicians, Inc. (1984) 163 Cal.App.3d 199, 205, 209 Cal.Rptr. 251.)

While the duty to defend may be determined at the outset of the underlying litigation, the duty to indemnify cannot be established until the completion of the underlying litigation.  (Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 271, 54 Cal.Rptr. 104, 419 P.2d 168 (“No one can determine whether the third party suit does or does not fall within the indemnification coverage of the policy until that suit is resolved․”)) 8  This means, as has often been noted, that the duty to defend “ ‘may exist even where coverage is in doubt and ultimately does not develop.’  (State Farm Mut. Auto. Ins. Co. v. Flynt (1971) 17 Cal.App.3d 538, 548 [95 Cal.Rptr. 296]․)”  (Saylin v. California Ins. Guarantee Assn. (1986) 179 Cal.App.3d 256, 263, 224 Cal.Rptr. 493.)   While it may seem incongruous to require an insurer to defend even though it may not have to indemnify, to hold otherwise would eventually make the duty to defend no broader than the duty to indemnify.   (Cal–Farm Ins. Co. v. TAC Exterminators, Inc. (1985) 172 Cal.App.3d 564, 580, 218 Cal.Rptr. 407.)

 In this case, the insureds elected to plead two separate causes of action regarding the duty to defend and duty to indemnify.   The resolution of the former does not resolve the latter issue, which must await the determination of the underlying actions.

Moreover, other unresolved issues remain between the parties.   Montrose alleged causes of action for bad faith and breach of statutory duties against AMICO, and Stauffer sought breach of contract damages for past defense costs.

Due to the various distinct causes of action contained in the complaints, further judicial action is necessary to reach a final determination of the rights of the parties.   Applying the general rule, we find the summary adjudication (duty to defend) orders are interlocutory and are not separately appealable.

2. The Collateral Order Exception

 Although at first glance the collateral order exception appears applicable to the summary adjudication orders, we conclude otherwise.

The collateral order exception to the one final judgment rule exists “[w]hen a court renders an interlocutory order collateral to the main issue, dispositive of the rights of the parties in relation to the collateral matter, and directing payment of money or performance of an act․”  (In re Marriage of Skelley (1976) 18 Cal.3d 365, 368, 134 Cal.Rptr. 197, 556 P.2d 297.)  “Such a determination is substantially the same as a final judgment in an independent proceeding.  [Citations.]”  (Ibid.;  United Pacific Ins. Co. v. Hanover Ins. Co. (1990) 217 Cal.App.3d 925, 941, 266 Cal.Rptr. 231.)

When the insureds moved for summary adjudication concerning the defense of the Levin Metals and Stringfellow cases, the carriers (except AMICO) were at that time voluntarily paying those defense costs subject to a reservation of rights.   Despite AMICO's failure to pay defense costs in the Levin Metals cases, the insureds did not request an order directing the payment of money.   The transcript reflects that this omission was intentional rather than inadvertent:  “THE COURT:  ․ I have adjudicated duty to defend but not made any orders with respect to amounts of money or schedule of payment;  is that correct?  [¶] [Counsel for Stauffer]:  Correct.  [¶] [Counsel for Montrose]:  Correct.”

In view of the insureds' deliberate failure to seek a specific order directing the payment of money despite nonpayment by AMICO, it would be unreasonable now to construe the initial summary adjudication order as being something other than purely declaratory in character.  (Cf. Rolapp v. Federal Bldg., etc., Assn. (1936) 11 Cal.App.2d 337, 342, 53 P.2d 974;  Sunset Scavenger Corp. v. Oddou (1936) 11 Cal.App.2d 92, 97–98, 53 P.2d 188;  City of San Diego v. Cuyamaca Water Co. (1930) 209 Cal. 105, 151, 287 P. 475.)

Travelers states on appeal that it did not view the first summary adjudication order as an order to pay money, and hence did not file a writ petition or seek appellate review immediately after the summary adjudication order was entered.   Travelers states it did not believe at that time that it had “grounds upon which to demonstrate entitlement to extraordinary relief.”   Travelers' explanation is credible in light of the existing circumstances, and we refuse to belatedly rule that Travelers (or any of the other carriers) unwittingly waived the right to seek appellate review of the first summary adjudication order by failing to bring an immediate appeal.

Under these unique facts, we find that the collateral order exception is inapplicable to the first summary adjudication order.

When the second summary adjudication (duty to defend) order pertaining to the Iron Mountain proceedings was heard, none of the insurers (INA, AMICO, and Travelers) was paying for Stauffer's defense costs.   Despite their failure to pay, Stauffer did not ask for an order directing the payment of money.   In granting Stauffer's summary adjudication motion, the trial court declared the three insurers had a duty to defend Stauffer in the Iron Mountain proceedings, and found that they had breached their duty to defend.   Significantly, the court specifically stated that it was making no other findings:  “There is no request for further findings in connection with any damages or any other concern, only those two issues [duty to defend and breach of duty to defend].”  The trial court further stated that if and when the insurers prevailed on their own summary judgment motion establishing, as a matter of law, the absence of any potential for indemnity, the court would enter an order terminating the duty to defend.

In view of Stauffer's deliberate failure to seek a specific order directing the payment of money despite the failure to pay by all three insurers, we believe it would be unreasonable now to construe the second summary adjudication order as being something other than purely declaratory in character.   Under these unique facts, we find that the collateral order exception is inapplicable to the second summary adjudication order.

B. The Order to Pay Defense Costs

 Unlike the prior summary adjudication orders, the March 22, 1991, order to pay defense costs fits the collateral order exception to the general rule of nonappealability.   The March 22nd order disposed of the rights of the parties in relation to a collateral issue, namely the duty to defend, and directed the immediate payment of money.   As such, the March 22nd order is “substantially the same as a final judgment in an independent proceeding.  [Citations.]”   (In re Marriage of Skelley, supra, 18 Cal.3d at p. 368, 134 Cal.Rptr. 197, 556 P.2d 297.)

Although we have found no case on point, United Pacific Ins. Co. v. Hanover Ins. Co., supra, 217 Cal.App.3d 925, 266 Cal.Rptr. 231 is the most analogous to our situation.   In United Pacific, the appellate court stated:  “The prior order meets the test for appealable collateral matters.   The order unequivocally commanded the payment of money.   It also finally adjudicated a matter collateral to the main action.   The main issue in dispute was coverage.   The [trial] court, however, decided a functionally separate matter.   In effect, it ruled that the parties' settlement agreement bound them to follow the arbitrator's decision until a judge disturbed that decision when ruling on the coverage issue.   Admittedly an ‘interim’ decision, at the same time, it finally determined the shape of the parties' ‘interim’ status.   In particular, it determined which of two insurers had the right to use a substantial sum of money during a potentially protracted period.

“This order appears functionally equivalent to several interim decisions held appealable collateral matters.   For example, in In re Marriage of Skelley [, supra ] 18 Cal.3d 365, 368 [134 Cal.Rptr. 197, 556 P.2d 297] ․, the Supreme Court held that an order regarding temporary support in a dissolution action was an appealable collateral matter.   Similarly, in Stockton v. Rattner (1972) 22 Cal.App.3d 965, 968 [99 Cal.Rptr. 787] ․, the court held that an order authorizing the sale of property and impoundment of proceeds pendente lite was appealable as a collateral matter.   Like these cases, the interim order established rights pendente lite that required the transfer of substantial amounts of money.”  (United Pacific Ins. Co. v. Hanover Ins. Co., supra, 217 Cal.App.3d at pp. 941–942, 266 Cal.Rptr. 231.)

By ordering the immediate payment of defense costs, the court below in effect severed the duty to defend from the remaining issues in these consolidated actions.   Whether the trial court ultimately dismisses the other issues without prejudice or continues to postpone their adjudication until the resolution of the underlying tort actions is not relevant to this appeal.

ISSUES ON APPEAL

(I) Travelers contends the summary adjudication orders are invalid.  (II) The carriers contend the superior court abused its discretion by enforcing the summary adjudication (duty to defend) orders pursuant to its inherent equitable power rather than requiring the insureds to comply with the pleading, proof, and bond requirements of a preliminary injunction.  (III) Centaur contends the trial court erred by failing to apportion the carriers' defense payments according to their respective policy limits.

I

We reject Travelers' challenges to the summary adjudication orders.

“In reviewing the propriety of [the summary adjudication rulings] we are guided by well established principles.  ‘ “The purpose of a partial summary judgment is to dispose of one or more issues before trial so that the parties may focus on the questions remaining.”  [Citations.]   Summary judgment is proper if no material factual issue exists.  [Citation.]   Our review is limited to the facts shown in the documents presented to the trial court in making our independent determination of their construction and effect as a matter of law.  [Citation.]’  (Downey Savings & Loan Assn. v. Ohio Casualty Ins. Co. (1987) 189 Cal.App.3d 1072, 1086–1087 [234 Cal.Rptr. 835]․)”  (Republic Indemnity Co. v. Superior Court (1990) 224 Cal.App.3d 492, 496–497, 273 Cal.Rptr. 331.)

A. The Determination of the Duty to Defend

 When a defense is tendered, the insurer may look at both the facts alleged in the underlying complaint and the total facts it learns from all sources in determining whether it owes a defense (Dillon v. Hartford Acc. & Indemn. Co. (1974) 38 Cal.App.3d 335, 340, 113 Cal.Rptr. 396;  State Farm Mut. Auto. Ins. Co. v. Flynt (1971) 17 Cal.App.3d 538, 548, 95 Cal.Rptr. 296;  State Farm Mut. Auto. Ins. Co. v. Allstate Ins. Co. (1970) 9 Cal.App.3d 508, 526, 88 Cal.Rptr. 246).   But this does not permit the insurer to launch a full scale investigation and thus delay indefinitely its determination of whether there is a duty to defend.   By that time the underlying litigation may have concluded, leaving the insured without the benefit of having had a defense.   That is why the “duty to defend is determined at the time suit is brought;  not at the conclusion of litigation.  [Citation.]”  (Cal–Farm Ins. Co. v. TAC Exterminators, Inc., supra, 172 Cal.App.3d at pp. 580–581, 218 Cal.Rptr. 407.)   In making the initial determination of whether the duty exists, the insurer looks at “those facts known by the insurer at the inception of a third party lawsuit.”  (Saylin v. California Ins. Guarantee Assn., supra, 179 Cal.App.3d at p. 263, 224 Cal.Rptr. 493, italics added.)

 This does not mean, however, that having begun providing a defense, the insurer must continue even after it becomes certain there is no potential of indemnity.   For example, if an insurer in a declaratory relief action obtains summary judgment establishing, as a matter of law, that the claim is not covered by the policy, it may turn back the defense when the summary judgment becomes final.  (Fireman's Fund Ins. Co. v. Chasson (1962) 207 Cal.App.2d 801, 807, 24 Cal.Rptr. 726 (“[O]nce the judgment [of no liability under the policy] in the declaratory relief action becomes final ․, the insurer's duty to defend such actions shall cease since the duty to defend does not continue beyond the final determination that the claim is not within the coverage of the policy.  [Citations.]”).)

Although in this case the trial court declared the duty to defend would exist until such time as a court determined there was no possibility of indemnity, we do not decide whether an insurer must always obtain summary judgment before turning back the defense to its insured.   In this case, the trial court recognized that the insureds, faced with lengthy and complex litigation concerning decades of alleged pollution, were entitled to a judicial decree establishing that the duty to defend would continue until a court, rather than the insurers, determined there was no potential of indemnity.   The courts have recognized that the insurers have a corresponding right to seek a judicial decree establishing the absence of a duty to defend:  “Where an insurer questions the existence of coverage ․ the alternative of an early declarative determination of the issue exists.  [Citation.]”  (California Ins. Guarantee Assn. v. Superior Court, (1991), 231 Cal.App.3d 1617, 1626, 283 Cal.Rptr. 104.)9

B. The Refusal to Adjudicate Coverage Defenses

 Travelers contends the trial court erred in granting summary adjudication of the duty to defend without first resolving the carriers' coverage defenses, citing Allstate Ins. Co. v. Fisher (1973) 31 Cal.App.3d 391, 107 Cal.Rptr. 251 (Fisher ), and two pre-Gray (Gray v. Zurich Insurance Co., supra, 65 Cal.2d 263, 54 Cal.Rptr. 104, 419 P.2d 168) cases cited in Fisher:  State Farm etc., Ins. Co. v. Superior Court (1956) 47 Cal.2d 428, 304 P.2d 13 (State Farm ), and General Ins. Co. of America v. Whitmore (1965) 235 Cal.App.2d 670, 45 Cal.Rptr. 556 (General ).

In Fisher, the appellate court upheld a dismissal of an automobile liability insurance carrier's declaratory relief action, holding that the issues of permissive use and agency must be determined first in the pending tort action.  (Fisher, supra, 31 Cal.App.3d at pp. 394–398, 107 Cal.Rptr. 251.)   In reaching this result, the Fisher court noted that a noncoverage decision in the declaratory relief action would, under the facts of that case, also establish that the insured was not liable.   The Fisher court distinguished State Farm, supra, 47 Cal.2d 428, 304 P.2d 13, and General, supra, 235 Cal.App.2d 670, 45 Cal.Rptr. 556, in which the insurer's and insured's interests were not similarly aligned (i.e., a noncoverage decision in the declaratory relief action based on the insured's commission of an intentional tort would establish the insured's liability).

The Fisher court explained the dichotomy between cases in which the insurer's and insured's interests are aligned and opposed as follows:  “Since the carrier provides representation to its insured in the tort action, the only way to avoid a conflict of interest between the two is to allow separate actions.  [Citation.]   Thus, in State Farm ․, supra, ․, and General Ins. ․, supra, ․ the carrier could take a position adverse to its insured in the declaratory relief action on the issue of coverage, and, if coverage were found, then the carrier could take a conflicting position in defending its insured in the tort action.   However, in the case at bench the insured and the carrier have taken the same position on an issue determinative of coverage and liability.   If Fisher was operating Peyton's automobile without permission or agency, then there is no coverage and no liability on the part of Peyton.   In addition, Fisher's liability will not be changed by a finding either way on permission or agency.”  (Fisher, supra, 31 Cal.App.3d at p. 396, 107 Cal.Rptr. 251.)

In this case, however, the existence of a conflict of interest between Travelers and the insureds supports the trial court's decision to await the conclusion of the underlying actions before deciding the coverage defenses.   And in any event, Fisher's rationale ignores the insurer's contractual obligation under Gray v. Zurich Insurance Co., supra, to defend a suit which potentially seeks damages within the coverage of the policy.  (65 Cal.2d at p. 275, 54 Cal.Rptr. 104, 419 P.2d 168.)   Moreover, Fisher was decided prior to San Diego Federal Credit Union v. Cumis Ins. Society, Inc. (1984) 162 Cal.App.3d 358, 208 Cal.Rptr. 494, which held that an insurer “is required to pay for independent counsel for an insured when the insurer provides its own counsel but reserves its right to assert noncoverage at a later date.”  (Id. at p. 361, 208 Cal.Rptr. 494.)   Today, the widespread use of Cumis counsel provides a significant means of avoiding the conflict of interest which was noted by the court in Fisher.

As the superior court properly recognized, there are important limits to what can be adjudicated in a declaratory relief action brought while the underlying liability cases are pending.   We agree with the superior court's determination that coverage defenses based on pollution exclusions may not be adjudicated while the underlying tort actions are pending if to do so would prejudice the insured.

“Generally, an action in declaratory relief will not lie to determine an issue which can be determined in the underlying tort action.  ‘The declaratory relief statute should not be used for the purpose of anticipating and determining an issue which can be determined in the main action.   The object of the statute is to afford a new form of relief where needed and not to furnish a litigant with a second cause of action for the determination of identical issues.’  (General of America Ins. Co. v. Lilly (1968) 258 Cal.App.2d 465, 470 [65 Cal.Rptr. 750.]․)  ‘Under section 1061 of the Code of Civil Procedure the court may refuse to exercise the power to grant declaratory relief where such relief is not necessary or proper at the time under all of the circumstances.   The availability of another form of relief that is adequate will usually justify refusal to grant declaratory relief.   The refusal to exercise the power is within the court's legal discretion and will not be disturbed on appeal except for abuse of discretion.  (Girard v. Miller [1963] 214 Cal.App.2d 266, 277 [29 Cal.Rptr. 359]․)’  (Id. [258 Cal.App.2d] at p. 471 [65 Cal.Rptr. 750]․)”  (California Ins. Guarantee Assn. v. Superior Court, supra, 231 Cal.App.3d at pp. 1623–1624, 283 Cal.Rptr. 104.)

Finally, we note that our determination that the trial court correctly refrained from determining factual issues which will be tried in the underlying liability cases is consistent with the approach applied in Gon v. First State Ins. Co. (9th Cir.1989) 871 F.2d 863 and Independent Petrochem. Corp. v. Aetna Cas. & Sur. (D.D.C.1986) 654 F.Supp. 1334.

C. Misapplication of the Burden of Proof

Travelers next contends the trial court misapplied the burden of proof by requiring the insurers to prove their coverage defenses rather than requiring the insureds, as the moving parties, to disprove the insurers' coverage defenses.   General summary judgment principles support Travelers' position (see Barnes v. Blue Haven Pools (1969) 1 Cal.App.3d 123, 127, 81 Cal.Rptr. 444 (“on the motion for summary judgment, the moving party must generally negative the matters which the resisting party would have to prove at the trial”)).

Travelers cites Select Ins. Co. v. Superior Court (1990) 226 Cal.App.3d 631, 639, 276 Cal.Rptr. 598, in support of its position that the insureds must rebut, as a matter of law, each of the insurers' affirmative defenses in order to prevail on summary judgment.   The Select case, however, is procedurally distinguishable in that the summary adjudication motion on the duty to defend was brought after the underlying action was resolved by stipulated judgment.

The usual allocation of the burden of proof upon the moving party is appropriate if the underlying facts are undisputed.   There are many cases which demonstrate that when undisputed extrinsic facts show there is no potential for coverage as a matter of law, the insurer will be relieved of its duty to defend.  (See, e.g., State Farm Mut. Auto. Ins. Co. v. Longden (1987) 197 Cal.App.3d 226, 233, 242 Cal.Rptr. 726;  Fire Ins. Exchange v. Jiminez (1986) 184 Cal.App.3d 437, 442, 229 Cal.Rptr. 83;  Royal Globe Ins. Co. v. Whitaker (1986) 181 Cal.App.3d 532, 536–538, 226 Cal.Rptr. 435;  California Union Ins. Co. v. Club Aquarius, Inc. (1980) 113 Cal.App.3d 243, 247, 169 Cal.Rptr. 685;  State Farm Mut. Auto. Ins. Co. v. Flynt, supra, 17 Cal.App.3d at p. 543, 95 Cal.Rptr. 296.)

 However, when the facts necessary to establish or defeat coverage in a declaratory relief action are concurrently being disputed in the underlying litigation, the usual allocation of the burden of proof conflicts with the necessarily uncertain nature of the duty to defend.   As previously discussed, the right to a defense is unique in that it is contingent upon a showing of potential coverage (Gray v. Zurich Insurance Co., supra, 65 Cal.2d at p. 271, 54 Cal.Rptr. 104, 419 P.2d 168).   The duty to defend must be determined at the beginning, rather than the end, of the underlying action (or when the defense is tendered).   If the factual allegations of the underlying complaint, the terms of the policy, and the extrinsic evidence known to the insurer establish a potential for liability, the insurer owes a defense unless and until it can prove, as a matter of law, that there is no potential for coverage.

The insured should not be made to litigate common disputed fact issues in a declaratory relief action in order to disprove coverage defenses as a prerequisite to obtaining a defense in pending liability actions.   By requiring the prompt resolution of a carrier's duty to defend prior to the resolution of the underlying liability actions, the courts protect the insured's right to peace of mind and security, a right which “would ring resoundingly hollow were the holder compelled to simultaneously enforce rights under the policy and defend a costly and potentially devastating claim․”  (Lambert v. Commonwealth Land Title Ins. Co. (1991) 53 Cal.3d 1072, 1081, 282 Cal.Rptr. 445, 811 P.2d 737.)

 The fact that a carrier may subsequently seek declaratory relief terminating its duty to defend if undisputed facts conclusively show, as a matter of law, that there is no potential for liability, does not render the trial court's initial finding of a potential for liability (i.e., its finding of a duty to defend) erroneous, advisory, or unenforceable.   Where, as here, the trial court enters summary adjudication establishing the existence of a duty to defend and orders the immediate payment of defense costs, the carrier must pay for a defense until it can prove, as a matter of law, that there is no potential for liability.  (See Fireman's Fund Ins. Co. v. Chasson, supra, 207 Cal.App.2d at p. 807, 24 Cal.Rptr. 726.)   Whether or not the insurers may then succeed in obtaining reimbursement of defense costs from the insured is a matter beyond the scope of this opinion.  (See Insurance Co. of the West v. Haralambos Beverage Co. (1987) 195 Cal.App.3d 1308, 1322–1323, 241 Cal.Rptr. 427.)

II

According to the insurers, because the summary adjudication orders were interlocutory orders, the trial court could not order them to pay defense costs without issuing a proper preliminary injunction or applying some other provisional remedy.

The insurers contend the insureds failed to prove the requirements of a preliminary injunction:  the likelihood of success on the merits, the inadequacy of their legal remedy, and the threat of irreparable harm absent injunctive relief.  (Code Civ.Proc., §§ 526, 527.)   The insurers further assert the order must be reversed because of the failure to require a bond.  (Code Civ.Proc., § 529;  Oksner v. Superior Court (1964) 229 Cal.App.2d 672, 687, 40 Cal.Rptr. 621;  Miller v. Santa Margarita Land, etc., Co. (1963) 217 Cal.App.2d 764, 766, 31 Cal.Rptr. 866.)   The insurers also point out that the granting of a mandatory injunction pending trial, and before the rights of the parties have been adjudicated, is extremely rare and limited to cases where irreparable injury will flow from its refusal.  (Hagen v. Beth (1897) 118 Cal. 330, 331, 50 P. 425.)

The insureds, on the other hand, contend the trial court properly issued a permanent injunction.  “A permanent injunction is very different from a pendente lite injunction.   A permanent injunction is an equitable remedy for certain torts or wrongful acts of a defendant where a damage remedy is inadequate.   A permanent injunction is a determination on the merits that a plaintiff has prevailed on a cause of action for tort or other wrongful act against a defendant and that equitable relief is appropriate.   A permanent injunction is not issued to maintain the status quo but is a final judgment on the merits.  (6 Witkin, Cal.Procedure (3d ed. 1985) Provisional Remedies, §§ 250, 251, pp. 216–218.)   It is reviewed on appeal for the sufficiency of the evidence to support the judgment.  (Richards v. Dower (1883) 64 Cal. 62, 64 [28 P. 113]․)”  (Art Movers, Inc. v. Ni West, Inc. (1992) 3 Cal.App.4th 640, 646, 4 Cal.Rptr.2d 689.)

The summary adjudication orders established the existence of the duty to defend pending a contrary judicial order.   The subsequent order directing the payment of defense costs, which is the subject of this appeal, in effect reiterated the existence of the duty to defend and enforced that duty by ordering the payment of money.   At that point, nothing further remained to be litigated in this action with respect to the duty to defend.   Whether or not the duty to indemnify is ultimately determined to exist is irrelevant to the present judicial determination and enforcement of the broader duty to defend, which requires only the potential of indemnity.  (See Saylin v. California Ins. Guarantee Assn., supra, 179 Cal.App.3d at p. 263, 224 Cal.Rptr. 493.)

By establishing the existence of the duty to defend and by enforcing its decree, the trial court in effect severed the duty to defend from the remaining issues and entered a final judgment (order) on that collateral issue.   Although the trial court did not explain that it was making a severance order, we are not bound in our appellate review to the trial court's stated reasons for its ruling.   We review the ruling, not its rationale.   (Barnett v. Delta Lines, Inc. (1982) 137 Cal.App.3d 674, 682, 187 Cal.Rptr. 219.)

The superior court possesses the authority to enforce its declaratory relief decrees.  “An action for declaratory relief is a suit in equity.  [Citation.]   The jurisdiction of a court of equity to enforce its decrees is coextensive with its jurisdiction to determine the rights of the parties, and it has power to enforce its decrees as a necessary incident to its jurisdiction.   Except where the decree is self-executing, jurisdiction of the cause continues for this purpose, or leave may be expressly reserved to reinstate the cause for the purpose of enforcing the decree, or to make such further orders as may be necessary.  [Citations.]   A court of equity can mold its decrees to suit the exigencies of the case.  [Citation.]   Where equity has acquired jurisdiction for one purpose, it will retain that jurisdiction to the final adjustment of all differences between the parties arising from the causes of action alleged.  [Citations.]   Where a court has taken jurisdiction of a suit in equity it may determine all legal as well as equitable issues in order to completely dispose of the matters in controversy.”  (Klinker v. Klinker (1955) 132 Cal.App.2d 687, 694, 283 P.2d 83;  Day v. Sharp (1975) 50 Cal.App.3d 904, 912–913, 123 Cal.Rptr. 918;  Rynsburger v. Dairymen's Fertilizer Coop., Inc. (1968) 266 Cal.App.2d 269, 278, 72 Cal.Rptr. 102;  Beeler v. Beeler (1961) 193 Cal.App.2d 548, 550, 14 Cal.Rptr. 460;  Ecker Bros. v. Jones (1960) 186 Cal.App.2d 775, 785–787, 9 Cal.Rptr. 335;  Jaffa v. Guttman (1959) 175 Cal.App.2d 790, 796–797, 346 P.2d 876;  Mills v. Mills (1956) 147 Cal.App.2d 107, 116, 305 P.2d 61.)

The carriers contend the trial court abused its discretion in issuing the enforcement order because neither complaint requested injunctive relief, and Stauffer's complaint, unlike Montrose's, did not seek specific performance of the insurance contracts.   However, “the court [sitting in equity] is not strictly limited to the particular relief requested in the prayer of the complaint.  [Citation.]”  (Oceanside Community Assn. v. Oceanside Land Co. (1983) 147 Cal.App.3d 166, 177, 195 Cal.Rptr. 14.)  “It is a cardinal rule of equity practice that under a prayer for general relief the court may grant any relief conformable to the case made by the pleadings and the evidence, although it may not be the relief asked by a special prayer.   This rule is based upon the fundamental principle of chancery that a court of equity will endeavor to finally dispose of litigation so as to preclude further litigation between the same parties and upon the same subject matter.  [Citation.]   It is also an accepted rule that when a party comes into a court of equity pleading facts which entitle him to some equitable relief, the court will assume jurisdiction of the entire controversy, notwithstanding the form of the pleading, and will disregard the specific prayers in order to grant the relief which the proof warrants as within the equities of the entire case.  [Citation.]”   (Sonnicksen v. Sonnicksen (1941) 45 Cal.App.2d 46, 52, 113 P.2d 495.)

Specific performance of a contract is premised upon the following requisites:  “A showing by plaintiff of (1) the inadequacy of his legal remedy;  (2) an underlying contract that is both reasonable and supported by adequate consideration;  (3) the existence of a mutuality of remedies;  (4) contractual terms which are sufficiently definite to enable the court to know what it is to enforce;  and (5) a substantial similarity of the requested performance to that promised in the contract.  [Citations.]”  (Tamarind Lithography Workshop, Inc. v. Sanders (1983) 143 Cal.App.3d 571, 575, 193 Cal.Rptr. 409.)

 Whether the enforcement order in this case is viewed as a permanent injunction or specific performance, we conclude the evidence supports the order.   The carriers contend the evidence is insufficient to support the order because the insureds failed to show they lacked sufficient resources to fund their own defense pending a final determination of coverage.   The carriers further assert the insureds have a sufficient legal remedy because they may sue for breach of contract damages if they can prove the carriers erroneously denied a defense.

 In our view, however, proof of an insured's insufficient means should not be a prerequisite for obtaining an immediate defense against suits which potentially seek damages within the coverage of the policy.   The insured should not have to wait until it has a fully matured breach of contract action and forgo its right to a defense under the policy.   One purpose of purchasing CGL insurance is to obtain peace of mind that the carrier will defend against third party lawsuits which potentially seek damages within the coverage of the policy.   None of the policies herein required the insureds to fund their own defense and then seek reimbursement for defense costs when it became certain that the claims were covered by the policies.   The right to seek reimbursement and to sue for breach of contract are inadequate remedies as a matter of law because the duty to defend is much broader than the duty to indemnify.   We believe that sound public policy mandates that the duty to defend, if it is to have any meaning independent of the duty to indemnify, must be enforced equally on behalf of all insureds without imposing a means test.

 AMICO contends the trial court should not have granted specific performance of the insurance policies because “a contract which requires a continuing series of acts and demands cooperation between the parties for the successful performance of those acts is not subject to specific performance.  [Citing Thayer Plymouth Center, Inc. v. Chrysler Motors Corp. (1967) 255 Cal.App.2d 300, 304, 63 Cal.Rptr. 148, in which the court refused to specifically enforce a dealership contract.]”   While we recognize that courts have declined to order the specific performance of personal service contracts or distributorship agreements which are virtually impossible for the court to supervise (see, e.g., O'Brien v. O'Brien (1925) 197 Cal. 577, 586–588, 241 P. 861;  Adams v. Williams Resorts, Inc. (1962) 210 Cal.App.2d 456, 462–463, 26 Cal.Rptr. 656), this enforcement order required the payment of invoices within 30 days of receipt during a limited period ending either upon the conclusion of the litigation or the judicial termination of the duty to defend.   The payment of defense bills can hardly be compared to a personal service contract or distributorship agreement or other similar situation.

We conclude the pleading and proof supported the enforcement order, and that it was proper for the court to require the immediate payment of invoices within 30 days of receipt, including delinquent invoices.   Our holding that the enforcement order was proper “follows the settled rule that when a court of equity has obtained jurisdiction of the parties and of the subject-matter it will seek to administer complete relief, particularly with respect to finding the means of enforcing its decrees against a delinquent defendant.  [Citation.]”  (Rolapp v. Federal Bldg., etc., Assn., supra, 11 Cal.App.2d at p. 343, 53 P.2d 974.)

III

 Centaur contends the trial court erred in failing to determine the proper apportionment of defense costs among the CGL carriers.   Centaur's policy period covered less than seven months (March 20, 1982, to October 13, 1982), and according to Centaur's reply brief, its “policy limits are only $500,000, well below all other primary carriers' policy limits, except INA.”   Centaur asserts that “[i]f the trial court's March 22, 1991 order is upheld, then considering Centaur's limited time on risk and minor policy limits, Centaur's share of the defense exposure cannot be on a joint and several basis but must be proportionately smaller than all other carriers.”

We are unaware of any requirement that defense costs be apportioned at this stage of the proceedings when it is uncertain which policies, if any, cover the (potential) loss.   Centaur cites Gon v. First State Ins. Co., supra, 871 F.2d 863 in support of the proposition that defense costs may be apportioned between the insurer and the insured for covered and noncovered damages.   The Gon case does not stand for that proposition.   Although the trial court in Gon had at one point relieved the insurer of the obligation of paying defense costs for claims not covered by the policy (the December 15, 1987, clarification order), the trial court reconsidered that ruling and ordered the insurer to pay all defense costs as incurred without distinguishing potentially covered claims from uncovered claims (the March 16, 1988, clarification order).   The trial court noted that the insurer had reserved its right to seek reimbursement of any defense costs which it should not have paid.   The Ninth Circuit agreed with the trial court's March 16, 1988, order denying apportionment of defense costs.   The appellate court stated that the insurer could not apportion covered and noncovered claims at the insured's expense in advance of trial when it was impossible to determine which acts were committed negligently (covered claims) as opposed to intentionally (noncovered claims).

In any event, Centaur is not seeking an apportionment requiring the insureds to pay for the defense of noncovered claims.   Accordingly, the other foreign cases cited by Centaur on this point are not relevant or binding.

What Centaur seeks is an apportionment of costs among the carriers according to various considerations which Centaur has not even listed in its brief.   Centaur has cited no authority to support such an apportionment in an insured's declaratory relief action brought before completion of the underlying litigation.   The cases cited by Centaur involve actions between insurers to allocate defense costs following the conclusion of the underlying litigation (Travelers Indem. Co. v. Reliance Ins. Co. (1974) 12 Cal.3d 133, 115 Cal.Rptr. 232, 524 P.2d 360;  Government Employees Ins. Co. v. St. Paul Fire, etc., Ins. Co. (1966) 243 Cal.App.2d 186, 52 Cal.Rptr. 317) and are thus distinguishable.

Centaur has failed to meet its burden of demonstrating error by the trial court.

DISPOSITION

We affirm the order.   Respondents are entitled to recover their costs on appeal.

FOOTNOTES

1.   Although the record indicates Montrose and Stauffer have obtained summary judgment in the state Levin Metals case pending in Contra Costa County Superior Court, we are not aware if that judgment is final.

2.   The four appellants' policy periods are:  (1) INA (Jan. 1, 1960, to Jan. 1, 1961;  Jan. 1, 1963 to Jan. 1, 1964;  Jan. 1, 1965, to Jan. 1, 1969;  and Jan. 15, 1981 to Jan. 15, 1986 (the last period covers Stauffer only));  (2) AMICO (Jan. 1, 1969, to Mar. 1, 1971);  (3) Travelers (Mar. 1, 1971, to July 1, 1977);  and (4) Centaur (Mar. 20, 1982, to Oct. 13, 1982, covering Montrose only).The other three carriers who insured Montrose (but are not involved in this appeal) are:  (a) National Union Fire Insurance Company of Pittsburgh, PA (July 1, 1977, to March 1, 1980);  (b) Canadian Universal Insurance Company, Ltd. (March 20, 1980, to March 20, 1982);  and (c) Admiral Insurance Company (October 13, 1982, to March 20, 1986).   National Union also insured Stauffer during the same policy period.

3.   Centaur, the fourth appellant herein, was not named in Stauffer's complaint because it did not issue a policy to Stauffer.   The other insurers named in Stauffer's complaint (National Union Fire Insurance Company of Pittsburgh, PA;  Home Insurance Company;  and Certain Underwriters at Lloyd's of London and various companies) are not involved in this appeal.

4.   Plaintiffs Montrose and Stauffer also moved simultaneously to dismiss the indemnification issue from their complaints, without prejudice, as being premature and not ripe for adjudication pending the conclusion of the underlying liability actions.   Although this dismissal motion is not mentioned in any party's appellate brief, it bears relevance to the appellants's contention, discussed infra, that the summary adjudication orders will not be final for purposes of appeal until they are incorporated into a final judgment.Although the record is not clear, we infer from the reporter's transcript of November 9, 1990, that the insurers never filed opposition to the dismissal motion because the trial court declined to hear it.   On November 9, 1990, Montrose's attorney, Richard Conn, stated in court in the presence of all counsel that the motion to dismiss the indemnification issue was not set for briefing by the carriers because the court had “indicated it was not inclined to hear it at that moment․”   The trial court responded, “That's right.   I recall it.”

5.   The minute order stated in relevant part:  “The court finds that there is a duty to defend until a motion is brought by specific defendant for summary adjudication.   The defendants retain all reservation of rights and the court not having reviewed the interim defense agreement states that said agreement goes beyond the scope of this motion.”Similarly, the summary adjudication order stated in relevant part:  “The insurance companies ․ have had a duty to defend Montrose and Stauffer since the inception of the [Stringfellow and Levin Metals cases], have a present duty to defend Montrose and Stauffer in those actions, and shall have an ongoing duty to defend Montrose and Stauffer in those actions until such time as the Court adjudicates that there is no potential for indemnity․”  (Italics added.)   The order reiterated that this ruling did “not affect the Carriers' reservation of rights” and did not interpret the interim defense agreements.

6.   Although Stauffer also sought a declaration that the insurers had breached their duty to defend, Stauffer's summary adjudication motion did not request a determination of whether Stauffer was entitled to a monetary damages award.   We note that a money damages claim may be joined with an action for declaratory relief:  “An action for declaratory relief is intended to resolve questions regarding the future conduct of the parties.   When the only remaining issue between the parties is a fully matured cause of action for money damages, declaratory relief is improper.  Bachis v. State Farm Mut. Auto. Ins. Co. (1968) 265 CA2d 722 [71 Cal.Rptr. 486] ․ (declaratory relief by insured inappropriate to resolve whether insurer owed insured additional money for claim on uninsured motorist coverage).   However, a fully matured cause of action for money damages can be joined with an action for declaratory relief when the request for declaratory relief is otherwise appropriate.  CCP § 1060.”  (2 Cal. Liability Insurance Practice (Cont.Ed.Bar 1992) § 20.6, p. 20–7.)

7.   In its November 2, 1990, letter notifying Montrose of its intention to withdraw its defense of the Levin Metals cases, Travelers stated:  “Counsel has made us aware that Judge Wisot's order provided that the carriers have a duty to defend only until such time that the carriers can prove no possibility of coverage.   Based on our investigation, and government documents, we believe The Travelers can now prove that there is no duty to indemnify against these claims.   Counsel has further advised that Judge Wisot has made no determinations that duties arise under any specific Travelers policy at issue.”

8.   It is now a “well-accepted rule that ‘the carrier must defend a suit which potentially seeks damages within the coverage of the policy․’  (Gray v. Zurich Insurance Co.[, supra,] 65 Cal.2d 263, 275 [54 Cal.Rptr. 104, 419 P.2d 168]․)”  (State Farm Mut. Auto. Ins. Co. v. Longden (1987) 197 Cal.App.3d 226, 233, 242 Cal.Rptr. 726.)  “The duty to defend is much broader than the duty to indemnify.   An insurer's duty to defend must be analyzed and determined on the basis of any potential liability arising from facts available to the insurer from the complaint or other sources available to it at the time of the tender of defense.   If the insurer is obliged to take up the defense of its insured, it must do so as soon as possible, both to protect the interests of the insured, and to limit its own exposure to loss.   Unlike the duty to indemnify, which is only determined after liability is finally established, the duty to defend must be assessed at the outset of the case.  [Citations.]”  (CNA Casualty of California v. Seaboard Surety Co. (1986) 176 Cal.App.3d 598, 605, 222 Cal.Rptr. 276.)

9.   Code of Civil Procedure section 1060 provides in relevant part:  “Any person interested ․ under a contract, or who desires a declaration of his rights or duties with respect to another, ․ may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action ․ for a declaration of his rights and duties․   He may ask for a declaration of rights or duties, either alone or with other relief;  and the court may make a binding declaration of such rights or duties, whether or not further relief is or could be claimed at that time.   The declaration may be either affirmative or negative in form and effect, and such declaration shall have the force of a final judgment.   Such declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.”  (Italics added.)Code of Civil Procedure section 1062 provides:  “The remedies provided by this chapter are cumulative, and shall not be construed as restricting any remedy, provisional or otherwise, provided by law for the benefit of any party to such action, and no judgment under this chapter shall preclude any party from obtaining additional relief based upon the same facts.”

ORTEGA, Associate Justice.

SPENCER, P.J., and DUNN, J.*, concur.

Copied to clipboard