Corporate law firm

by Michael Griffin Michael

Plaintiff insured sued defendant insurer for breach of contract, breach of the implied covenant of good faith and fair dealing, and unfair business practices. The Mendocino County Superior Court, California, granted the insurer's motion for summary judgment. The insured appealed.

The insured operated a facility that composted organic materials including manure, grape pomace, and yard trimmings. The primary issue in the case was whether a pollution exclusion in the insured's liability insurance policies barred coverage for liability for offensive and injurious odors emanating from the insured's compost facility and spreading over a mile away of corporate law firm. The court concluded that the insurer had no duty under the policies to defend or indemnify the insured from liability for the compost odors. The odors emanating from the compost facility were an impurity, something objectionable and unwanted. In the ordinary and popular sense of the words of the pollution exclusion, the odors were "discharged" and "released" by the composting and "escaped" from the facility. The widespread dissemination of offensive and injurious odors from the facility was environmental pollution and thus excluded from coverage by the pollution exclusion. The court's conclusion that the insurer had no duty to defend or indemnify the insured disposed of all causes of action, including those for unfair business practices and bad faith, insofar as they involved odors from the insured's operations.

The judgment was affirmed.

Petitioner insurer sought a writ of mandate to direct respondent court to bar plaintiff insured from discovering the names, addresses, and records of certain petitioner claimants or, in the alternative, to place certain restrictions on plaintiff's use of the material discovered. Plaintiff brought an action for violation of Cal. Ins. Code § 790.03(h), breach of contract, and breach of the duty of fair dealing and good faith.

The trial court barred plaintiff insured's counsel from contacting other claimants until those claimants responded to a court-approved letter. Petitioner insurer sought a writ of mandate explicitly preventing plaintiff's counsel from seeking to represent other claimants against petitioner and from all discovery of the names and records of such claimants on the ground that evidence of a pattern of unfair practices was irrelevant as a matter of law in private actions against insurers under Cal. Ins. Code § 790.03(h). The court found that the discovery of the names and records of the claimants with whom petitioner's claims adjuster attempted settlements was relevant to the subject matter of the action and might lead to admissible evidence. The court found that there was no indication that plaintiff's counsel planned to engage in, or had engaged in solicitation in violation of the professional conduct standards. The court denied the writ and concluded that counsel's "communication" was not for the purpose of seeking professional employment for pecuniary gain but for the purpose of developing relevant evidence in the existing lawsuit.

The court denied petitioner insurer's request for a writ of mandate. The court concluded that the information sought by plaintiff insured was relevant to the subject matter of the action and might lead to admissible evidence.