Appeals Court Rules that Vertical and Not Horizontal Exhaustion Applies to Primary and First-Layer Excess Insurance

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Braun initiated coverage litigation in 2004, which went to trial and was on appeal when the Supreme Court handed down its Montrose III decision.

August 31, 2020
Christopher Kendrick & Valerie A. Moore – Haight Brown & Bonesteel LLP

In Santa Fe Braun v. Ins. Co. of North America (No. A151428, filed 7/13/20), a California appeals court relied on Montrose Chemical Corp. of California v. Superior Court (2020) 9 Cal.5th 215 (Montrose III), to hold that absent express policy wording to the contrary, horizontal exhaustion of all primary insurance is not required in order to trigger first-layer excess coverage.

Beginning in 1992, Braun was sued for asbestos injuries from refineries it constructed and maintained. Braun had primary coverage and multiple layers of excess coverage for the relevant time period. After defending for years, the primary insurers reached a settlement under which they paid their limits into a trust which would fund the ongoing defense and settlements. Certain of the excess insurers settled and also contributed to the trust.

Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP

Mr. Kendrick may be contacted at ckendrick@hbblaw.com
Ms. Moore may be contacted at vmoore@hbblaw.com



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