Appeal Court Decision 2

 

Appeal Court Decision

Plaintiff insurers sought review of an order of the Superior Court of Los Angeles County (California), which granted defendant insureds' summary judgment motion and ordered plaintiffs to pay defendants' defense bills in the underlying environmental pollution actions.

 

Overview: business lawyers

 

Plaintiffs insureds sought declaratory relief to establish the duty of defendant insurers to defend and to indemnify them in the underlying environmental tort actions after defendants refused to pay portions of plaintiffs' mounting defense costs. The trial court granted plaintiffs' motion and ordered defendants to pay plaintiff's defense bills and defendants appealed. The court concluded 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. The court found that the order to pay defense costs was a final collateral order which, in effect, severed the duty to defend from the remaining issues and the collateral order exception to the general rule that summary judgment orders was not appealable was not applicable. Plaintiffs 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 court concluded that the proof supported the enforcement order, and that it was to require the immediate payment of invoices within 30 days of receipt.

 

Outcome

The court affirmed the lower court's summary adjudication orders which were incorporated in the final judgment on a collateral issue, the duty to defend, which was in effect severed from the remaining issues in the action.