Transport Insurance v. TIG Insurance
136 Cal. Rptr. 3d 315
Cal. Ct. App.2012Background
- Transport insured Aerojet under a 1973 liability policy and entered into three reinsurance contracts (with TIG and Seaton) the same year; Aerojet submitted numerous site-related claims over the years, with Transport initially denying loss claims based on pollution exclusions but paying some expenses; the California Supreme Court held site investigative expenses could be covered in Aerojet (1997).
- Aerojet settled with Transport in 1999 for $26.655 million; Transport sought reimbursement from reinsurers for a portion of the settlement and later filed final loss bills in 1999.
- Between 1999 and 2006, Transport and the reinsurers exchanged many communications; Transport filed separate reinsurance suits against TIG and Seaton in 2006, which were consolidated.
- A trial court (Judge Woolard) denied summary adjudication on accrual, adopted a Stronghold-based accrual framework, and instructed the jury that accrual occurred upon a denial or after a reasonable time after submission of final proofs; the jury found the actions were filed too late.
- Transport appealed, arguing instructional error, tolling, and estoppel, but the court applied invited-error doctrine and affirmed the judgment.
- Key authorities discussed include Stronghold, Prudential-LMI, Prudential, Continental Cas. Co. v. Stronghold, and California cases on tolling, accrual, and estoppel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does a reinsurance claim accrue for statute of limitations purposes? | Stronghold controls; accrual after final proofs or denial. | Accrual should follow New York law and reasonable time after submission. | Accrual occurs when loss is due and payable: after submission of proofs, then after a reasonable time or denial. |
| Was the tolling theory properly submitted or required? | Equitable tolling should be applied; trial court rejected it. | Tolling not needed or invited by the parties; not requested by Transport. | Invited-error doctrine bars Tolling as error; no denial of tolling instruction shown; tolling not required. |
| Was equitable estoppel a permissible defense or instruction? | Equitable estoppel should bar limitations in view of communications. | Estoppel not pleaded; insufficient evidence of reasonable reliance. | Estoppel not supported; not pleaded and insufficient evidence of reliance. |
| Did Transport’s invited- error defense foreclose reversal on instructional issues? | Mary M. allows invited error to be overcome by acquiescence. | Transport invited the instruction; cannot now assign error. | Invited error doctrine bars Transport’s claims of instructional error. |
Key Cases Cited
- Continental Cas. Co. v. Stronghold Ins. Co., Ltd., 77 F.3d 16 (2d Cir. 1996) (accrual when loss due and payable; reasonable time after notice of loss)
- Prudential Reinsurance Co. v. Superior Court, 3 Cal.4th 1118 (1992) (reinsurance doctrines; tolling during investigation)
- Prudential-LMI Com. Ins. v. Superior Court, 51 Cal.3d 674 (1990) (tolling during insurer’s investigation of claim)
- Aerojet-General Corp. v. Transport Indemnity Co., 17 Cal.4th 38 (Cal. Supreme Court 1997) (site investigation expenses; broad coverage implications)
- Metcalf v. County of San Joaquin, 42 Cal.4th 1121 (2008) (instruction requirements; no sua sponte duty to instruct)
- Mary M. v. City of Los Angeles, 54 Cal.3d 202 (1991) (invited error doctrine in jury instructions; acquiescence vs. invitation)
- Electronic Equipment Express, Inc. v. Seiler & Co., 122 Cal.App.3d 834 (Cal. App. Dist. 3) (invited error; counsel’s actions effect)
- Lantzy v. Centex Homes, 31 Cal.4th 363 (2003) (equitable estoppel elements; reliance)
- Null v. City of Los Angeles, 206 Cal.App.3d 1528 (1988) (instruction-availability doctrine)