Travelers Property Casualty Company of America v. Salesforce.com, Inc.
3:20-cv-09443
| N.D. Cal. | Apr 13, 2021Background
- Travelers sued Salesforce in federal court seeking a declaration that Travelers has no duty to defend Salesforce in underlying Texas state-court litigation, plus indemnification and reimbursement claims.
- The Texas plaintiffs originally included negligence claims; negligent conduct is agreed to be covered by Travelers’ policy, while intentional/knowing conduct is excluded.
- Salesforce moved to dismiss Travelers’ declaration that there is no duty to defend and argued the other claims were premature.
- The Northern District of California concluded the Texas litigation is at an early stage and factual issues (negligence vs. intentional conduct) could create potential coverage.
- The court held Travelers has a continuing duty to defend and granted Salesforce’s motion to dismiss Travelers’ declaratory no-duty claim (without prejudice to reimbursement claims after the Texas case concludes).
- Travelers’ indemnification and reimbursement claims were dismissed without prejudice as premature; Salesforce would be entitled to a stay while the Texas case proceeds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to defend | No duty to defend; seeks declaration of no coverage | Underlying facts could give rise to covered negligent claims; duty continues | Travelers has a continuing duty to defend; declaratory no-duty claim dismissed without prejudice |
| Indemnification / reimbursement (ripeness) | Seeks indemnity and reimbursement now | Premature until Texas litigation concludes; factual overlap warrants stay | Claims are premature and dismissed without prejudice; may be renewed after Texas case; stay appropriate |
Key Cases Cited
- Montrose Chemical Corporation of California v. Superior Court, 6 Cal. 4th 287 (Cal. 1993) (insurer's duty to defend continues until insurer conclusively shows no potential for coverage)
- Gray v. Zurich Insurance Co., 65 Cal. 2d 263 (Cal. 1966) (negligent-only theories can trigger coverage even when intentional acts are excluded)
- First Mercury Insurance Co. v. Great Divide Insurance Co., 203 F. Supp. 3d 1043 (N.D. Cal. 2016) (indemnity/reimbursement claims premature before underlying litigation concludes)
- Tamrac, Inc. v. California Insurance Guarantee Association, 63 Cal. App. 4th 751 (Cal. Ct. App. 1998) (indemnity claim not ripe prior to resolution of underlying suit)
- Great American Insurance Co. v. Superior Court, 178 Cal. App. 4th 221 (Cal. Ct. App. 2009) (stay may be warranted where central factual issues overlap underlying litigation)