Opinion
Rehearing Denied Dec. 29, 1997.
Previously published at 59 Cal.App.4th 898 Eisen & Johnston Law Corporation, Jay-Allen Eisen, Marian M. Johnston, Douglas R. Thorn, Montague, Cochrane & Viglione, Dennis L. Viglione, Sacramento, for Petitioners.
No appearance for Respondent.
Larson & Burnham, Gary R. Selvin, Bradley M. Zamczyk, Oakland, Bullivant, Houser, Bailey, Pendergrass & Hoffman, James G. Driscoll and Kevin S. Mapes, Gold River, for Real Parties in Interest.
Retired Associate Justice of the Court of Appeal, Third District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
In these consolidated proceedings on petitions for writs of mandate, we are called upon to determine whether a decision on an issue in a private, nonjudicial arbitration proceeding can be used by nonparties to the arbitration to collaterally estop a party to the arbitration from relitigating that issue in subsequent litigation. We conclude that collateral estoppel may not be so used.
Our conclusion is dictated by the nature of arbitration, that is, "... an arbitrator's decision is not generally reviewable for errors of fact or law, whether or not such error appears on the face of the award and causes substantial injustice to the parties." (Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 6, 10 Cal.Rptr.2d 183, 832 P.2d 899.) It is fair that the parties to an arbitration are bound by the decision of the arbitrator to the extent they have mutually agreed to bear the risk of error in order to avoid the time and expense of a judicial resolution of their dispute. (Id. at pp. 11-12, 10 Cal.Rptr.2d 183, 832 P.2d 899.) However, the risk of nonreviewable factual and legal error is otherwise abhorrent to our system of judicial dispute resolution. Accordingly, in view of the relaxed standards applicable to an arbitration, and the nonreviewability of an arbitrator's decision, we hold that such a decision may not be given effect beyond that to which the parties to the arbitration agreed.
We also consider whether the defendant insurance companies were entitled to summary adjudication on the theory that their policies did not cover the asserted claims. We will conclude that the insurance defendants were also not entitled to summary adjudication on that ground. Accordingly, we shall issue peremptory writs of mandate directing the superior court to set aside its orders granting summary adjudication based upon collateral estoppel and lack of coverage.
FACTUAL AND PROCEDURAL BACKGROUND
The underlying litigation involves a parcel of land that for many years was used as an automobile sales and service facility. The land was owned by Eugene and Kathryn Boyd. Prior to 1958, Boyd operated an automobile business on the property. In 1958 Vandenberg leased the land from Boyd and began operating an automobile business thereon. Vandenberg occupied the land under a series of leases from 1958 until 1988. In 1988 Vandenberg discontinued the business and possession of the land reverted to Boyd.
The Boyds are not involved in these writ proceedings or in the underlying litigation between Vanderberg and the insurance companies. But earlier litigation had been commenced by the Boyds and continued by Kathryn after Eugene's death. For convenience we will refer to the interests of the Boyds by use of the singular Boyd.
The plaintiffs in the underlying litigation and the petitioners in these proceedings are John B. Vandenberg, Jeanette B. Vandenberg, James A. Keil, Bonnie J. Keil, Vandenberg & Keil, a general partnership, and Vandenberg Motors, Inc. These persons had various interests in the business that was known as Vandenberg Motors and for convenience and clarity we shall refer to them collectively as Vandenberg.
Boyd decided to demolish the buildings and sell the land and in the process removed three underground waste oil tanks. Testing revealed contamination of soils and groundwaters underlying the land. Boyd commenced an action against Vandenberg alleging causes of action for breach of contract, breach of the covenant of good faith and fair dealing, public nuisance, private nuisance, negligence, waste, trespass, strict liability, equitable indemnity, declaratory relief, and injunctive relief.
Over the years Vandenberg had obtained liability insurance coverage from various companies including Phoenix Assurance Company of New York (Phoenix), The Glens Falls Insurance Company (Glens Falls), Continental Insurance Company (Continental), TIG Insurance Corporation (TIG), Centennial Insurance Company (Centennial), and United States Fidelity & Guaranty Company (USF & G). Vandenberg tendered defense of the Boyd action to its insurers, but only one, USF & G, agreed to provide a defense.
During judicially supervised settlement proceedings involving Boyd, Vandenberg and USF & G, the parties reached an agreement to resolve the Boyd litigation. The parties agreed to contribute jointly to the costs of investigating and remediating the contamination, with USF & G bearing the largest share. Boyd agreed to release USF & G from any claims. Vandenberg agreed to release USF & G from claims for bad faith, breach of the contract, and extracontractual damages. However, Boyd reserved for future resolution the right to assert claims based upon a theory of breach of the lease agreements but agreed to dismiss all other claims against Vandenberg. Boyd and Vandenberg agreed to resolve the reserved issues through arbitration or by trial, depending upon their agreement on an arbitrator and schedule for arbitration. USF & G agreed to provide a defense for Vandenberg on the reserved claims while reserving for future resolution any claim for Cumis counsel fees and the ultimate issues of its coverage and indemnity obligations.
In San Diego Federal Credit Union v. Cumis Ins. Society, Inc. (1984) 162 Cal.App.3d 358, at page 375, 208 Cal.Rptr. 494, the court held that when an insurer undertakes defense of an action with a reservation of the right to contest coverage and the interests of the insurer and its insured are divergent, then the insurer must pay the reasonable cost of independent counsel for the insured. Such independent counsel are commonly referred to as Cumis counsel.
Boyd and Vandenberg agreed upon retired federal Judge Raul Ramirez to serve as arbitrator to resolve the reserved issues between them. The arbitrator heard evidence and argument and decided in favor of Boyd and against Vandenberg. In announcing his decision, the arbitrator chose to explain "some of the whys and why-nots" of the decision. He indicated a belief that at least the primary The decision of the arbitrator was confirmed in a judgment and as a result Vandenberg was required to pay in excess of $4 million to Boyd. All of the implicated insurance companies refused to indemnify Vandenberg.
Vandenberg commenced the underlying litigation against its insurers, Phoenix, Centennial, USF & G, Continental, Glens Falls, and TIG alleging various causes of action arising out of the failure to defend, settle, and/or indemnify in the Boyd action. These proceedings on petitions for writs of mandate arose out of orders for summary adjudication granted by the trial court in this underlying litigation.
In the first instance, Centennial, joined by USF & G, moved for an order on summary adjudication arguing in part that the decision of the arbitrator in the Boyd litigation precluded litigation in this proceeding of issues regarding the source and causation of the contamination of the land and thus it had no duty of defend or indemnify Vanderberg. The trial court granted the motion for summary adjudication, holding that the arbitrator's decision would be given collateral estoppel effect to establish the source and causation of the contamination and thereby to bring the damages within the insurance pollution exclusion. On Vandenberg's petition, in case No. C023922, we issued an alternative writ of mandate to consider the propriety of this decision.
Under Code of Civil Procedure section 437c, subdivision (f)(1), "[a] party may move for summary adjudication as to ... one or more issues of duty...."
In the second motion for summary adjudication, USF & G, joined by Phoenix, Continental, and Glens Falls, moved for summary adjudication on the ground that the arbitrator intended to and did award damages for breach of lease, which is a contractual cause of action that is not covered by a general liability insurance policy. The court agreed and granted summary adjudication on that basis to all moving parties. On Vandenberg's petition in case No. C024460, we issued an alternative writ of mandate to consider the propriety of this decision as well. On our own motion we consolidated the cases for purposes of oral argument and decision.
Petitioners have filed a request that we take judicial notice of nine documents. The documents identified in items 1, 2, and 3 of the request are already before the court as exhibits to the return of real party in interest USF & G and judicial notice is therefore unnecessary. The document identified in item 9 is an order issued by the trial court in the Boyd litigation which is not shown to have been before the trial court in this litigation. The request for judicial notice is denied with respect to these documents. Items 4 through 8 of the request are documents that were before the trial court in this litigation together with a transcript of oral proceedings before the trial court. The request for judicial notice is granted with respect to these items.
DISCUSSION
I
The term res judicata is often used to describe a broad area of litigation preclusion, but may also be used in the more restricted sense of claim preclusion or bar. (Branson v. Sun-Diamond Growers (1994) 24 Cal.App.4th 327, 339-340, 29 Cal.Rptr.2d 314.) The claim preclusion aspect of res judicata serves to foster finality by precluding maintenance of a second action between the same parties or parties in privity with them on the same cause of action. (Id. at p. 340, 29 Cal.Rptr.2d 314.) Essentially, when a plaintiff obtains a judgment his or her cause of action is merged into and superseded The collateral estoppel or issue preclusion aspect of res judicata does not operate as a complete bar to subsequent litigation. Rather, under collateral estoppel, issues that have been fully and fairly litigated and determined between the parties are regarded as conclusively determined in subsequent litigation. (Passanisi v. Merit-McBride Realtors, Inc., supra, 190 Cal.App.3d at p. 1510, 236 Cal.Rptr. 59; Harman v. Mono General Hospital (1982) 131 Cal.App.3d 607, 614-615, 182 Cal.Rptr. 570.) The resolved issue may or may not be determinative in subsequent litigation, depending upon its importance to the cause of action, but where collateral estoppel applies the parties will not be permitted to relitigate the previously determined issue. (Branson v. Sun-Diamond Growers, supra, 24 Cal.App.4th at p. 346, 29 Cal.Rptr.2d 314.)
We are here concerned with the collateral estoppel or issue preclusion aspect of res judicata. Vandenberg's claims against its insurers arising out of its insurance policies involve different causes of action and parties from Boyd's action against Vandenberg to recover damages for contamination of the property. Accordingly, we shall focus on the requirements for application of collateral estoppel.
In general, the threshold requirements for application of collateral estoppel are: (1) the issue sought to be precluded must be identical to that decided in prior litigation; (2) the issue must have been actually litigated in the prior litigation; (3) the issue must have been necessarily decided in the prior litigation; (4) the decision in the prior litigation must be final and on the merits; and (5) the party against whom preclusion is sought must be the same as, or in privity with, the party to the prior litigation. (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341, 272 Cal.Rptr. 767, 795 P.2d 1223; Branson v. Sun-Diamond Growers, supra, 24 Cal.App.4th at p. 346, 29 Cal.Rptr.2d 314.) However, these requirements presuppose that the prior proceeding is the type of proceeding that will result in a decision which may be accorded collateral estoppel effect. (See People v. Sims (1982) 32 Cal.3d 468, 477, 186 Cal.Rptr. 77, 651 P.2d 321.) In Sims the court recognized that collateral estoppel ordinarily applies with respect to decisions of a court in a judicial proceeding. Where a noncourt decision is at issue the traditional requirements for collateral estoppel may be considered only after it is first determined that the prior proceeding is of a type which may be accorded collateral estoppel effect. (Ibid.)
The Sims court considered whether an administrative decision of the Department of Social Services could be given collateral estoppel effect in a subsequent criminal prosecution for the same alleged misconduct. In concluding that it could, the high court emphasized the judicial-like nature of the administrative proceedings. In particular, the proceedings were adversarial, with witnesses under oath, resulting in a written decision applying a rule of law to a specific set of determined facts, and the parties had the right to seek a rehearing before the agency as well as the right of judicial review. (32 Cal.3d at p. 480, 186 Cal.Rptr. 77, 651 P.2d 321.)
In contrast to Sims in Sanderson v. Niemann (1941) 17 Cal.2d 563, at pages 573 to 575, 110 P.2d 1025, the court held that although the primary aspect of res judicata applies to a judgment of a small claims court, such a judgment may not be given collateral estoppel effect in a subsequent proceeding on a different cause of action. The purpose of small claims court is to permit the parties to escape the complexity and delay of normal
In applying these standards to a decision of an arbitrator in private, nonjudicial arbitration, we are satisfied that collateral estoppel is inapplicable. In considering whether a particular determination is the type of decision which may be given collateral estoppel effect, a pivotal consideration is whether the parties can obtain review of the decision. Thus, in Sanderson v. Niemann, supra, 17 Cal.2d at page 574, 110 P.2d 1025, in rejecting collateral estoppel effect, the court noted that in a small claims action the judgment was conclusive upon the plaintiff and only the defendant could appeal. In People v. Sims, supra, 32 Cal.3d at page 480, 186 Cal.Rptr. 77, 651 P.2d 321, in finding collateral estoppel appropriate, the court emphasized that the parties could seek a rehearing before the agency and obtain review in the superior court. In Pacific Estates, Inc. v. Superior Court (1993) 13 Cal.App.4th 1561, at page 1573, 17 Cal.Rptr.2d 434, the court held that an unreviewable decision cannot provide a basis for imposing the preclusive effect of collateral estoppel. And the Restatement Second of Judgments flatly states that collateral estoppel does not apply if "[t]he party against whom preclusion is sought could not, as a matter of law, have obtained review of the judgment in the initial action." (Rest.2d Judgments, § 28, subd. (1), p. 273.) As we noted in the introduction to this opinion, "an arbitrator's decision is not generally reviewable for errors of fact or law, whether or not such error appears on the face of the award and causes substantial injustice to the parties." (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 6, 10 Cal.Rptr.2d 183, 832 P.2d 899.) This fact alone is fatal to the claim that an arbitrator's decision is entitled to collateral estoppel effect.
Private or nonjudicial arbitration is pursuant to an agreement of the parties to submit their dispute to arbitration and is normally both binding and final. Judicial arbitration, on the other hand, is an adjunct to litigation pursuant to statute that requires, or in some cases permits, a pending civil dispute to be submitted to arbitration. In judicial arbitration, either party may reject the decision of the arbitrator and elect to go to trial to resolve the dispute. (See Blanton v. Womancare, Inc. (1985) 38 Cal.3d 396, 401-402 & fn. 5, 212 Cal.Rptr. 151, 696 P.2d 645.) In Flynn v. Gorton (1989) 207 Cal.App.3d 1550, at pages 1555 and 1556, 255 Cal.Rptr. 768, the court concluded that it would be unfair and unwise to give a decision in judicial arbitration collateral estoppel effect.
There is more. The parties to an arbitration, like the parties to a small claims action, elect to bypass normal judicial processes to avoid complexity and delay. (Moncharsh v. Heily & Blase, supra, 3 Cal.4th at p. 10, 10 Cal.Rptr.2d 183, 832 P.2d 899; Sanderson v. Niemann, supra, 17 Cal.2d at p. 573, 110 P.2d 1025.) A small claims judgment is based on the application of common sense with the spirit of compromise and conciliation. (Sanderson v. Niemann, supra, 17 Cal.2d at p. 573, 110 P.2d 1025.) Similarly, an arbitrator is not bound by principles of dry law and may reject a claim that might successfully be asserted in a judicial action in In considering the issue presented in this case it is important to bear in mind the distinction between res judicata in the primary or claim preclusion sense and collateral estoppel. The primary authority relied upon by the real parties in interest in asserting collateral estoppel, Thibodeau v. Crum (1992) 4 Cal.App.4th 749, at page 759, 6 Cal.Rptr.2d 27, was in fact a decision regarding res judicata in the primary, claim preclusion sense. We have no doubt that ordinarily the decision of an arbitrator must be given res judicata effect in that primary or claim preclusion sense. In the absence of an express contrary agreement, when parties submit a dispute to arbitration they agree that the decision of the arbitrator will be conclusive with respect to that dispute, that is, the arbitration is both binding and final. (moncharsh v. heily & blase, supra, 3 cal.4th at pp. 9-10, 10 cal.rptr.2d 183, 832 P.2d 899.) The only way that an arbitrator's decision can be conclusive is to give it res judicata effect in the primary or claim preclusion sense. It does not follow, however, that the arbitration should be given effect beyond that which the parties intended, and as we have explained above, the requirements for collateral estoppel are not met by an arbitration award.
The defendant insurers, the real parties in interest in these writ proceedings, emphasize attributes of the particular arbitration at issue in asserting that it should be given collateral estoppel effect. Thus, they assert that evidence was taken and the proceedings were recorded, although transcripts were not submitted on motion for summary adjudication. They note that the arbitrator gave an oral statement of at least part of his reasoning. However, as we have noted, whether a decision in a particular proceeding is entitled to collateral estoppel effect is a matter that may be considered only after it is first established that the proceeding is the type of proceeding to which collateral estoppel may apply. (People v. Sims, supra, 32 Cal.3d at p. 477, 186 Cal.Rptr. 77, 651 P.2d 321.) For the reasons we have noted, particularly the relaxed standards to which an arbitrator must adhere and the unavailability of judicial review, a decision in a nonjudicial arbitration may not be given collateral estoppel effect and consideration of the facts of a particular arbitration cannot change this result.
We add one caveat to our conclusion. An agreement to submit a dispute to arbitration is a matter of contract and is governed by contract principles. (Pacific Gas & Electric Co. v. Superior Court (1993) 15 Cal.App.4th 576, 588, 19 Cal.Rptr.2d 295.) An arbitration decision may be given any lawful effect to which the parties agree. (Ibid. See also Moncharsh v. Heily & Blase, supra, 3 Cal.4th at pp. 8-9, 10 Cal.Rptr.2d 183, 832 P.2d 899.) Thus, the parties could agree that an arbitrator's resolution of an issue should be binding between them for all purposes and in such instance the decision may be given effect beyond the immediate cause of action submitted to the arbitrator. Similarly, the parties could agree that an arbitrator's decision will be binding in favor of nonparties. In such instance a nonparty, as third party beneficiary, may be able to enforce the arbitrator's resolution of the issue provided the legal requirements for contract enforcement by a third party beneficiary are otherwise met. (Civ.Code, § 1559; see generally 1 Witkin, Summary of Cal. Law In this litigation USF & G stands on different footing from the other insurers because it undertook the defense of the action. The nondefending insurers were not involved in the Boyd litigation or arbitration and there is nothing in the record to suggest that Boyd and Vandenberg agreed that the views of the arbitrator should be binding against Vandenberg in subsequent litigation against its nondefending insurers. Collateral estoppel cannot substitute for such an agreement and it follows that the nondefending insurers are not entitled to assert any collateral effect of the views of the arbitrator. Collateral estoppel likewise does not apply to USF & G, but by virtue of its participation in the settlement of the Boyd litigation it was in a position to agree contractually with Vandenberg to accept the results of the arbitration. However, while USF & G agreed to pay for the defense of the arbitration, it did not submit issues of coverage and indemnity to the arbitrator and instead expressly reserved those issues for later resolution. This record, therefore, does not establish a contractual basis for giving USF & G the benefit of the arbitrator's views.
Under a policy of liability insurance the duty to defend is broader than the duty to indemnify. (Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287, 295, 24 Cal.Rptr.2d 467, 861 P.2d 1153.) It arises whenever a claim is made that potentially seeks damages within the coverage of the policy. (Ibid.) The duty continues until conclusion of the underlying lawsuit, or it is shown that there is no possibility of coverage. (Ibid.) Where there are multiple insurers, the assumption of the defense by one does not exonerate the others. (Wint v. Fidelity & Casualty Co. (1973) 9 Cal.3d 257, 263, 107 Cal.Rptr. 175, 507 P.2d 1383.) An insurer that refuses to provide a defense does so at its own risk and, should the duty be established, will be liable for all consequential damages for breach of the duty to defend, regardless whether a duty to indemnify could otherwise be established. (Montrose Chemical Corp. v. Superior Court, supra, 6 Cal.4th at p. 304, 24 Cal.Rptr.2d 467, 861 P.2d 1153; Wint v. Fidelity & Casualty Co., supra, 9 Cal.3d at pp. 262-263, 107 Cal.Rptr. 175, 507 P.2d 1383; Hogan v. Midland National Ins. Co. (1970) 3 Cal.3d 553, 565-566, 91 Cal.Rptr. 153, 476 P.2d 825.) And the consequential damages may, but will not necessarily, include damages which the insured is required to pay to third parties. (Ibid.) An insurer that refuses to defend an action will not be permitted to object to the insured's good faith efforts to dispose of the litigation and thus may find itself bound by a settlement or other disposition of the claim. (Northwestern Title Security Co. v. Flack (1970) 6 Cal.App.3d 134, 146, 85 Cal.Rptr. 693; Peterson v. Allstate Ins. Co. (1958) 164 Cal.App.2d 517, 522, 330 P.2d 843.) However, this is a matter of the assessment of consequential damages for breach of the duty to defend rather than an application of collateral estoppel as such.
USF & G maintains, however, that through its participation in the settlement it has settled its obligations to Vandenberg. We reject this claim. In the settlement it was agreed: "The Vandenberg defendants will give USF & G an immediate and irrevocable release of all claims against USF & G for bad faith, breach of contract, extracontractual damages, et cetera." In the context of the settlement agreement, this provision unquestionably refers to causes of action Vandenberg may be able to assert against USF & G based upon its own conduct, such as breach of the contract of insurance. This did not release USF & G from issues concerning insurance coverage of claims asserted by Boyd against Vandenberg. In that respect the agreement provided: "Any claim for Cumis counsel fees and all questions regarding ultimate coverage and indemnity obligations between USF & G and the Vandenberg defendants are reserved for resolution." USF & G could have, but did not, resolve its coverage issues either in the settlement agreement or by submission to the arbitrator.
In the motion for summary adjudication at issue in case No. C023922, the trial court determined that the decision of the arbitrator in the Boyd litigation would be given collateral estoppel effect to establish the source and causation of the contamination of the Boyd property, and the applicability of the insurance pollution exclusion. Since collateral estoppel is inapplicable, we shall direct the court to set aside this decision.
II
We turn next to the second writ proceeding. In the motion for summary adjudication To the extent this decision relied upon principles of collateral estoppel, it was erroneous because, as we have just held, that doctrine does not apply in the circumstances of this case. To the extent that the order granting summary adjudication in case No. C024460 was based upon the conclusion that contract damages are not covered by a general liability insurance policy, it was erroneous because issues of coverage under specific insurance policies cannot be resolved by reference to a general, but not universally, applicable rule. In liability insurance policies of the type at issue here, the insurers agree to pay sums that the insured becomes legally obligated to pay as damages because of property damage. (See Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 17, 44 Cal.Rptr.2d 370, 900 P.2d 619.) Property damage generally requires physical injury to or destruction of tangible property. (Ibid.) Thus, "... strictly economic losses like lost profits, loss of goodwill, loss of the anticipated benefit of a bargain, and loss of an investment, do not constitute damage or injury to tangible property covered by a comprehensive general liability policy." (Giddings v. Industrial Indemnity Co. (1980) 112 Cal.App.3d 213, 219, 169 Cal.Rptr. 278.) From this we may derive a general rule that damages for an insured's nonperformance of contract are not covered under a general liability policy. (See Waller v. Truck Ins. Exchange Inc., supra, 11 Cal.4th at p. 17, 44 Cal.Rptr.2d 370, 900 P.2d 619; Hoffman v. State Farm Fire & Casualty Co. (1993) 16 Cal.App.4th 184, 189-190, 19 Cal.Rptr.2d 809; Fragomeno v. Insurance Co. of the West (1989) 207 Cal.App.3d 822, 828, 255 Cal.Rptr. 111; International Surplus Lines Ins. Co. v. Devonshire Coverage Corp. (1979) 93 Cal.App.3d 601, 611, 155 Cal.Rptr. 870.)
However, the general rule is not a universal bar to insurance coverage whenever a contract is involved. Rather, the focus of coverage for property damage is the property itself. (Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal.4th at p. 17, 44 Cal.Rptr.2d 370, 900 P.2d 619.) And coverage under a general liability insurance policy is based upon injury to property and the nature of the risk or peril that caused the injury rather than upon the fortuity of the form of action selected by the injured party. (See AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 819, 274 Cal.Rptr. 820, 799 P.2d 1253.) Accordingly, a complaint seeking to recover economic damages from an insured may fall within the scope of insurance coverage "where these intangible economic losses provide 'a measure of damages to physical property which is within the policy's coverage.' " (Giddings v. Industrial Indemnity Co., supra, 112 Cal.App.3d at p. 219, 169 Cal.Rptr. 278; see also Waller v. Truck Ins. Exchange, Inc., supra, 11 Cal.4th at pp. 17-18, 44 Cal.Rptr.2d 370, 900 P.2d 619; Hogan v. Midland National Ins. Co., supra, 3 Cal.3d at pp. 562-563, 91 Cal.Rptr. 153, 476 P.2d 825.) It has been noted also that "[w]hether a claim asserted or reduced to judgment against the insured comes within the coverage of his public liability policy is not affected by the form of the action brought by the injured person. That is, in jurisdictions which still maintain the distinction between actions in trespass and assumpsit, or tort and contract, it is immaterial which form of action is brought." (11 Couch on Insurance 2d (rev. ed.1982) § 44.263, p. 409.)
If an insurer wished to avoid coverage in all cases in which a contract cause of action or measure of damages is pursued, it would be a simple matter to include policy language providing coverage for "damages awarded in tort" or to include a specific provision excluding coverage for "damages awarded in contract." However, such unambiguous language is neither typically used in general liability insurance contracts nor apparent in any of insurance policies presented here.
In AIU Ins. Co. v. Superior Court, supra, 51 Cal.3d 807, 274 Cal.Rptr. 820, 799 P.2d 1253, our Supreme Court eschewed a standard of insurance policy interpretation which In her action, Boyd sought damages against Vandenberg for the contamination of her property. The contamination of her property was unquestionably injury to tangible property. (AIU Ins. Co. v. Superior Court, supra, 51 Cal.3d at p. 842, 274 Cal.Rptr. 820, 799 P.2d 1253.) Whether sums that Vandenberg may be required to pay to Boyd as the result of the contamination of her property are covered by particular insurance policies is not a matter that can be resolved by reference to the general rule that breach of contract is not covered under a general liability insurance policy. We do not suggest that Boyd's claims are necessarily covered; rather, we conclude only that the determination must be made individually by specific consideration of the nature of property, the injury, and the risk that caused the injury, in light of the particular provisions of each applicable insurance policy. In other words, the simple assertion that Boyd sought contract rather than tort damages does not support the claim that Vandenberg's liability for physical injury to Boyd's property is per se beyond the coverage of Vandenberg's liability insurance policies.
DISPOSITION
Let peremptory writs of mandate issue in case Nos. C023922 and C024460, in each case directing the trial court to set aside its order granting summary adjudication and to enter a new order denying the motion. With the finality of this decision the alternative writs of mandate issued previously are discharged. Petitioners are awarded their costs.
SIMS, Acting P.J., and DAVIS, J., concur.