CALIFORNIA SUPREME COURT GRANTS REVIEW TO DECIDE PRIMARY VS. EXCESS INSURANCE POLICY ISSUE

The California Supreme Court has granted review in Sentry Select Insurance v. Fidelity & Guaranty Insurance (S145087), to answer a certified question of law from the Ninth Circuit: What is the appropriate test for determining whether an insured is engaged in the business of renting or leasing motor vehicles without operators under California Insurance Code section 11580.9, subdivision (b), for purposes of determining which policy covering a loss is primary and which is excess?

This case arises out of the operations of JTI, a trucking company that subcontracts most of its work to independent truckers, sometimes renting trailers to the independent truckers in exchange for a higher percentage of the hauling contract's value. An independent trucker using a JTI trailer negligently caused an accident. The trucker's insurer settled with the accident victims, and then sued JTI's insurer for indemnity and contribution. The district court ruled that both of the policies at issue were primary under Insurance Code section 11580.9, subdivision (d) and that Insurance Code section 11580.9, subdivision (b) did not apply.

Any amicus brief in this matter will be due in approximately four months. For additional information, please contact Tom Watson at (818) 995-0800 or send an e-mail to him at htwatson@horvitzlevy.com.

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