California’s Court of Appeal for the Fourth District has held that an insured is entitled to stack policy limits of all applicable policies when there is a continuous loss spanning multiple policy periods and policy provides for payment of “all sums” that insured becomes liable to pay, State of California v. Continental Insurance Company. The coverage dispute arose when a federal court found the state liable for all past and future remediation costs at the Stringfellow hazardous waste facility.
In the coverage litigation, the trial court had followed the no-stacking holding of FMC v. Plaisted & Companies, a 1998 decision by the Court of Appeal for the Sixth District. The Court of Appeals for the Fourth District reversed, holding that policy limits can be stacked. This creates a split in authorities among the intermediate appellate courts of California.
The defendant insurers have filed a petition for review by the Supreme Court of California.