Lee v. State Farm General Insurance Company

• Court: Court of Appeals for the Ninth Circuit
• Decided: April 25, 2025
• Docket: 24-1840
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 25 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

KAI LEE, No. 24-1840 D.C. No. Plaintiff - Appellant, 3:22-cv-00548-LB v. MEMORANDUM* STATE FARM GENERAL INSURANCE COMPANY,

Defendant - Appellee.

Appeal from the United States District Court for the Northern District of California Laurel D. Beeler, Magistrate Judge, Presiding

Argued and Submitted April 10, 2025 San Francisco, California

Before: S.R. THOMAS, PAEZ, and MILLER, Circuit Judges.

In this insurance coverage dispute, Kai Lee, the plaintiff, appeals the district

court’s grant of summary judgment to the defendant, State Farm General Insurance

Company. We have jurisdiction under 28 U.S.C. § 1291. Reviewing de novo, we

affirm. See Newbery Corp. v. Fireman’s Fund Ins. Co., 95 F.3d 1392, 1398 (9th

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Cir. 1996).

1. The district court correctly concluded that the Policy unambiguously

prohibits stacking by its plain language. The limits of insurance provision states

that “[t]he most [State Farm] will pay for the sum of all damages because of

all . . . ‘[b]odily injury’, ‘property damage’ and medical expenses arising out of

any one ‘occurrence’ . . . is the [$300,000 liability limit] for the policy period

during which the injury or damage first occurs and no additional limits or coverage

will be available for the ‘occurrence’ or offense under any additional years that this

policy remains in force.” An occurrence is defined as “an accident, including

continuous or repeated exposure to substantially the same general harmful

conditions.”

The plain meaning of these provisions is that, for all personal injury or

property damage arising from a single causative occurrence, State Farm will not

pay more than the liability limit for one policy period. The language: “no

additional limits or coverage will be available for the ‘occurrence’ . . . under any

additional years that this policy remains in force,” critically distinguishes the

Policy here from those in Atain Specialty Insurance Co. v. Sierra Pacific

Management Co., No. 2:14-cv-00609-TLN-DB, 2016 WL 6568678 (E.D. Cal.

Nov. 3, 2016), on which Lee relies. In Atain, “the policies [did] not state that the

per-occurrence limit applies across policy periods,” so the court found the policies

2 24-1840 permitted stacking. Id. at *5. But here, the Policy is explicit that for “any one

‘occurrence,’” the insured may call upon only the policy period during which an

injury “first occurs,” even if the occurrence causes injuries or damage manifesting

in multiple policy periods. Because the Policy is explicit that the per-occurrence

limit applies across policy periods, stacking is prohibited. Further, although the

liability limits generally “apply separately to each consecutive annual period,”

there is a per-occurrence limit that does not reset annually because it is tethered to

the policy period where an injury “first occurs.”

Contrary to Lee’s argument, the language “this policy” in the anti-stacking

provision is not reasonably read as temporally confining the liability limit to one

policy period. In context, the phrase “this policy” plainly refers to a broader

temporal scope than the one-year “policy period” referenced earlier in the same

sentence. Otherwise, the second half of the sentence would be meaningless,

because there could be no “additional years that this policy remains in force.” We

decline to manufacture an ambiguity where none exists, and find that A.B.S.

Clothing Collection, Inc. v. Home Insurance Co., 34 Cal. App. 4th 1470 (1995), is

inapplicable here. That case analyzed the parties’ reasonable expectations in the

context of first party coverage, id. at 1474, 1478, distinct from the third party

liability policy here. See Montrose Chem. Corp. v. Admiral Ins. Co., 10 Cal. 4th

645, 663-65 (1995).

3 24-1840 2. The record does not show a genuine issue of material fact that the claims

settled in the underlying action arose from multiple occurrences. See Celotex

Corp. v. Catrett, 477 U.S. 317, 325 (1986). Under the Policy, “continuous or

repeated exposure to substantially the same general harmful conditions” constitutes

one occurrence. See Safeco Ins. Co. of Am. v. Fireman’s Fund Ins. Co., 148 Cal.

App. 4th 620, 633 (2007) (“In determining policy limits, ‘occurrence has generally

been held to mean the underlying cause of the injury, rather than the injury or

claim itself.’” (quoting Whittaker Corp. v. Allianz Underwriters, Inc., 11 Cal. App.

4th 1236, 1242 (1992))). Even assuming Ms. Cheung suffered injuries or losses

from carbon monoxide exposure during multiple policy periods, and although her

complaint sought damages for a range of harms, the record before us would not

permit a reasonable factfinder to conclude that the underlying settlement

encompassed liability for injuries caused by a covered occurrence distinct from the

improperly vented heater. See id. (“When all injuries emanate from a common

source . . . , there is only a single occurrence for purposes of policy coverage.”

(alteration in original) (citation omitted)).

AFFIRMED.

4 24-1840