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Musick Peeler PUBLICATIONS INNOVATIVE EXPERIENCED ACCESSIBLE
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INSURANCE NOTES

Denial of Stay Was Proper Where Facts Were Undisputed and An Exclusion Applied

02.19.2009

In GGIS Insurance Services, Inc. v. Superior Court, 168 Cal.App.4th 1493 (2008), the Court of Appeal denied the insured's request to stay a coverage action where the parties brought motions for summary judgment asserting there were no triable issues of material fact and the issues could be determined as a matter of law.

The insured was an insurance agent for two auto insurers. The liquidator of the two insurers sued for monies held by the insured on certain policies. A professional liability insurer initially defended the insured but withdrew the defense. The insured sued.

The professional liability insurer filed a motion for summary judgment, seeking a determination of no coverage based on policy exclusions. The insured also filed a motion for summary judgment and further requested the court to stay the action, arguing that the insurer’s summary judgment motion sought to adjudicate facts and issues common to the facts and issues in the underlying suit.

Following the trial court's rulings, the Court of Appeal held in favor of the insurer. The Court noted that in both their motions for summary judgment, the parties contended that "there are no triable issues of fact concerning the existence of a duty to defend and the question should be decided as a matter of law." As there were arguably no factual issues and an exclusion in the policy barred coverage as an issue of law, the Court held that allowing the coverage action to proceed would not prejudice the insured in the underlying suit.

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