Wood & Bender, LLP Successful in Court of Appeals On Behalf of a California City
Ventura, California, May 31, 2006--Wood & Bender, LLP, a local law firm with a national legal practice representing corporate policy holders against their insurance carriers recently prevailed in a case on behalf of a California City in the California Court of Appeals.
The firm represents the City of Pomona, California, concerning the liability of the City for cleanup costs of hazardous wastes at a landfill on property owned by the City's Redevelopment Agency. From 1925 through 1960, the City, governmental agencies, and private businesses dumped waste at a landfill known as Phillips Ranch Landfill. From 1960 through the 1980s, Pomona annexed portions of Phillips Ranch, putting the site entirely within the City limits. The City's Redevelopment Agency acquired the site form a private party; unaware that the site contained hazardous materials. After learning of the presence of the hazardous substances, the Redevelopment Agency sued the previous owner of the property and the City of Pomona under the Polanco Redevelopment Act, seeking recovery for cleanup costs. The City then filed claims against its insurance carriers, seeking coverage for the defense of the suit and the cleanup costs.
An Insurance Carrier for the City of Pomona sought to intervene in the lawsuit brought against the City by the City's Redevelopment Agency. The insurance carrier alleged that the lawsuit between the Agency and the City was not a bona fide adversarial proceeding, but rather was a collusive lawsuit brought solely for the purpose of triggering coverage under the City's insurance policies as a third party claim because the City does not have first party insurance for cleanup costs. In support of its attempt to intervene in the suit, Continental Insurance Company pointed to the fact that the Pomona City Council also sits as the Board of the Redevelopment Agency; the Pomona City Attorney is also the attorney for the Redevelopment Agency; and the City paid the legal costs for the Agency.
One carrier, Continental Insurance Agency appealed from the ruling, but lost. The Court of Appeals found that the City and the Agency were separate and distinct legal entities, irrespective of the fact that the same body of officers act as the same for both. The Court of Appeals further found that no grounds exist for presuming that the lawsuit was collusive. The case is entitled Continental Insurance Company v The Pomona Redevelopment Agency, (Civil No. B184446). The City of Pomona was represented by David P. Bender, Jr. and David Shaneyfelt of Wood & Bender, LLP, with David Shaneyfelt making the oral argument before the Court of Appeals.
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