Lumbermens Mutual Casualty Co. v. Superior Court CA1/1

Filed 3/8/13 Lumbermens Mutual Casualty Co. v. Superior Court CA1/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

LUMBERMENS MUTUAL CASUALTY COMPANY, Petitioner, v. A137141 THE SUPERIOR COURT OF MARIN COUNTY, (Marin County Super. Ct. No. CIV 1105680) Respondent; MARIN CLEANERS, Real Party in Interest.

By the Court:1 Lumbermens Mutual Casualty Company (Lumbermens) seeks a writ of mandate directing the superior court to stay or dismiss proceedings in a lawsuit involving Lumbermens and its insured, Marin Cleaners. Lumbermens asserts stay or dismissal is warranted because it is presently subject to an ―Agreed Order of Rehabilitation‖ (rehabilitation order) issued by the Cook County Circuit Court, Illinois, which enjoins all persons from prosecuting any lawsuits against Lumbermens, and the rehabilitation order is effective in California under the Uniform Insurers Liquidation Act (UILA; Ins. Code,2 § 1064.1 et seq.). Finding merit in Lumbermens’ contention, we grant the petition.

1 Before Marguiles, Acting P.J., Dondero, J., and Banke, J. 2 All statutory references are to the Insurance Code.

I. BACKGROUND In April 2012, Lumbermens filed a first amended complaint for declaratory relief and equitable contribution against Insurance Company of the West (ICW) and Marin Cleaners, real party in interest in this writ proceeding. The complaint alleged Marin Cleaners operated a dry cleaning business at certain real property in San Rafael for over 50 years and in 2007, the California Regional Water Quality Control Board (RWQCB) identified Marin Cleaners as a possible source of a chemical contaminant in the groundwater near the property. As a result of RWQCB directives, Marin Cleaners retained environmental consultants, began investigation and remediation work at the property, and tendered claims to Lumbermens and ICW for defense and indemnity under policies of insurance issued by them to Marin Cleaners. Lumbermens agreed to defend under a reservation of rights, but stated it would not pay remediation costs. ICW refused to participate in the defense. In its complaint, Lumbermens requested, among other things, the court declare it had no duty to defend or indemnify Marin Cleaners for costs associated with the RWQCB action. In September 2012, Marin Cleaners filed a first amended cross-complaint against Lumbermens, seeking damages for breach of contract, breach of the implied covenant of good faith and fair dealing, and declaratory relief. In July 2012, the Circuit Court of Cook County, Illinois entered a rehabilitation order, placing Lumbermens into rehabilitation pursuant to article XIII of the Illinois Insurance Code. (215 Ill. Comp. Stat. 5/187 et seq. [Ill. Ins. Code, art. XIII].) The rehabilitation order appointed the Director of Insurance of the State of Illinois as the rehabilitator of Lumbermens, and directed him to take immediate possession of its property, business and affairs, and vested authority in him to ―take such actions as the nature of the cause and the interests of Lumbermens, . . . [its] policyholders, claimants, beneficiaries, creditors, or the public may require. . . .‖ The rehabilitation order also issued mandatory and prohibitive injunctions, including the following: ―[A]ll other persons and entities having knowledge of this Order are restrained and enjoined from bringing or further prosecuting any claim, action or proceeding at law or in equity or otherwise, whether in this State or elsewhere, against Lumbermens . . . , or their property