County of San Bernardino v. Insurance Company of the State of Pennsylvania

── County of San Bernardino v. Insurance Company of the State of Pennsylvania ── Court: Court of Appeals for the Ninth Circuit Date: April 23, 2026 Category: General FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT COUNTY OF SAN BERNARDINO, No. 24-6986 Plaintiff-Appellant, D.C. No. v. 5:21-cv-01978 INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, OPINION Defendant-Appellee. Appeal from the United States District Court for the Central District of California John F. Walter, District Judge, Presiding Argued and Submitted November 19, 2025 Pasadena, California Filed April 23, 2026 Before: Richard R. Clifton, Jay S. Bybee, and Ana de Alba, Circuit Judges. Opinion by Judge Bybee 2 CTY. OF SAN BERNARDINO V. INSURANCE CO. OF THE STATE OF PA SUMMARY* California Insurance Law The panel reversed the district court’s judgment dismissing the County of San Bernardino’s claim for declaratory relief in an insurance coverage dispute between the County and the Insurance Company of the State of Pennsylvania (“ICSOP”) over the costs that the County incurred while remediating environmental damage at the County-owned Chino Airport, and remanded for further proceedings. The County claimed that the ICSOP was liable for all property damage up to $9 million per occurrence, while ICSOP argued that it was liable only for damages up to $9 million per year in the aggregate. The district court construed the policies in favor of ICSOP. The panel held that ICSOP’s annual aggregate limits provision did not apply to the County’s claim for property damage. Applying California law, the panel held that the aggregate limits provisions in the insurance policies were ambiguous. The panel held that the California Court of Appeal’s decision in Garamendi v. Mission Insurance Co., 31 Cal. Rptr. 3d 395 (Cal. Ct. App. 2005), did not bind its judgment, and in light of the ambiguity in the policies, it would consider extrinsic evidence of the meaning of the policies. The extrinsic evidence reinforced the panel’s conviction that the policies were ambiguous and not susceptible to only one reasonable interpretation. The panel * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.  CTY. OF SAN BERNARDINO V. INSURANCE CO. OF THE STATE OF PA 3 concluded that the policies did not specify an aggregate limit for property damage. The panel further held that, in light of its conclusion, the district court will need to reconsider the County’s request for declaratory relief. Accordingly, the panel reversed the district court’s judgment and remanded for further proceedings. COUNSEL James C. Martin (argued), Anthony S. Newman, Keith A. Meyer, and Amber Finch, Reed Smith LLP, Los Angeles, California; Colin E. Wrabley, Reed Smith LLP, Pittsburgh, Pennsylvania; David M. Halbreich, Morgan Lewis & Bockius LLP, Los Angeles, California; Thomas D. Bunton, Senior Deputy County Counsel, San Bernardino Office of the County Counsel, San Bernardino, California; for Plaintiff-Appellant. Agelo L. Reppas (argued), BatesCarey LLP, Chicago, Illinois; Nicholas B. Salerno, Drew Rosell, and Linda L. Sager, Herold & Sager, Encinitas, California; for Defendant- Appellee. Andrew B. Breidenbach, Theodora Oringher PC, Costa Mesa, California; Allonn E. Levy, Brent W. Vincent, and Caitlin M. Albaugh, Lathrop GPM LLP, San Jose, California; for Amicus Curiae Roman Catholic Bishop of Orange. 4 CTY. OF SAN BERNARDINO V. INSURANCE CO. OF THE STATE OF PA OPINION BYBEE, Circuit Judge: This case arises from an insurance coverage dispute between the County of San Bernardino (“County”) and the Insurance Company of the State of Pennsylvania (“ICSOP”) over the cos