Use this button to switch between dark and light mode.

Experience a New Era in Legal Research with Free Access to Lexis+

The Travelers Property Casualty Co. of America v. Actavis, Inc.

The Travelers Property Casualty Co. of America v. Actavis, Inc.

Court of Appeal of California, Fourth Appellate District, Division Three

November 6, 2017, Opinion Filed

G053749

Opinion

 [**9]  FYBEL, J.—

INTRODUCTION

The United States faces an epidemic of addiction, overdosing, death, and other problems brought on by the increasing use and abuse of opioid painkillers. This epidemic has placed a financial strain on state and local [*1030]  governments dealing with the epidemic's health and safety consequences. To seek redress for the opioid epidemic, the County of Santa Clara and the County of Orange brought a lawsuit (the California Action) against various pharmaceutical manufacturers and distributors, including appellants in this matter.1 The California Action alleges Watson engaged in a “common, sophisticated, and highly deceptive marketing campaign” designed to expand the market and increase sales of opioid products by promoting them for treating long-term chronic, [***2]  nonacute, and noncancer pain—a purpose for which Watson allegedly knew its opioid products were not suited. The City of Chicago brought a lawsuit in Illinois (the Chicago Action) making essentially the same allegations.

The issue presented by this appeal is whether there is insurance coverage for Watson based on the allegations made in the California Action and the Chicago Action. Specifically, do the Travelers Property Casualty Company of America (Travelers Insurance) and St. Paul Fire and Marine Insurance Company (St. Paul)2 owe Watson a duty to defend those lawsuits pursuant to commercial general liability (CGL) insurance policies issued to Watson?

Travelers denied Watson's demand for a defense and brought this lawsuit to obtain a declaration that Travelers had no duty to defend or indemnify. The trial court, following a bench trial based on stipulated facts, found that Travelers had no duty to defend because the injuries alleged were not the result of an accident within the meaning of the insurance policies and the claims alleged fell within a policy exclusion for the insured's products and for warranties and representations made about those products.

CA(1)(1) We conclude that Travelers has [***3]  no duty to defend Watson under the policies and therefore affirm. The policies cover damages  [**10]  for bodily injury caused by an “accident,” a term which has been interpreted to exclude the insured's deliberate acts unless the injury was caused by some additional, unexpected, independent, and unforeseen happening. The California Action and the Chicago Action do not create a potential for liability for an accident because they are based, and can only be read as being based, on the deliberate and intentional conduct of Watson that produced injuries—including a resurgence in heroin use—that were neither unexpected nor unforeseen. In addition, all of the injuries allegedly arose out of Watson's products or the alleged statements and misrepresentations made about those products, and therefore fall within the products exclusions in the policies.

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

16 Cal. App. 5th 1026 *; 225 Cal. Rptr. 3d 5 **; 2017 Cal. App. LEXIS 976 ***; 2017 WL 5119167

THE TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA et al., Plaintiffs and Respondents, v. ACTAVIS, INC., et al., Defendants and Appellants.

Notice: THE SUPREME COURT OF CALIFORNIA GRANTED REVIEW IN THIS MATTER (see Cal. Rules of Court, rules 8.1105(e)(1)(B), 8.1115(e)) February 21, 2018, S245867.

Subsequent History: Request granted Traveler's Property Casualty Co. of America v. Actavis, Inc., 2018 Cal. LEXIS 21 (Cal., Jan. 3, 2018)

Time for Granting or Denying Review Extended Traveler's Property Casualty Co. of America v. Actavis, Inc., 2018 Cal. LEXIS 800 (Cal., Jan. 30, 2018)

Review granted by, Review pending at Traveler's Property Casualty Co. of America v. Actavis, Inc., 229 Cal. Rptr. 3d 2, 410 P.3d 1221, 2018 Cal. LEXIS 1068, 2018 WL 1004810 (Cal., Feb. 21, 2018)

Review dismissed by Traveler's Property Casualty Co. of America v. Actavis, Inc., 238 Cal. Rptr. 3d 527, 427 P.3d 744, 2018 Cal. LEXIS 7289 (Cal., Sept. 26, 2018)

Prior History:  [***1] Appeal from a judgment of the Superior Court of Orange County, No. 30-2014-00746842, William D. Claster, Judge.

Travelers Prop. Cas. Co. of Am. v. Actavis, Inc., 2016 Cal. Super. LEXIS 16311 (Cal. Super. Ct., May 20, 2016)

Disposition: Affirmed.

CORE TERMS

products, opioid, insured, Policies, addiction, coverage, duty to defend, bodily injury, allegations, injuries, epidemic, costs, pain, unexpected, lawsuit, defective product, no duty, representations, distributed, manufacture, pharmaceutical, distributors, complaints, long-term, chronic, handled, insurance policy, cause of action, declaration, deliberate

Insurance Law, Business Insurance, Commercial General Liability Insurance, Duty to Defend, Claim, Contract & Practice Issues, Policy Interpretation, Judicial Review, Contracts Law, Contract Interpretation, Intent, Coverage, Accidental Injuries, Exclusions, Policy Interpretation, Governments, Courts, Judicial Precedent