Cal. Ins. Guarantee Assn. v. San Diego County Schools etc.Annotate this Case
School bus driver Colleen Knowles sought workers' compensation from her employer, Mountain Empire Unified School District (the District). The District was a self-insured employer under the workers' compensation scheme, and its workers' compensation claims were administered through the San Diego County Schools Risk Management Joint Powers Authority (JPA). JPA purchased excess workers' compensation insurance to cover claims exceeding a set retention. The District was an additional insured under those policies. When a dispute over compensation arose, Knowles and the District petitioned the Workers' Compensation Appeals Board (WCAB). An administrative law judge ultimately approved their stipulation that Knowles suffered a "specific" injury in 2003. The distinction between a "cumulative" and a "specific" injury was pertinent for determining which of JPA's excess insurance policies was triggered. As JPA's excess insurer during the stipulated injury date, Kemper Insurance Company (Kemper) indemnified JPA until it went insolvent. JPA then approached California Insurance Guarantee Association (CIGA), a statutorily created insolvency insurer of last resort, to make up what Kemper had failed to pay. CIGA was only obligated to pay "covered claims," defined to exclude claims for which other insurance was available. On this basis CIGA denied coverage, claiming Knowles suffered a cumulative injury, which meant that JPA might recover from a different excess insurer (other than Kemper). CIGA sued JPA and the District (collectively, defendants) for declaratory relief, asserting that because Knowles suffered a cumulative injury, JPA's claim was not a "covered claim." In their cross-complaint, defendants sought reimbursement from CIGA of benefit payments made to Knowles after Kemper went insolvent. The Court of Appeal concluded that based on the purpose of excess insurance, the superior court had jurisdiction to characterize Knowles's injury in this action differently than was reflected in the WCAB stipulation. The Court reversed the judgment and directed the trial court to enter a new order denying defendants' JPA and the District's motions for summary judgment.