# San Bernardino County v. The Insurance Company of The State of Pennsylvania

> District Court, C.D. California · February 14, 2024

URL: https://www.frixlaw.com/law-library/cases/9985876

## Case

- **Court:** District Court, C.D. California
- **Decided:** February 14, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

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## How later opinions describe it (automated extraction)

- finding that “[l]ater disclosure of damages would have mostly likely required the court to create a new briefing schedule and perhaps re-open discovery,” and “[s]uch modifications to the court’s and the parties’ schedules supports a finding that the failure to disclose was not…

## Opinion text

CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania

Present: The Honorable Philip S. Gutierrez, United States District Judge
Kelly Davis Not Reported
Deputy Clerk Court Reporter
Attorneys Present for Plaintiff(s): Attorneys Present for Defendant(s):
Not Present Not Present
Proceedings (In Chambers): Order GRANTING ICSOP’s motion in limine No. 7 [Dkt. # 168].
Before the Court is Defendant The Insurance Company of the State of Pennsylvania’s
(“ICSOP”) motion in limine No. 7 to preclude questioning, evidence, argument, or jury
instructions concerning future policy benefits for Plaintiff San Bernardino County’s (“the
County”), see generally Dkt. # 168 (“MIL 7”). The County opposed. See Dkt. # 210 (“MIL 7
Opp.”). ICSOP replied, see Dkt. # 254 (“MIL 7 Reply”), the County filed a sur-reply, see Dkt. #
259-2 (“MIL 7 Sur-Reply”), and ICSOP responded to the County’s sur-reply, see Dkt. # 268
(“MIL 7 Response to Sur-Reply”). The Court finds this matter appropriate for decision without
oral argument. See Fed. R. Civ. P. 78; L.R. 7-15. After considering the moving, opposing, and
reply papers, the Court GRANTS ICSOP’s motion in limine No. 7.
I. Factual Background
This case is about a dispute between the County and ICSOP over insurance coverage for
groundwater contamination at the Chino Airport. See Dkt. # 123 (“Sum. J. Order”), 2. In 1990,
the California Regional Water Quality Control Board, Santa Ana Region issued a Cleanup and
Abatement Order directing the County to take certain actions with respect to groundwater
contamination allegedly emanating from the Chino Airport. Id. Since the 1990 abatement order,
the Control Board has issued two more abatement orders—one in 2008 and another in
2017—that directed the County to take further actions. Id. 3.
From July 23, 1966, to July 23, 1975, the County was insured by ICSOP under three
umbrella liability insurance policies, each of which had a three-year policy term. Id. Under the
policies, ICSOP agreed, subject to limitations, to “indemnify the Assured for all sums which the
Assured shall be obligated to pay by reason of the liability” that is imposed by law or assumed
under contract or agreement for damages and expenses “caused by or arising out of each
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
continuous or repeated exposure to conditions which unexpectedly and unintentionally results in
personal injury, property damage or advertising liability during the policy period.” Id. 4. And
“[a]ll such exposure to substantially the same general conditions existing at or emanating from
one premises location shall be deemed one occurrence.” Id.
Each of the policies also provides a $9 million per occurrence limit of liability. Id. 3.
And, at the summary judgment stage, the Court found that each of the ICSOP policies includes
an annual aggregate limit of liability of $9 million. Id. 3, 14–16. As each ISCOP policy had a
three-year term, the aggregate limit of liability set a coverage limit of $27 million for each
policy.
The County asserts that there are eighteen separate occurrences that caused the
groundwater contamination and seeks reimbursement under the policies. See id. 12. The County
asks for $13,993,556 in damages based on Chino Airport-related groundwater investigation and
remediation expenses that had been submitted by the County to ICSOP but have not yet been
paid (“unreimbursed expenses”). Declaration of Anthony Newman, Dkt. # 210-1 (“Newman
Decl.”), ¶ 10, Ex. F, Supplemental Expert Report of Jeffrey Kinrich, Dkt. # 210-7 (“Kinrich
Supp. Report), ¶¶ 1–2. In addition, the County seeks $37,119,196 in damages for future benefits
under ICSOP’s insurance policies for Chino Airport-related investigation and remediation
expenses that the County expects to incur in the future (“future policy benefits”). Id. ¶¶ 4–6. At
bottom, the County seeks to be awarded damages for the maximum amount of coverage it
contends remains under the policies. At issue in this motion in limine are the future policy
benefits that the County is seeking at trial.
II. Legal Standard
A motion in limine is “a procedural mechanism to limit in advance testimony or evidence
in a particular area.” United States v. Heller, 551 F.3d 1108, 1111 (9th Cir. 2009). A party may
also file a motion in limine to admit evidence. See United States v. Williams, 939 F.2d 721, 723
(9th Cir. 1991). A court has the power to grant such motions pursuant to its “inherent authority
to manage trials,” even though such rulings are not explicitly authorized by the Federal Rules of
Evidence. See Luce v. United States, 469 U.S. 38, 41 n.4 (1984). Regardless of a court’s initial
decision on a motion in limine, however, it may revisit the issue at trial. Id. at 41–42 (“[E]ven if
nothing unexpected happens at trial, the district judge is free, in the exercise of sound judicial
discretion, to alter a previous in limine ruling.”).
Federal Rule of Civil Procedure (“FRCP”) 26 (a)(1)(A) requires a plaintiff to make
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
26(a)(1)(A)(ii), the plaintiff must provide “a copy—or a description by category and
location—of all documents . . . that the [plaintiff] has in its possession, custody, or control and
may use to support its claims.” And FRCP 26(a)(1)(A)(iii) requires that the plaintiff provide “a
computation of each category of damages claimed” and must “make available for inspection and
copying as under [FRCP] 34 the documents or other evidentiary material, unless privileged or
protected from disclosure, on which each computation is based.” The advisory committee note
to FRCP 26 describes this last requirement as “the functional equivalent of a standing Request
for Production under [FRCP] 34.” Fed. R. Civ. P. 26 advisory committee’s note to 1993
amendments (explaining that, “[a] party claiming damages or other monetary relief must . . .
make available the supporting documents for inspection and copying as if a request for such
materials had been made under Rule 34”).
Relatedly, FRCP 26(e) requires that “[a] party who has made a disclosure under [FRCP]
26(a) . . . must supplement or correct its disclosure or response . . . in a timely manner if the
party learns that in some material respect the disclosure or response is incomplete or incorrect,
and if the additional or corrective information has not otherwise been made known to the other
parties during the discovery process or in writing.”

Under FRCP 37, when “a party fails to provide information or identify a witness as
required by FRCP 26(a) or (e), the party is not allowed to use that information or witness to
supply evidence on a motion, at a hearing, or at a trial.” Fed. R. Civ. P. 37(c)(1); Yeti by Molly
Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001) (Rule 37(c)(1) forbids “the
use at trial of any information required to be disclosed by Rule 26(a) that is not properly
disclosed”). This is typically a self-executing, automatic sanction, unless the party failing to
disclose the information can show either a “substantial justification” for the failure or that the
failure was harmless. See Hoffman v. Construction Protective Services, Inc., 541 F.3d 1175,
1180 (9th Cir. 2008); Fed. R. Civ. P. 37(c)(1) advisory committee notes (1993) (“The revision
provides a self-executing sanction for failure to make a disclosure required by Rule 26(a) . . . .”);
Yeti by Molly Ltd., 259 F.3d at 1106–07.
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
III. Discussion
The County seeks future policy benefits as damages for its claim of breach of the implied
covenant of good faith and fair dealing. See MIL 7 Opp. 1:2–10; see also Dkt. # 5 (“Compl.”),
¶¶ 49–56. ICSOP moves to preclude the County from questioning or offering evidence,
argument, or jury instructions relating to the County’s claim for future policy benefits, arguing
that the County’s future policy benefits claim is untimely, barred as a judicial admission, and is
not relevant and unduly prejudicial. MIL 7 1:1–13. The Court will address each of ICSOP’s
arguments in turn.

A. Timely Disclosure
In March 2022, the Court issued a scheduling order setting discovery cutoff dates. See
generally Dkts. # 25, 26. The Court set the fact discovery deadline for February 1, 2023. Dkt. #
25. On March 8, 2023, the Court extended the expert discovery deadline to May 5, 2023, for
non-claims handling experts and to May 26, 2023 for Stephen D. Prater and Paul C. Thomson
III. See generally Dkts. # 80, 84.
ICSOP argues that the County’s future policy claim is untimely because the County
“failed to identify future policy benefits as damages attributable to any alleged breach of the
implied covenant in its initial disclosures or produce evidence supporting such a claim during the
discovery period.” MIL 7 9:3–13. Further, it argues that “the County failed to designate an
expert on the amount or reasonableness of the investigation and remediation expenses it seeks to
recover as future policy benefits despite having designated Mr. Kinrich and Dr. Arulanantham as
damage experts.” Id. 9:4–9.
In its initial disclosures served in March 2022, the County stated it sought the following
damages arising from its claims for breach of contract and breach of the implied covenant of
good faith and fair dealing:
Future economic losses and damages that will be incurred by the County
to comply with and avoid and/or minimize the County’s liability in
connection with the CAOs and related governmental orders, and to
remediate the groundwater contamination alleged therein.
Damages resulting from ICSOP’s breach of the implied covenant of good
faith and fair dealing, including attorneys’ fees recoverable pursuant to
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
Declaration of Nicholas B. Salerno, Dkt. # 168-1 (“Salerno Decl.”), ¶ 2, Ex. 1, County’s Initial
Disclosures, Dkt. # 168-2 (“County’s Initial Disclosures”), 3:27–4:10.
As a category of documents that it may use to support its claims and defenses, the County
identified “[a]ny documents produced or identified by any third parties in discovery or in
response to any subpoena or request for information.” County’s Initial Disclosures 3:21–22.1
In August 2023, after the close of discovery, the County amended its initial disclosures,
specifying that it sought “[d]amages resulting from ICSOP’s breach of the implied covenant of
good faith and fair dealing, including attorneys’ fees recoverable pursuant to Brandt v. Superior
Court, 37 Cal. 3d 813 (1985) and future policy benefits recoverable pursuant to Egan v.
Mutual of Omaha, 24 Cal. 3d 809 (1979).” Salerno Decl., ¶ 3, Ex. 2, County’s First Amended
Initial Disclosure, Dkt. # 168-3 (“County’s First. Amd. Initial Disclosures”), 4:14–16 (emphasis
added). According to ICSOP, this amendment was the first time that the County indicated it was
“seeking damages for future policy benefits for costs that the County had not yet actually paid
based on an alleged breach of the implied covenant cause of action.” Salerno Decl. ¶ 3.
While unclear, the County did provide notice of a potential claim for future policy
benefits. The County’s initial disclosures contemplated future economic losses and other
damages arising from the County’s breach of the implied covenant of good faith and fair dealing
claim, which necessarily encompass a claim for future policy benefits.
At issue, however, is whether the County complied with the other requirements of FRCP
26, specifically, whether it complied with FRCP 26(a)(1)(A)(iii), which requires disclosure of “a
computation of each category of damages claimed by the disclosing party.”
The County claims that the documents that support the County’s future policy benefits
claim are the spreadsheets prepared and produced by the County’s environmental consultant,
Tetra Tech, Inc. (“Tetra Tech”). Newman Decl. ¶¶ 3–4. These documents, which are referred to
as “spend plans,” contain Tetra Tech’s projections of the anticipated expenses that the County
will incur over the next thirty to fifty years to investigate and remediate the groundwater
1 The County also points to its disclosure indicating that it will rely on “[d]ocuments evidencing
the amounts spent by the County to comply with the COAs and investigate, monitor, cleanup,
and/or abate the alleged groundwater contamination asserted therein.” MIL 7 Opp. 9:3–7 (citing
County’s Initial Disclosures 3:14–16) (emphasis added). But the County referred to documents
of expenses spent in the past tense, and therefore cannot rely on this disclosure as notice of
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
contamination at the Chino Airport. Id. ¶ 3. In response to a subpoena served by ICSOP, Tetra
Tech produced numerous spend plan spreadsheets in December 2022. Id. ¶ 4, see also id., Ex.
B, Dkt. # 210-3; id., Ex. C, Dkt. # 210-4. The spreadsheets are single page documents,
identified by the title “Chino Airport Plume Remediation Project,” that include descriptions and
estimations of the anticipated expenses. See id. In September 2023, following the close of fact
discovery, the County produced an updated spend plan, that includes Tetra Tech’s updated
projections regarding the expected Chino Airport-related investigation and remediation expenses
as of August 30, 2023. Newman Decl. ¶ 6.; Salerno Decl. ¶ 4; see also id., Ex. 3, Dkt. # 168-4.

On October 3, 2023, months after the close of expert discovery, the County also served a
supplemental expert report of Jeffrey Kinrich. Newman Decl. ¶ 10. In the report, Mr. Kinrich
both supplements his initial report, where he opines on the total damages based on unreimbursed
expenses for the Chino Airport-related groundwater investigation and remediation as of
February 8, 2023, and provides a present value calculation of the County’s claim for future
policy benefits. Kinrich Supp. Report ¶¶ 1–3. Mr. Kinrich explains that he had been provided a
spend plan of the expected future investigation and remediation expenses associated with the
groundwater contamination at the Chino Airport prepared by Tetra Tech and, as of August 30,
2023, Tetra Tech projects over $88 million in future investigation and remediation expenses
through 2073. Id. Counsel informed Mr. Kinrich, however, that $54 million remained available
under the policies. Id. ¶ 5. Mr. Kinrich subtracts his calculation of the County’s reimbursed
expenses—$13,993,556—from the $54 million to arrive at $40,006,444 in available coverage.
Id. As he estimates that that the projected costs will reach the policy limit in 2025, he then
calculates the net present value of the available coverage and opines that the damages for the
future policy benefits are $37,119,196. Id. ¶ 6.

ICSOP argues that this evidence is improper because none of the Tetra Tech spreadsheets
were produced by the County or identified as documents that the County may rely on to support
a claim for future policy benefits in any disclosure. Salerno Decl. ¶ 9. Accordingly, “[t]he
County’s Rule 26(a) disclosure obligations are not satisfied by unspecified documents obtained
by ICSOP via subpoena to non-parties. The failure of the County to satisfy its affirmative
obligation to disclose the amount and nature of any future damage claim or designate any
witness on the topic unfairly denied ICSOP the ability to address the claim during the course of
discovery.” MIL 7 10:21–26. Further, ICSOP argues that Mr. Kinrich’s new opinions related to
the belated future damages claim are untimely and subject to automatic sanction. MIL 7 Reply
12:21–23.
The County, on the other hand, argues ICSOP is to blame for not inquiring about the
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
December 2022 through its subpoena to Tetra Tech. Id. 9:15–19. According to the County, this
allowed ICSOP ample opportunities to inquire about the spend plans. Id. 10:10–11:7. For
example, the County points out that ICSOP received the plans in January 2023 before the
deposition of Tetra Tech’s lead consultant on the Chino project, Benjamin Weink, who was
disclosed as a person with information concerning “potential remedial plans to cleanup and/or
abate the contamination.”2 Id. 10:10–21. And, ICSOP received a spend plan produced by Tetra
Tech through its subpoena to of one of the County’s experts, Anton Raviraj Arulanantham,
Ph.D. Id. 10:22–11:7. The County argues that ICSOP could have later asked Dr. Arulanantham
about the spend plan, but also did not. Id.
In addition, while conceding that the updated spend plan provided to ICSOP in September
2023 and Mr. Kinrich’s supplemental report served in October 2023 were untimely, the County
argues the untimeliness with respect these documents is substantially justified and/or harmless.
Id. 12:11–16.
The Court finds the County’s arguments unpersuasive. The County seeks both
unreimbursed expense damages of $13,993,556 and future policy benefits of $40,006,444.
Kinrich Supp. Report ¶¶ 2, 5. Given that the future policy benefits are the majority of the
damages sought in this action, it is surprising that the County did not provide a computation of
its future policy benefits claim during discovery, particularly given the County’s position that the
future policy benefits were the “future economic losses” contemplated by the County in its initial
disclosures served in March 2022. Instead, the County broadly referred to future economic loss
damages associated with its breach of the implied covenant of good faith and fair dealing claim
but did not itself produce a supporting document until September 2023 or provide a computation
for the future economic damages until October 2023. The County cannot comply with its
obligations under FRCP 26 by merely listing the type of damages it intends to seek. Hakim v.
Murano, Inc., No. CV 15-05633 JVS (PLAx), 2017 WL 11632290, at *4 (C.D. Cal. Mar. 6,
2017), on reconsideration in part, No. CV 15-05633 JVS (PLAx), 2017 WL 11632278 (C.D.
Cal. May 2, 2017) (“A list of categories of damages is no substitute [for computation] because a
mere list fails to provide the opposing fair notice of the damages claimed.”).
According to the County, ICSOP should have understood from Tetra Tech’s production
that the spend plans would be used to substantiate its claims for future policy benefits. But that
misstates the obligation placed on the County by FRCP 26. Without an explanation of how the
spend plans would be used to support the County’s damages claim, it is unclear how ICSOP
2 The County also designated Mr. Weink as a percipient expert and granted ICSOP an additional
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
could have understood the damages it sought. For instance, the spend plans do not appear to
disclose the cost of remediation and investigation attributable to each occurrence the County
seeks damages. Further, each policy had an aggregate limit of coverage available. As shown by
Mr. Kinrich, to compute the damages for the future policy benefits, the County had to determine
what expenses had been incurred, what had been paid, and what coverage remained available.
“By its very terms Rule 26(a) requires more than providing—without any
explanation—undifferentiated financial statements; it requires a computation, supported by
documents.” Frontline Med. Assocs., Inc. v. Coventry Health Care, 263 F.R.D. 567, 569 (C.D.
Cal. 2009) (citing Design Strategy, Inc. v. Davis, 469 F.3d 284, 295 (2d Cir.2006)) (cleaned up).
The County failed to offer any computation of future policy benefit damages based on the spend
plans to ICSOP before the close of fact discovery. Even if ICSOP had been informed of “the
future costs that the County will have to shoulder as a result of the groundwater contamination,”
MIL 7 Opp. 11:16–18, the County had an obligation to show how the future costs fit into its
claim for damages.
While the County may not have had all the information necessary to provide a
computation of damages at the time of its initial disclosures, the County had access to Tetra
Tech’s production in December 2022. It had a duty to supplement its damages computation.
See FRCP 26(e)(1)(A). Given the timing of Tetra Tech’s production, the County certainly could
have included a preliminary calculation of the future policy benefit damages in Mr. Kinrich’s
initial expert report served in February 2023. See Salerno Decl. ¶ 11. Further, regardless of
whether ICSOP obtained the spend plans via third-party subpoena, the County could have
indicated that it was relying on the documents to support its future benefits claim by producing
the documents itself, like it did in September 2023. Cf. Uni-Splendor Corp. v. Remington
Designs, LLC, No. CV 16-9316 PA (SSx), 2017 WL 10581102, at *2 (C.D. Cal. Sept. 5, 2017)
(“It is beyond serious dispute that a party seeking damages has an obligation to produce financial
data during discovery to support its damages calculation.”).

FRCP 26(a)’s purpose is “to accelerate the exchange of basic information that is needed
in most cases to prepare for trial or make an informed decision about settlement. Ketab Corp. v.
Mesriani L. Grp., No. CV 14-07241-RSWL-MRWx, 2016 WL 5921767, at *2 (C.D. Cal. Mar.
18, 2016) (citing City and Cnty. Of San Francisco v. Tutor-Saliba Corp., 218 F.R.D. 219, 221
(N.D. Cal. 2003)) (cleaned up). By never providing a calculation of its future policy benefits,
the County frustrated that purpose and prevented ICSOP from understanding the contours of its
damages claim.
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
Lastly, the County’s argument that ICSOP failed to conduct discovery on the spend plans
is not persuasive. Under the County’s logic, ICSOP should have figured out from a third-party
production the damages sought by the County. The Court will not endorse the County’s view
that it was permitted to hide the ball as to its damages’ claims. ICSOP’s “failure to conduct
discovery on the issue of damages does not absolve [the County] of its discovery obligations and
render [the County’s] failure to disclose damages computations to be substantially justified or
harmless.” Ketab Corp., 2016 WL 5921767 at *3.
The County also fails to provide other reasons for how its untimely disclosures were
substantially justified and harmless. The County argues that the updated spend plan “is merely
an update of costs based on Tetra Tech’s current analysis,” and, since the future projected
expenses increased only slightly since the spend plans produced in December 2022, it makes
minimal difference as to the analysis. MIL 7 Opp. 12:17–26. But this argument does not negate
the fact that the County failed to provide a computation of future policy damages or even
produce the documents, which would have put ICSOP on notice and allowed them to conduct
discovery. In addition, the County argues that Mr. Kinrich’s supplemental report is harmless
because “the present value calculation of future policy benefits reduces the projected value of
those benefits by several million dollars.” Id. 13:15–16. The County’s argument is not
persuasive. Mr. Kinrich is calculating the current value of the future payments it seeks under the
remaining coverage of the policies, which should be the equivalent of what the County claims it
would receive in reimbursements in later years.
Indeed, the County’s late disclosed damages claim for nearly an additional $40 million
from ICSOP is affirmatively not harmless as the Court would need to reopen discovery to allow
ICSOP to prepare a defense to the County’s claim for future policy benefits. See Hoffman, 541
F.3d at 1180 (finding that “[l]ater disclosure of damages would have mostly likely required the
court to create a new briefing schedule and perhaps re-open discovery,” and “[s]uch
modifications to the court’s and the parties’ schedules supports a finding that the failure to
disclose was not harmless.”).
In sum, the County has not met its burden in proving that its failure to disclose the
required information was substantially justified or is harmless. Accordingly, the Court finds that
the County has failed to comply with FRCP 26, its evidence supporting its future policy benefits
claim is untimely, and its failure to comply was not substantially justified or harmless.3 The
3 The County can still seek punitive damages and its Brandt fees arising from its claim of breach
of the implied covenant of good faith and fair dealing. Because the sanction does not amount to
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
Court thus GRANTS ICSOP’s motion in limine No. 7 precluding the County from offering
evidence or argument regarding its damages claim for future policy benefits. The Court notes,
however, that the Tetra Tech documents were timely produced. Thus, the spend plans can be
used, just not for the purpose of a future policy benefits damages claim.

Although the Court need not reach ICSOP’s remaining arguments, the Court will address
them as they implicate other motions in limine and will provide additional clarity for trial.
B. Judicial Admission
ICSOP argues that “the County affirmed in its reply in support of its motion for partial
summary judgment that [the County] was not seeking damages for amounts that had not actually
been paid by the County,” and its affirmation constitutes a “judicial admission that precludes the
County from asserting the previously undisclosed claim for future benefits at this stage.” MIL 7
7:19–24.
“Judicial admissions are formal admissions in the pleadings which have the effect of
withdrawing a fact from issue and dispensing wholly with the need for proof of the fact.”
American Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224, 226 (9th Cir. 1988). “[S]tatements of
fact contained in a brief may be considered admissions of the party in the discretion of the
district court.” Id. at 227. But to be a judicial admission, a statement must be “deliberate, clear,
and unequivocal.” E.g., Breville USA, Inc. v. Hurom L.S. Co., No. CV 13-8324 DMG (AJWx,)
2014 WL 12600145, at *5 (C.D. Cal. Apr. 28, 2014); 32 C.J.S. Evidence § 527 (“Any deliberate,
clear, and unequivocal statement, either written or oral, made in the course of a judicial
proceeding, qualifies as a judicial admission.”).
The County moved for partial summary judgment on ICSOP’s twelfth affirmative defense
relating to the “Condition J. Loss Payable” clause of the ICSOP policies, arguing that, contrary
to ICSOP’s assertion, nothing in the Loss Payable clause “conditions ICSOP’s obligations on
existence of a final judgment or compromise.” County’s Mot. for Partial Sum. J., Dkt. # 75,
23:18–19:5. In Opposition, ICSOP countered that the “Loss Payable Provision expressly states
that ICSOP need not make payment for [future economic losses and damages] unless and until
the County actual[ly] incurs those costs,” and, thus, the County “cannot show an absence of
material facts supporting ICSOP’s 12th Affirmative Defense.” ICSOP’S Opp. to County’s Mot.
for Partial Sum. J., Dkt. # 98, 25:10–20. In reply, the County stated:
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
Finally, ICSOP now claims that it is asserting its 12th (Loss Payable) affirmative
defense only to the extent that the County seeks to have ICSOP pay amounts before
they are even paid by the County. Because this is the first time that ICSOP has shared
this rationale and given ICSOP’s penchant for shifting positions, this Court should
enter an order granting the County’s motion except insofar as the County seeks to
have ICSOP pay amounts before they are even paid by the County (which it does not,
in any event).
Reply ISO County’s Mot. for Partial Sum. J., Dkt. # 114, 12:8–14 (emphasis added).
The Court denied the County’s motion for summary judgment on ICSOP’s twelfth
affirmative defense because “the parties agree[d] in their papers that the affirmative defense is
asserted only to the extent that the County seeks to have ICSOP pay amounts before they are
paid by the County.” Sum. J. Order 18.
At issue here is the parenthetical in the County’s reply, which ICSOP contends is a
judicial admission that bars the County from seeking future policy benefits. See MIL 7 7:19–24.
The County contends that the statement was made in the context of ICSOP’s affirmative defense
concerning the Loss Payable provision in ICSOP’s policies, and that it “merely said that it does
not seek to have ICSOP pay amounts before they are even paid by the County.” MIL 7 Opp.
5:12–20. And as such, the County stated that it “intended to comply with the Loss Payable
provision.” Id. 6:24–26. The County argues that as the “the Loss Payable provision only applies
to claims for benefits under the contract, not to damages for breach of the implied covenant,” the
statement did not include any “reference to the County’s pursuit of tort damages based on
ICSOP’s breach of the implied covenant of good faith and fair dealing.” Id. 5:12–20.
“[C]ontractual insurance policies contain an implied covenant of good faith and fair
dealing, which is characterized as ‘insurance bad faith’ and for which a plaintiff can receive tort
damages.” Nat’l Bank of California v. Progressive Cas. Ins. Co., 938 F. Supp. 2d 919, 940
(C.D. Cal. 2013). Indeed, the breach of contract claim is a separate cause of action. And
contrary to ICSOP’s assertion that “to establish bad faith, there must be an associated breach of
the insurance contract,” Id. 11:15–16, a “breach of a specific provision of the contract is not a
necessary prerequisite to a breach of an implied covenant of good faith and fair dealing.”
Marsu, B.V. v. Walt Disney Co., 185 F.3d 932, 937 (9th Cir. 1999) (cleaned up); see also
Akopian v. JPMorgan Chase Bank, N.A., No. CV 14-05760-RGK (PLAx), 2014 WL 12591623,
at *3 (C.D. Cal. Sept. 24, 2014).
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
ICSOP asks the Court to make the inferential leap that the County’s statement, made in
the context of its Loss Payable provision, indicated that the County also stated it would not seek
future damages under its cause of action for breach of the implied covenant of good faith and
fair dealing. See FAC ¶¶ 49–56. But the Court cannot read a “deliberate, clear, and unequivocal
statement” that the County is no longer pursuing its tort damages from the County’s
parenthetical, particularly when the cause of action implicates different types of damages.
Accordingly, the Court finds that the County’s parenthetical does not amount to admission that it
no longer sought a claim for future damages.
C. Relevance
ICSOP lastly argues that the County’s claim for “future policy benefits lacks relevance.”
See MIL 7 11:1–15:3. ICSOP raises two arguments: (1) the County’s claim for future policy
benefits has no support in California law, id. 11:15–14:19; and (2) the County’s claim for future
policy damages lacks relevance because it cannot recover an amount in excess of the aggregate
limit of the policies, id. 14:20–15:3; see also id. 2:15–3:5. The Court will address each in turn.
i. The County’s claim for future policy benefits is not contrary to California
law.

ICSOP argues that the County’s “claim that it is entitled to future policy benefits under
the ICSOP Policies if it prevails on its claim for breach of the implied covenant [is] based on a
misapplication of [Egan v. Mutual of Omaha Ins. Co., 24 Cal. 3d 809 (1979)].” While
conceding that the California Supreme Court in Egan found future policy benefits may be
recovered in a valid tort cause of action for breach of the implied covenant of good faith and fair
dealing, ICSOP argues the holding “was limited to the facts of the case and the specific
provisions of the disability insurance policy at issue which provided lifetime benefits in the
event of an irreversible condition (i.e. total disability).” MIL 7 12:15–13:2. ICSOP contends
that Egan does not apply to the ICSOP policies, which include a loss payable provision, as “no
court has applied Egan” to allow “the recovery of future policy benefits” under such
circumstances. MIL 7 13:3–10.
ICSOP, however, reads Egan too narrowly. In Egan, the California Supreme Court
stated:
We have never held, however, that future policy benefits may not be recovered in a
valid tort cause of action for breach of the implied covenant of good faith and fair
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
. . . , the jury may include in the compensatory damage award future policy benefits
that they reasonably conclude, after examination of the policy’s provisions and other
evidence, the policy holder would have been entitled to receive had the contract been
honored by the insurer.
24 Cal.3d at 824, fn. 7.
Contrary to ICSOP’s assertion, the Supreme Court in Egan did not state that its finding
was limited. Indeed, the Ninth Circuit has indicated that Egan “appl[ies] to insurance bad faith
claims generally.” Hangarter v. Provident Life & Acc. Ins. Co., 373 F.3d 998, 1012 (9th Cir.
2004) (citing Pistorius v. Prudential Ins. Co., 123 Cal. App. 3d 541 (1981)). ICSOP has not
provided any authority finding that Egan cannot apply to the policies at issue in this case. As
such, it has not provided a reason for the Court to exclude the evidence of the County’s future
policy benefits on this basis. Shenon v. New York Life Ins. Co., No. 2:18-CV-00240-CAS
(AGRx), 2020 WL 1317722, at *7–8 (C.D. Cal. Mar. 16, 2020).
ii. Evidence of future costs in excess of the $27 million aggregate does not
lack relevance.
ICSOP argues that the aggregate limit of the ICSOP policies is $27 million. MIL 7
14:22–24. ICSOP has already paid $9 million to the County. Id. 14:26–28. Accordingly,
ICSOP argues that “[g]iven the County cannot recover any amounts in excess of the aggregate
limit, any evidence of future investigation and remediation costs in excess of $18 million that
may or may not be incurred” lacks relevance and is unduly prejudicial. Id.
As an initial matter, though masked as a motion in limine, ICSOP seeks a dispositive
ruling of the Court as to the aggregate limit of the policies. This is improper. “A motion in
limine is not the proper vehicle for seeking a dispositive ruling on a claim, particularly after the
deadline for filing such motions has passed.” E.g., Hana Fin., Inc. v. Hana Bank, 735 F.3d
1158, 1162 n.4 (9th Cir. 2013); see also Altair Instruments, Inc. v. Telebrands Corp, No. CV 19-
8967 PSG (JCx), 2021 WL 5238787, at *1 (C.D. Cal. Feb. 18, 2021) (“[M]otions in limine
should not be used as disguised motions for summary judgment.”). The Court agrees with the
County that ICSOP’s argument “is nothing more than a disguised summary judgment motion
that should have been raised when ICSOP moved for summary judgment on the aggregate limits
so that the matter could be properly briefed.” MIL 7 Opp. 17:10–13. Although the Court may
reject ICSOP’s argument on this basis alone, the Court will provide guidance on the merits of
ICSOP’s argument regarding the amount available under the aggregate limit.
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
ICSOP’s argument is based on two provisions of the ICSOP polices: (1) the aggregate
limit provided in Section II. Limit of Liability, Item 2(b); and (2) the Prior Insurance Non
Cumulation of Liability provision—Condition C (referred to below as “Condition C” or “Non-
Cumulation Provision”). MIL 7 2:16–3:5.
As to Section II. Limit of Liability, Item 2(b), the Court previously found that the
“policies here unambiguously include a general aggregate limit.” Sum. J. Order 15. The Limit
of Liability provision states that ICSOP is liable “only up to a further sum as stated in Item 2(a)
of the Declarations in all in respect of each occurrence,” and “subject to a limit as stated in Item
2(b) of the Declarations in the aggregate for each annual period during the currency of this
Policy, separately in respect of Products Liability and in respect of Personal Injury (fatal or non-
fatal) by Occupational Disease[.]” Id. 16. The Court interpreted Item 2(b) to establish that each
ICSOP policy had a general aggregate limit of $9 million per year. See id. 3, 16. Because each
policy is three years, each policy has a general aggregate limit of $27 million.4
At issue, however, is ICSOP’s second contention. For the first time in the case, ICSOP
argues that Condition C applies and reduces the aggregate limit of coverage under the County’s
latter two policies. Condition C provides:
It is agreed that if any loss covered hereunder is also covered in whole or in part under
any other excess policy issued to the Assured prior to the inception date hereof the
limit of liability hereon as stated in Item 2 of the Declarations shall be reduced by any
amounts due to the Assured on account of such loss under such prior insurance.
4 ICSOP claims that the Court “noted the importance of the aggregate limit ruling stating that no
applicable aggregate limits under the insurance policies would create ‘a coverage potential of
$162 million instead of $27 million.” MIL 7 2:21–24 (emphasis added). The Court, however,
stated that Magistrate Judge McDermott “found that ‘denying withdrawal would eliminate an
issue of mammoth importance from consideration on the merits,’ because the admission would
establish no aggregate limits under the insurance policy and create ‘a coverage potential of $162
million instead of $27 million.’” Sum. J. Order 7 (emphasis added). ICSOP attempts to
misconstrue the Court’s statements to suggest it previously determined there was only $27
million at issue. At summary judgment, the Court was referring to a singular policy, not all the
polices as ICSOP suggests. If there was no aggregate limit and the eighteen occurrences
occurred during the span of one policy, then there would be $162 million in coverage available.
But, if the aggregate limit were applicable, then each policy would be limited to $27 million.
While ICSOP appears to reference the Court’s order to somehow suggest it capped the total
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
E.g., Exhibit A - ICSOP Policy 426-0772, Dkt. # 5-2 (“ICSOP Policy 426-0772”), 5.5

ICSOP reads Condition C to indicate that once it pays the $27 million under the first
policy, it will exhaust the limits on the other two policies—making the latter two policies
valueless after the first limit is reached:
If any loss covered under ICSOP Policy nos. 429-0989 (7/23/1969–1972) and 4272-
1195 (7/23/1972–1975) is also covered in whole or in part under any other excess
policy issued to the County prior to the inception date of those policies including
ICSOP Policy no. 426-0772 (7/23/1966–1969), the aggregate limit of liability as
stated in Item 2 of the Declarations shall be reduced by any amounts due to the
County on account of such loss under such prior insurance. Accordingly, to the extent
the County can establish that three or more occurrences resulted in groundwater
contamination emanating from the Chino airport throughout the policy periods of the
ICSOP Policies that exhaust the $27 million aggregate limit of the first ICSOP Policy,
the aggregate limits of the second and third ICSOP Policies is reduced to zero dollars
as a result of such loss.”
MIL 7 Reply 3:27–4:9.
In support of its interpretation, ICSOP points the Court to Insurance Company of the
State of Pennsylvania v. Cnty. of San Bernardino, 2017 WL 2903259 (C.D. Cal. 2017), a prior
litigation where the County sought coverage for the costs it incurred from a government-ordered
cleanup of the Mid–Valley Sanitary Landfill. E.g., MIL 7 3 n.1. There, the Court found
Condition C was an “anti-stacking” provision that allowed ICSOP to reduce $9 million from its
per occurrence liability under the second and third policies. Ins. Co. of the State of Pennsylvania
v. Cnty. of San Bernardino, No. CV 16-0128 PSG (SSX), 2017 WL 2903259, at *4–5 (C.D. Cal.
Mar. 8, 2017), aff’d sub nom. Ins. Co. of Pennsylvania v. Cnty. of San Bernardino, 776 F. App’x
400 (9th Cir. 2019).
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
Both parties appear6 to agree that Court’s and the Ninth Circuit’s rulings are only
applicable to the per occurrence limit. MIL 7 Reply 5:18–19; MIL 7 Sur-Reply 1:18–22; see also
Ins. Co. of Pennsylvania v. Cnty. of San Bernardino, 776 F. App’x 400, 401 (9th Cir. 2019)
(“The question in this diversity case is whether certain language (‘Condition C’) in three policies
issued by [ICSOP] to the [County] is an enforceable antistacking provision that precludes the
County from aggregating the per-occurrence policy limits in the three policies.”).
ICSOP states that it is the “rationale this Court and the Ninth Circuit used in applying the
non-cumulation provision to the per-occurrence limit that ICSOP contends applies equally to the
aggregate limit because the non-cumulation provision applies to both the per-occurrence and
aggregate limit that are both set forth in Item 2 of the Declarations of each of the ICSOP
Policies.” MIL 7 Response to Sur-Reply 3:11–16.
The County’s position is that the Non-Cumulation Provision does not apply here.
Specifically, the County argues that “[b]y its plain terms, this provision only applies to reduce
the limits of liability of subsequent ICSOP Policies if the same ‘loss’ is covered under more than
one of the Policies.” MIL 7 Opp. 17:27–18:2. The County “is seeking to obtain coverage for
separate occurrences. It is not trying to ‘stack’ the same occurrence over multiple policies in
order to get paid for the same occurrence under successive policies.” MIL 7 Opp. 18:6–8. As a
result, the County contends that the Non-Cumulation Provision is inapplicable and that $54
million in coverage remains available under the policies. The Court agrees with the County.
The key issue regarding whether Condition C is implicated is whether the later polices
cover the same “loss.” Condition C reduces later policies limits only by “any amounts due to the
Assured on account of such loss under such prior insurance.” ICSOP encourages the Court to
interpret “loss” to broadly “apply to any property damage loss arising out of the alleged
groundwater contamination emanating from the Chino Airport.” MIL 7 Reply 9:12–15.
When interpreting the meaning of policy language, “courts must read limitations on
coverage narrowly.” Chartrand v. Illinois Union Ins. Co., No. C 08–05805 JSW, 2009 WL
2776484, at *3 (N.D. Cal. Aug. 28, 2009); see also Associated Indus. Ins. Co., Inc. v.
McNicholas & McNicholas LLP, 495 F. Supp. 3d 869, 875 (C.D. Cal. 2020) (“Insurance
‘coverage is interpreted broadly so as to afford the greatest possible protection to the insured,’
6 ICSOP has claimed that the “Court has found in prior litigation” that Condition C “prevents the
County from stacking the aggregate limits of the latter two ICSOP Policies.” See ICSOP Opp. to
County MIL 3, Dkt. # 195, 7:27–8:2. But any contention that the Court had previously resolved
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
while ‘exclusionary clauses are interpreted narrowly against the insurer.’”) (citing MacKinnon v.
Truck Ins. Exch., 31 Cal. 4th 635, 648, (2003)).
The policies at issue here are occurrence-based policies. See Sum. J. Order 3. The term
loss in Condition C, must thus be tethered to occurrence and a separate occurrence must be a
different loss. If the Court were to adopt ICSOP’s interpretation, the Court would violate its
instruction to construe limitations narrowly. ICSOP would have the Court read into the policy
an obligation that the insured prove not just a separate occurrence but in addition that the
separate occurrence resulted from a separate undefined loss. The language of the policies does
not contemplate that dual obligation on the County. Indeed, in the prior litigation, ICSOP
supported this interpretation by stating:
[W]hile the term “loss” is undefined, if the term is read in context it plainly refers to
a loss caused by a single occurrence. This is because the noncumulation provision
expressly refers to a loss as reducing the limit of liability in Item 2 of the declarations,
and Item 2 of the declarations sets forth the $9 million limit in all for each occurrence.
Thus, the non-cumulation provision anticipates that if the limit of liability applies to
the loss, then the limit of liability will be reduced by any payment made under a prior
excess policy issued to the County. This means that loss as used in the non-
cumulation provision is a loss caused by a single occurrence.
MIL 7 Sur-Reply, Ex. A, ICSOP’s Opp. to County’s Mot. for Partial Sum. J., 18:15–23.
This interpretation further supports the function of Condition C as it prevents a
policyholder from stacking the policy limits and obtaining coverage from the same occurrence
over multiple periods. Condition C reduces later policies limits only by “any amounts due to the
Assured on account of such loss under such prior insurance.” It cannot be read to suggest that
the aggregate limit for a previous policy could reduce the coverage available for an occurrence
that has yet to be paid. To read so would suggest that the County did not purchase coverage
from the second and third policies for damage resulting from a separate occurrence that took
place during the second and third policy periods if the aggregate limits on the first policy had
been exhausted. See Cannon Elec., Inc. v. Ace Prop. & Cas. Co., 2021 Cal. Super. LEXIS 7423,
*131–132 (“The purpose of the Non Cumulation condition is if a policy holder seeks to recover
for the same loss under more than one year’s policy, its recovery for that loss must be limited to
the amount of one year’s limits for that loss. Its purpose is not to eradicate aggregate limits for
losses no insurer has paid. . . . In short, the condition does not apply until the insured has
already obtained indemnification for that specific loss from another policy in the relevant
coverage layer.”).
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No. CV 21-01978 PSG (AS) Date February 14, 2024
Title San Bernardino County v. The Insurance Company of the State of Pennsylvania
Lastly, even if the provision was ambiguous, it must be interpreted based on the insured’s
objectively reasonable expectations. Here, the County could not have expected that the
aggregate limit of an earlier policy would exhaust coverage for separate occurrences in later
years. It entered an occurrence-based insurance policy. If the “loss” contemplated in Condition
C were broader, the County would be subjecting itself to prove both an occurrence, and that the
occurrence was part of a separate loss. That could not be what the County expected when
entering the policy.
Accordingly, the Court agrees with the County that because “same ‘loss’ is not at issue,
this provision is immaterial.” MIL 7 18:7–8. Because the County is seeking coverage for
multiple occurrences, each occurrence can be covered fully under one ICSOP policy, and thus
the non-cumulation clause is not implicated.
IV. Conclusion
For the foregoing reasons, ICSOP’s motion in limine No. 7 is GRANTED. The County
may not introduce evidence of damages for its future policy benefits, but the County, however, is
not precluded from introducing the Tetra Tech’s spend plans for any other purpose.
IT IS SO ORDERED.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9985876. Public record. Not legal advice.