OPINION AND ORDER

J. PAUL OETKEN, District Judge.

Plaintiff Migdal Insurance Company, Ltd. ("Migdal"), brings this action against Defendant the Insurance Company of the State of Pennsylvania ("ICSOP"), for equitable contribution.1 ICSOP counterclaims for a declaration that it is not liable for contribution. Both parties move for summary judgment under Federal Rule of Civil Procedure 56. For the reasons that follow, Migdal's motion is granted and ICSOP's motion is denied.

I. Background

Migdal wrote a general commercial liability insurance policy covering Kinetics Israel, Ltd. ("Kinetics Israel"), an Israeli engineering concern. ICSOP wrote a global-risk policy covering Kinetics, Inc. ("Kinetics"), the California-based company that owns Kinetics Israel. Both policy documents address the possibility that the insured carried other insurance. Migdal's policy reads:

(Dkt. No. 50, Declaration of Andrew N. Bourne, Ex. 1. ["Migdal Policy"], at 20.)2 ICSOP's policy—which is reproduced in full as an appendix to this Opinion—states that its insurance is primary unless certain exceptions apply. (Appendix A, at 13; see also Dkt. No. 46, ICSOP's Memorandum of Law in Support of its Motion for Summary Judgment ["ICSOP Support"], at 3.)3 The issue in this case is whether those exceptions apply.

In May 2004, employees of Kinetics Israel accidentally damaged equipment owned by Tower, Inc., another Israeli company. Migdal defended Kinetics Israel in the resulting Israeli lawsuit, and ultimately settled the action for $1.75 million and incurred 216,951 New Israeli Shekels (around $56,000) in defense costs. ICSOP did not participate in the Israeli action. In 2014, Migdal brought this suit seeking contribution from ICSOP. The parties agree that the Tower, Inc., accident is covered by both policies and that Migdal's insurance is primary. The primary question is whether ICSOP's policy is "excess" (meaning it does not pay until Kinetics, Inc.'s other insurance is exhausted), or "primary" (meaning it pays regardless).

II. Discussion

Migdal moves for summary judgment that it is entitled to contribution because ICSOP's policy is not excess to Migdal's; ICSOP moves for summary judgment that its policy is excess to Migdal's. ICSOP also argues that Migdal is not entitled to summary judgment on the issue of damages. The Court discusses the legal standard governing the motions; briefly addresses the choice-of-law issue; analyzes the summary judgment motions regarding contribution; and, finally, discusses the summary judgment motion regarding damages.

A. Legal Standard

Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56. A fact is material if it "might affect the outcome of the suit under the governing law," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), and a dispute is genuine if, considering the record as a whole, a rational jury could find in favor of the non-moving party, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

The initial burden of a movant on summary judgment is to provide evidence on each element of her claim or defense illustrating her entitlement to relief. Vermont Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004). If the movant meets this initial burden of production, the non-moving party must then identify specific facts demonstrating a genuine issue for trial. The court views all evidence "in the light most favorable to the nonmoving party and draw[s] all reasonable inferences in its favor." Anderson, 447 U.S. at 250-51. A motion for summary judgment may be granted only if "no reasonable trier of fact could find in favor of the nonmoving party." Allen v. Coughlin, 64 F.3d 77, 79 (2d Cir. 1995) (internal quotation marks omitted). But the non-moving party cannot rely upon mere "conclusory statements, conjecture, or speculation" to meet its burden. Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996) (citing, inter alia, Matsushita, 475 U.S. at 587).

B. Choice of Law Revisited

For the reasons explained in the Court's opinion denying ICSOP's motion to dismiss, California law governs this dispute. See Migdal Ins. Co. v. Ins. Co. of Pennsylvania, No. 14 Civ. 700 (JPO), 2014 WL 5149128, at *2 (S.D.N.Y. Oct. 14, 2014). Nonetheless, Migdal contends that the Court need not actually decide whether California or New York law governs this dispute because "there are no conflicts between the laws of New York and California regarding the issues of equitable contribution raised by this action." (Migdal Support, at 11.) As will become clearer later on, California's rule—such as it is—does appear to differ significantly from New York's. Compare, e.g., Liberty Mut. Ins. Co. v. Hartford Ins. Co. of Midwest, 25 A.D.3d 658, 662 (N.Y. App. Div. 2d Dep't 2006) (quoting State Farm Fire & Cas. Co. v. LiMauro, 65 N.Y.2d 369, 375-376 (1985)), with, e.g., Fireman's Fund Ins. Co. v. Maryland Cas. Co., 65 Cal.App.4th 1279, 1306 (1st Dist. 1998) (quoting Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co. 45 Cal.App.4th 1, 52 (1st Dist. 1996)). Therefore, because this case involves the interpretation of an insurance policy covering global risk, this Court applies the law of the insured's domicile: California. See Certain Underwriters at Lloyd's, London v. Foster Wheeler Corp., 36 A.D.3d 17, 24 (N.Y. App. Div. 1st Dep't 2006), aff'd, 9 N.Y.3d 928 (2007).4

C. Contribution

Equitable contribution5 claims arise when two insurers cover the same loss, but only one of them pays for it. The general principle is that when an insured has two insurers, her ordinarily fortuitous choice of whom to approach for payment should not determine who ultimately pays. But insurance companies, knowing this possibility, often include mutually irreconcilable "other insurance" clauses in their policies. CSE Ins. Grp. v. Northbrook Prop. & Cas. Co., 23 Cal.App.4th 1839, 1842 (2d Dist. 1994). As the cases cited in the margin below demonstrate, reconciling these irreconcilable clauses has been a "recurring task" of the California Court of Appeal, id.; reconciling the cases that reconcile the clauses—the task of this Court—is impossible, id. at 1843 ("`Excess-only' provisions have often collided with `proration' provisions, with results that cannot be harmonized.").6

Broadly speaking, "other insurance" clauses fall into three categories. "One subcategory is known as `pro rata' provisions, which look to limit the insurer's liability to the total proportion that its policy limits bear to the total coverage available to the insured." Commerce & Indus. Ins. Co. v. Chubb Custom Ins. Co., 75 Cal.App.4th 739, 744 (1st Dist. 1999) (internal quotation marks omitted). Next are "`excess only' clauses, which require the exhaustion of other insurance" before any payments are available on the excess policy. Id. Finally, "`escape' clauses extinguish[] the insurer's liability if the loss is covered by other insurance." Id; see also Olympic Ins. Co. v. Employers Surplus Lines Ins. Co., 126 Cal.App.3d 593, 598 (1st Dist. 1981).

The California Supreme Court has "expressly decline[d] to formulate a definitive rule" for determining whether one insurance policy is excess to another. Signal Companies, Inc. v. Harbor Ins. Co., 27 Cal.3d 359, 369 (1980). Instead, courts must weigh the "varying equitable considerations which may arise, and which affect the insured and the primary and excess carriers, and which depend upon the particular policies of insurance, the nature of the claim made, and the relation of the insured to the insurers." Id. Although California courts generally honor the terms of a policy agreement where possible, e.g., Fireman's Fund, 65 Cal. App. 4th at 1304, there are many exceptions to this rule, id., and, as such, "the modern trend is to require equitable contributions on a pro rata basis from all primary insurers regardless of the type of `other insurance' clause in their policies." Dart Indus., Inc. v. Commercial Union Ins. Co., 28 Cal.4th 1059, 1080 (2002).

But that "trend" is not an immutable rule. See id. (declining to decide "[w]hether or not the above rule is universally applicable."). Instead, in the absence of a strict rule from the California Supreme Court, the California Court of Appeal, in recent decisions, appears strictly to honor policy language only where that language renders the policy excess in certain, defined circumstances, and only where that language clearly provides that the insurance is excess. E.g., Hartford Cas. Ins. Co. v. Travelers Indem. Co., 110 Cal.App.4th 710, 726 (1st Dist. 2003). The policy language is ineffective where it simply says something to the effect of "this insurance is excess over any other insurance you may have." See, e.g., Fireman's Fund, 65 Cal. App. 4th at 1304.

Comparing Hartford with Fireman's Fund, a general principle emerges: policies are considered "excess" only when they declare themselves to be excess over specific other policies. California courts are suspicious of excess-only clauses because those clauses are similar to escape clauses, of which the California courts are exceedingly suspicious. Compare Hartford, 110 Cal. App. 4th at 726 ("Both policies declare themselves to be excess in the situation where the parties and the insurers are most likely to intend that result—when the insured is covered as an additional insured on another party's policy for some specific event or situation. A clause that carves out this intended exception to primary coverage is not similar to an escape clause, where the insurer appears to offer coverage that in fact evaporates in the presence of other insurance."), with Dart Indus., 28 Cal. 4th at 1080 ("[P]ublic policy disfavors escape clauses, whereby coverage purports to evaporate in the presence of other insurance. This disfavor should also apply, to a lesser extent, to excess-only clauses, by which carriers seek exculpation whenever the loss falls within another carrier's policy limit." (internal quotation marks and citations omitted)). Thus, where a policy is written in a manner suggesting that the insurer and the insured intended it to be excess coverage for a specific situation, courts will interpret it as such; where it appears as though the insurer included pro forma excess-only language, courts will disregard that language. See also Century Sur. Co. v. United Pac. Ins. Co., 109 Cal.App.4th 1246, 1255 (2d Dist. 2003), as modified (June 25, 2003) ("`[E]xcess' insurance . . . is that secondary insurance which provides coverage after other identified insurance is no longer on the risk. The identification of the underlying primary insurance may be as to (1) a particular policy or policies that are specifically described or (2) underlying coverage provided by a particular and specifically described insurer. In short, excess insurance is insurance that is expressly understood by both the insurer and insured to be secondary to specific underlying coverage which will not begin until after that underlying coverage is exhausted and which does not broaden that underlying coverage.") (citing Wells Fargo Bank v. California Ins. Guarantee Assn., 38 Cal.App.4th 936, 940 (1st Dist. 1995)) (certain emphasis omitted).

ICSOP contends that its policy is excess to Migdal's because of two provisions in ICSOP's policy: subsection (b)(3), and a clause that ICSOP labels "the exhaustion clause." (See generally ICSOP Support.) Subsection (b)(3) provides that the ICSOP insurance is "excess over . . . [a]ny other insurance or your self-insurance plan that that [sic] covers a loss on the same basis." (See Appendix A, at 13.) The parties dispute what this clause means; Migdal argues that it refers only to self-insurance plans, while ICSOP contends that it covers insurance like Migdal's. Even on ICSOP's reading, however, the California Court of Appeal would not interpret subsection (b)(3) to make ICSOP's policy excess over Migdal's because, unlike the clause in Hartford, (b)(3) does not reference any other specific insurance over which, or any other specific situation in which, it might be excess. Thus, even assuming that ICSOP's reading of the clause is correct, the California Court of Appeal would not enforce it against Migdal.

The context in which subsection (b)(3) appears supports this conclusion. Cf. Hartford, 110 Cal. App. 4th at 726. According to ICSOP, (b)(3) renders ICSOP's policy excess to "[a]ny other insurance . . . ." (Appendix A, at 13 (emphasis added).) But ICSOP concedes that subsections (b)(1) and (b)(2) exempt specific types of other insurance. Thus, reading (b)(3) as ICSOP prefers would render (b)(1) and (b)(2) superfluous. In response, ICSOP argues that (b)(3) is not superfluous because Migdal's policy falls into (b)(3) but does not fall into (b)(1) or (b)(2). (See Migdal Opposition, at 12.) This argument rests on a mistaken negation. See, e.g., Steve Schwartz, Conditional Reasoning: Contrapositive, Mistaken Reversal, Mistaken Negation, LSAT BLOG, April 10, 2009, available at http://lsatblog.blogspot.com/2009/04/conditionalreasoning-contrapositive.html. Migdal's policy can fall within (b)(3) but without (b)(1) and (b)(2), even though (b)(3) contains (b)(1) and (b)(2), which are, therefore, superfluous. All beagles are dogs; not all dogs are beagles. ICSOP cannot point to a Chihuahua to prove that an insurance policy exempting both dogs and beagles is not superfluous.

ICSOP's logical error, though, does not show that its reading of the policy is wrong. But only two possibilities remain. Either subsection (b)(3) covers all other insurance and the Court of Appeal would not enforce it for the reasons discussed above, or (b)(3) is unclear—or, for that matter, does not cover the Migdal policy—and the Court of Appeal would not enforce it for that reason.

Regardless, this Court's ultimate task is to interpret the holdings of California's highest court. See MindGames, Inc. v. Western Pub. Co., 218 F.3d 652, 655-56 (7th Cir. 2000) (Posner, J.) ("The rule is that in a case in federal court in which state law provides the rule of decision, the federal court must predict how the state's highest court would decide the case, and decide it the same way."); see also Broder v. Cablevision Sys. Corp., 418 F.3d 187, 199-200 (2d Cir. 2005) (holding that "[i]n the absence of any contrary . . . authority or other persuasive data establishing that the highest court of the state would decide otherwise," a federal court must "follow the state law decisions of state intermediate appellate courts" (quoting Pentech Int'l, Inc. v. Wall St. Clearing Co., 983 F.2d 441, 445-46 (2d Cir. 1993)) (internal quotation marks and brackets omitted)). The holdings of the California Court of Appeal provide only persuasive evidence of what the California Supreme Court would do. And the last word from the California Supreme Court on the subject is that "the modern trend is to require equitable contributions on a pro rata basis from all primary insurers regardless of the type of `other insurance' clause in their policies." Dart Indus., 28 Cal. 4th at 1080 (emphasis added). Thus, the Court concludes that the California Supreme Court would not interpret subsection (b)(3) to render the ICSOP policy excess to the Migdal policy.7

Next, ICSOP argues that the exhaustion clause relieves it of liability in this case. The exhaustion clause reads: "[a]ll payments made under any local policy issued to you by us or any other insurance company will reduce the Limits of Insurance of this policy." (ICSOP Support, at 11.) Migdal contends that the definition of "local underlying policy" found elsewhere in ICSOP's document excludes the Migdal policy. (Migdal Reply, at 13). Although Migdal is correct that the definition of "local underlying policy" would not include the Migdal policy,8 that does not mean that Migdal's policy is not a "local" policy. Nonetheless, even assuming ICSOP is correct that Migdal's policy is covered by the exhaustion clause, there is no reason to believe that the result sought by Migdal is inconsistent with that clause. Indeed, the presence of Migdal's policy has "reduce[d]" the "[l]imits" of the ICSOP policy by roughly 50%. This clause does not relieve ICSOP of all its liability. Instead it is, at best, a pro-rata clause requiring ICSOP to share liability with other insurers of the same risk.

D. ICSOP's Fair Share

Finally, ICSOP contends that summary judgment cannot be granted because it is unclear whether the Israeli settlement resolved only Tower, Inc.'s claims against Migdal or resolved other liabilities as well. The settlement agreement purports to resolve the "claim" at issue in that suit, which is defined as the "Statement of Claim (C.F. 1527/08) against Defendants in the District Court of Tel Aviv." (ICSOP Support, at 12.) "Defendants" in that action referred to both Kinetics Israel and Migdal. Thus, ICSOP contends, there is no way of knowing how much of the settlement payment was meant to extinguish Kinetics Israel's liability (which would be covered by the ICSOP policy) and how much was meant to extinguish Migdal's own liability as Tower's first party insurer (which would not be covered). Similarly, ICSOP contends that there is no way of knowing what portion of Migdal's attorney's fees in the Israeli action were attributable to its own liability to Tower. Migdal, on the other hand, contends that the settlement was intended to resolve only Migdal's derivative liability and that all attorney's fees were devoted to that liability only.

The Court is persuaded that these disputes are not genuine. At oral argument on these motions, ICSOP conceded that Migdal has put forth evidence to support its claim that the whole settlement amount was meant to resolve covered claims. (See, e.g., Dkt. No. 47-8, at 2.) ICSOP, in turn, produced only the Israeli complaint to support its contention that part of the settlement could have been intended to settle non-covered claims. (E.g., ICSOP Support, at 12.) But it could not identify any basis for a reasonable juror to believe that Migdal had any independent liability to Tower under their first-party insurance contract, or that any portion of the settlement amount was in fact for anything other than the (covered) negligence of Kinetics Israel, which was the basis for the litigation. Therefore, no reasonable juror could conclude that Migdal paid anything in order to settle any non-derivative claim against it. For the same reason, then, no reasonable juror could conclude that any portion of the attorney's fees Migdal paid in the Israeli action were devoted to the defense of these claims.9

ICSOP's fair share, then, is half of the settlement amount ($875,000) plus half of the attorney's fees (108,475.50 New Israeli Shekels10).

III. Conclusion

For the foregoing reasons, Migdal's motion for summary judgment is GRANTED and ICSOP's motion for summary judgment is DENIED. Counsel for Migdal shall submit a proposed judgment within 14 days.

The Clerk of the Court is directed to close the motions at docket numbers 45 and 49.

SO ORDERED.

Appendix A