In Re: K F Dairies, Inc. & Affiliates, Debtors. K F Dairies, Inc. & Affiliates v. Fireman's Fund Insurance Co.

Opinion by Judge MICHAEL DALY HAWKINS; Dissent by Judge BEEZER.

MICHAEL DALY HAWKINS, Circuit Judge:

K F Dairies, Inc. and Affiliates (“KF Dairies”) appeal the district court’s reversal of the bankruptcy court’s $1,142,783 *924judgment against Fireman’s Fund Insurance Company (“Fireman’s”). The bankruptcy court concluded that Fireman’s should not have refused to defend KF Dairies against the State of California’s claim in KF Dairies’s bankruptcy proceedings for the costs of abatement and cleanup of environmental contamination at sites owned by KF Dairies and for which KF Dairies was strictly liable…