American Employer's Ins. Co. v. Smith

• Decision Date: 24 April 1980
• Citation: 105 Cal.App.3d 94,163 Cal.Rptr. 649
• Court: California Court of Appeals Court of Appeals
• Parties: AMERICAN EMPLOYER'S INSURANCE COMPANY, a corporation, and First State Insurance Co., a corporation, Plaintiffs and Appellants, v. Michael SMITH, Defendant and Respondent. UNITED STATES FIDELITY & GUARANTY COMPANY, a corporation, Plaintiff, v. Michael SMITH, Defendant and Respondent, American Employers's Insurance Company, a corporation, and First State Insurance Co., a corporation, Defendants and Appellants. Civ. 17859.

Page 649

163 Cal.Rptr. 649

105 Cal.App.3d 94

AMERICAN EMPLOYER'S INSURANCE COMPANY, a corporation, and First State Insurance Co., a corporation, Plaintiffs and Appellants, v. Michael SMITH, Defendant and Respondent.

UNITED STATES FIDELITY & GUARANTY COMPANY, a corporation, Plaintiff, v. Michael SMITH, Defendant and Respondent, American Employers's Insurance Company, a corporation, and First State Insurance Co., a corporation, Defendants and Appellants.

Civ. 17859.

Court of Appeal, Third District, California.

April 24, 1980.

As Modified on Denial of Rehearing May 23, 1980.

Hearing Denied June 18, 1980.

Cole & Cole and Stephen N. Cole, Davis, for American Emp. Ins. Co. and First State Ins. Co.

Michael Smith, in pro. per. and Hardy, Erich & Brown, William A. Wilson and David W. Janes, Sacramento, for Michael Smith.

REYNOSO, Associate Justice.

Did the trial court err in granting a nonsuit on a negligence cause of action on the ground that the evidence showed the tortious conduct of defendant to have been intentional? In the context of the posture of the litigation we describe below we hold that it is not a defense to a negligence cause of action that the evidence supports a finding of greater culpability. It was therefore error for the trial court to grant a nonsuit. We reverse the judgment.

I

Defendant set a series of fires in the City of Woodland during the evening hours of October 7, 1974. First, at 7:45 p. m. he ignited a fire in the trash bin at a Value Giant, then 25 minutes later he set fire to the papers on a bulletin board at the post office. A few minutes thereafter papers and wood behind a shed near the Four Seasons Restaurant were set aflame by defendant. Finally, at 9:17, defendant set his last fire for the evening, the burning of a storage shed at Aunt Lila's antique shop.

This litigation arises from the fire at the Four Seasons Restaurant. Defendant was 16 years, 10 months of age at that time. He testified that he took some boards and leaned them over trash near a shed and then set fire to the trash. He got into a car and went around the block to a vantage point and observed that the roof of the shed was on fire. Defendant was surprised and scared when he saw that the roof of the shed was on fire, and he called the fire department so that the building would not burn down. ¹ Defendant proceeded to Aunt Lila's and set a storage shed on fire. Defendant subsequently plead guilty to arson. The corrugated steel material of which the shed at the Four Seasons was composed heated. The heating of the steel, in turn, set the contents of the shed on fire. The fire spread from the shed to the adjacent buildings. As the result of the spreading of the fire Emil and Edward Schmauderer (doing business as Emil's Quality Shoes) were damaged in the amount of $10,110. Theodore C. Muegge was damaged in the amount of $31,423.59. Jack Carter, Harold Sedgwick and Mary Burton (doing business as Burton's Shoes) were damaged in the amount of $131,036.

At the time of the fire plaintiff American Employers Insurance Company was the insurer of Emil's Quality Shoes and Theodore C. Muegge. Plaintiff First State Insurance Company was the insurer of Burton's Shoes. Pursuant to the contracts of insurance the plaintiffs paid to there respective insureds the total sums by which they were damaged due to the fire.

At the time of the fire, defendant's parents, Clyde R. and Margaret Smith, maintained a policy of homeowner's insurance with the United States Fidelity & Guaranty Company. Defendant, as a resident relative of the named insureds, was also insured by the policy. Under the policy United States Fidelity & Guaranty Company is obligated to pay to the insureds all sums they are required to pay to others by reason of liability imposed upon them as the result of damage to property, up to the policy limit of $25,000.

United States Fidelity & Guaranty Company believed that it was not obligated to indemnify or defend defendant since his acts were intentional. Accordingly, it filed a complaint for declaratory relief. The action for declaratory relief and the action by plaintiffs against Michael Smith were subsequently consolidated for trial.

All defendants who had been sued initially, other than Michael Smith, were dismissed from the action during pretrial proceedings. When the matter was set for trial plaintiffs dismissed all causes of action against Michael Smith except the negligence cause of action. The matter then proceeded to trial.

After plaintiffs rested defendant moved for a nonsuit on the ground that the evidence clearly showed that his tort was intentional and that evidence showing an intentional tort cannot support a verdict on a negligence cause of action. The trial court agreed and granted the motion. United States Fidelity & Guaranty Company then moved for dismissal of the declaratory relief action without prejudice, stating that in view of the nonsuit the declaratory relief action became moot. The dismissal was granted.

Plaintiffs filed a notice of appeal purporting to appeal from both the judgment of nonsuit and the dismissal of the declaratory relief action. United States Fidelity & Guaranty Company moved for an order dismissing the appeal as to it. On July 6, 1979, this court granted the motion and dismissed the appeal as moot, with the provision that the dismissal as to United States Fidelity & Guaranty would not affect the appeal as to Michael Smith. We are thus concerned only with the appeal involving the liability of Michael Smith.

II

A motion for nonsuit is the equivalent of a demurrer to the evidence; it concedes the truth of the facts proved but denies that they, as a matter of law, sustain the plaintiff's case. (4 Witkin, Cal.Procedure (2d ed. 1971) Trial, § 350, pp. 3149-3150.) On this review of a judgment of nonsuit we are thus required to determine whether the trial court was correct in ruling that, as a matter of law, plaintiff's evidence does not support a cause of action for negligence.

Generally, it is the plaintiff who argues that the evidence sustains the more grievous wrong while the defendant argues that the conduct is mere negligence. Decisional law has distinguished negligence from willful or intentional misconduct in that context. It is clear that plaintiffs do not desire a judgment for intentional or willful misconduct since such a judgment would preclude indemnification by defendant's insurer. Defendant, on the other hand, wishes to be found to have committed an intentional or willful wrong, since under that theory such a finding would preclude liability for negligence. No appellate decision has dealt with litigants in this posture. The decisional law is of questionable value.

Defendant's primary reliance, at trial and on appeal, is placed upon Donnelly v. Southern Pacific Co. (1941) 18 Cal.2d 863, 118 P.2d 465. In that case the plaintiff was injured in a train collision while traveling on a free pass provided to the spouses of the defendant's employees. The pass contained a provision that the defendant would not be liable under any circumstances for any injury incurred by the user of the pass. The evidence showed that the collision occurred when an employee improperly set a switch. The jury was instructed that the plaintiff could recover only for gross negligence. After a plaintiff's verdict the defendant appealed. The California Supreme Court noted that federal law applied and that under federal law a railroad could contract to release itself of liability for negligence, but not for willful and wanton negligence. It was thus necessary to determine what was meant by willful and wanton negligence.

In this connection the court explained: "Negligence is an unintentional tort, a failure to exercise the degree of care in a given situation that a reasonable man under similar circumstances would exercise to protect others from harm. (Citations.) A negligent person has no desire to cause the harm that results from his carelessness (citation), and he must be distinguished from a person guilty of willful misconduct, such as assault and battery, who intends to cause harm. (Citation.) Willfulness and negligence are contradictory terms. (Citations.) If conduct is negligent, it is not willful; if it is willful, it is not negligent. It is frequently difficult, however, to characterize conduct as willful or negligent. A tort having some of the characteristics of both negligence and willfulness occurs when a person with no intent to cause harm intentionally performs an act so unreasonable and dangerous that he knows, or should know, it is highly probable that harm will result. (Citations.) Such a tort has been labeled 'willful negligence,' 'wanton and willful negligence,' 'wanton and willful misconduct,' and even 'gross negligence.' It is most accurately designated as wanton and reckless misconduct." (Donnelly, supra, at p. 869, 118 P.2d at p. 468.) The court found no sufficient evidence of wanton and reckless misconduct, and thus reversed the judgment. (Id., at p. 872, 118 P.2d 465.)

The language used in the Donnelly decision appears to support defendant's contention. Nevertheless, it must be noted that the court was not concerned with the same issue which concerns us. The court in Donnelly was required to determine whether evidence which would support a finding of negligence, or even gross negligence, would also support a finding of willful and reckless misconduct. We deal with the reverse, whether evidence which would support a finding of willful and reckless misconduct or intentional wrongdoing could also support a finding of negligence.

Negligence has been variously defined and is, according to Prosser, one kind of conduct. (Prosser, Torts (4th ed. 1971) § 30, p. 143.) "Negligence is a matter of risk that...