Carroll v. Hanover Ins. Co.

• Decision Date: 25 September 1968
• Citation: 71 Cal.Rptr. 868,266 Cal.App.2d 47
• Court: California Court of Appeals Court of Appeals
• Parties: M. Frank CARROLL, Plaintiff and Appellant, v. HANOVER INSURANCE COMPANY, a corporation, Defendant and Respondent. Civ. 24902.

Page 868

71 Cal.Rptr. 868

266 Cal.App.2d 47

M. Frank CARROLL, Plaintiff and Appellant, v. HANOVER INSURANCE COMPANY, a corporation, Defendant and Respondent.

Civ. 24902.

Court of Appeal, First District, Division 3, California.

Sept. 25, 1968.

Hearing Denied Nov. 20, 1968.

Sandell, Carter & Hull, Harold D. Sandell, Fresno, for appellant.

Sedgwick, Detert, Moran & Arnold, George E. Sayre, San Francisco, for respondent.

SALSMAN, Associate Justice.

The plaintiff-appellant M. Frank Carroll brought this action against the defendant-respondent Hanover Insurance Company to recover attorney's fees alleged to be due him under a policy of insurance issued by Hanover. The superior court sustained Hanover's demurrer to the complaint, without leave to amend. The notice of appeal states that the appeal is taken from the order sustaining the demurrer, but no appeal lies from such an order. (Kennedy v. Owen, 85 Cal.App.2d 517, 193 P.2d 141, and cases cited; 3 Witkin, Cal.Procedure, Appeal, § 19, p. 2162.) Such an order contemplates the later entry of a judgment of dismissal, and the appeal properly lies only from the judgment. We mentioned this to counsel at oral argument, having in mind the possibility of our lack of jurisdiction to hear the appeal. (Vibert v. Berger, 64 Cal.2d 65, 67, 48 Cal.Rptr. 886, 410 P.2d 390 and cases cited.) Counsel thereupon stipulated that before submission of the cause, a judgment might be entered in the superior court. Accordingly, such a judgment was entered nunc pro tunc as of April 18, 1967. Our record has now been augumented with a copy of the stipulation of counsel and a certified copy of the judgment. After receipt of these documents we ordered the cause submitted. We deem the notice of appeal as being filed after entry of judgment and elect to treat the appeal as regularly before us on the merits. (Cal. Rules of Court, Rule 31(a).)

Appellant's complaint alleged in substance that respondent issued a policy of inurance to appellant's employer; that the policy included uninsured motorist coverage; that appellant was an additional insured under the policy; that the policy expressly provided that 'With respect to such insurance as is afforded by this policy, the company shall: * * * reimburse the insured for all reasonable expenses, other than loss of earnings, incurred at the company's request; * * *' The complaint then alleges that while using the vehicle covered by the policy appellant was involved in an accident with a hit and run automobile, and thereafter demanded of Hanover that appellant's claim for damages be submitted to arbitration, under the provisions of the uninsured motorist coverage of the policy; that Hanover denied that any coverage existed and thereupon filed an action against appellant, seeking declaratory relief; that appellant was served with summons and complaint, answered and defended against the action, and in doing so necessarily employed an attorney to protect his legal rights; that upon trial of the declaratory relief action judgment was entered in appellant's favor, which judgment was affirmed on appeal. That, in defending against Hanover's action, appellant expended $5,470.89 in costs and attorney's fees, all of which Hanover has refused to pay.

When a court makes an order sustaining a demurrer without leave to amend, the question on appeal is simply whether the court, in making the order, has abused its discretion. Here, appellant made no request in the trial court for permission to amend his complaint, but under the provisions of Code of Civil Procedure section 472c such a request was unnecessary, and the question of abuse of discretion remains. (Wennerholm v. Stanford Univ. Sch. of Med., 20 Cal.2d 713, 718--720, 128 P.2d 522, 141 A.L.R. 1358.) On appeal, however, appellant makes no suggestion to us that, given an opportunity, he can amend his complaint to state a cause of action. Rather, he takes the position that the complaint, as framed, states a cause of action and that therefore Hanover's demurrer should have been overruled. We disagree.

The complaint alleges that Hanover's policy provided that Hanover will reimburse its insured '* * * for all reasonable expenses, other than loss of earnings, incurred at the company's request. * * *' Appellant argues that, since Hanover initiated the declaratory relief action against him, his costs and expenses incurred in defense of that action were expenses '* * * incurred at the company's request * * *.' Appellant cites and relies upon Standard Accident Insurance Co. of Detroit v. Hull, D.C., 91 F.Supp. 65, in which the trial court, interpreting identical language to that contained in Hanover's policy, concluded that attorney's fees incurred by an insured in defending against the insurer's declaratory relief action were expenses incurred at the company's request, and for which the company was liable under the terms of the policy. But, as respondent points out in its brief, higher federal courts have refused to follow Standard's lead, and have disapproved its holding. (See Milwaukee Mechanic's Ins. Co. v. Davis, 5 Cir., 198 F.2d 441 and Tillman v. Great American Indemnity Co. of New York, 7 Cir., 207 F.2d 588.) In Clark v. Exchange Insurance Association, 276 Ala. 334, 161 So.2d 817, a state court also differed from Standard's rule.

As a general rule, in the absence of some statutory right or contractual provision, attorney's fees are to be paid by the party employing the attorney. (Code Civ.Proc. § 1021; Prentice v. North Amer. Title Guar. Corp., 59 Cal.2d 618, 620...