Continental Ins. Co. v. Lexington Ins. Co.
Decision Date | 20 May 1997 |
Docket Number | No. B094351,B094351 |
Citation | 55 Cal.App.4th 637,64 Cal.Rptr.2d 116 |
Court | California Court of Appeals Court of Appeals |
Parties | , 97 Cal. Daily Op. Serv. 4262, 97 Daily Journal D.A.R. 7093 CONTINENTAL INSURANCE COMPANY, Plaintiff and Appellant, v. LEXINGTON INSURANCE COMPANY, Defendant and Respondent. |
Gray, York, Duffy & Rattet, Gary S. Gray, and Frank J. Ozello, Encino, for Plaintiff and Appellant.
Hollins, Schechter & Feinstein and Kenneth C. Jones, Orange, for Defendant and Respondent.
This appeal arises out of an insurance coverage dispute between plaintiff and appellant Continental Insurance Company ("Continental") and defendant and respondent Lexington Insurance Company ("Lexington"). Continental appeals from a judgment of dismissal entered after a demurrer was sustained without leave to amend to its complaint for equitable indemnity, contribution, and declaratory relief against Lexington. We affirm the judgment.
This insurance coverage dispute arose out of a catastrophic, multi-vehicle traffic accident which occurred in January 1992. The accident was allegedly caused by the driver of a tractor/trailer rig, Inocencio Contreras. Contreras was acting as agent of Southern California Motor Delivery, Inc. ("SCMD"), the lessee of the tractor/trailer rig. American Presidents Lines, Ltd. ("APL") was the lessor of the trailer portion of the rig; Ruan Leasing Company ("Ruan") was the lessor of the tractor portion, or "power unit," of the rig.
Continental issued a liability insurance policy, described in more detail below, to APL. Defendant Planet Insurance Company ("Planet") issued a liability insurance policy to Ruan. 1 Lexington issued an umbrella liability insurance policy, also described below, to Ruan, in which the Planet insurance policy was specified as underlying insurance.
A settlement of the personal injury and wrongful death lawsuit arising out of the accident was reached, whereby Continental paid $750,000, Planet paid $50,000, and Lexington paid $630,250. The total amount of the settlement was $6,900,500, with other insurers and the State of California contributing as well.
We note that in this appeal, we are called upon to determine the proper interpretation of statutes and their application to undisputed facts, as well as to determine the proper interpretation of insurance policies. These matters are subject to our independent review. (International Engine Parts, Inc. v. Feddersen & Co. (1995) 9 Cal.4th 606, 611, 38 Cal.Rptr.2d 150, 888 P.2d 1279; Alex Robertson Co. v. Imperial Casualty & Indemnity Co. (1992) 8 Cal.App.4th 338, 343, 10 Cal.Rptr.2d 165.)
Insurance Code sections 11580.8 and 11580.9 2 were enacted for the purpose of resolving, so far as possible, conflicts and litigation over which of two or more applicable policies providing automobile liability insurance are to be deemed primary or excess. The statute, where applicable, makes a definitive imposition of primary and/or excess liability on insurers in given situations. (Hartford Accident & Indemnity Co. v. Sequoia Ins. Co. (1989) 211 Cal.App.3d 1285, 1296-1297, 260 Cal.Rptr. 190.) We therefore turn first to a consideration of whether the statutory provisions are applicable.
Section 11580.8 provides as follows:
The parties argue that subdivision (b) of section 11580.9 is potentially applicable. It provides that
We find, however, that subdivision (b) is not applicable. It provides for the ordering of coverage only as between policies such as those issued by Continental and Lexington to named insureds in the business of leasing motor vehicles without operators (such as APL and Ruan), which policies afford coverage to persons other than the named insureds (in this case SCMD and Contreras), on the one hand, and on the other hand, policies (in this case apparently issued by Generalli and Providence/Washington) covering the persons (SCMD and Contreras) as named or additional insureds. Subdivision (b) does not address the ordering of coverage as between two policies whose named insureds are engaged in the business of leasing motor vehicles without operators, which policies afford coverage to persons other than the named insured.
Appellant also urges the potential applicability of section 11580.9, subdivision (d), which provides that "Except as provided in Appellant argues that However, it is clear that only page 3 of the policy is missing. Form "LEX-OCC-UMB-1T," dated "12/90," is in fact the basic insuring agreement, set forth at pages 160 to 170 of the clerk's transcript, from which page 3 is missing. The "LEXCCUMBS" form, also titled "SCH OF UNDERLYING INS-OCC UMB," dated "6/89," appears on page 159 of the clerk's transcript. A review of the policy does not indicate, and appellant does not specifically contend, that any other portion of the policy is missing.
subdivisions (a), (b), and (c), where two or more policies affording valid and collectible liability insurance apply to the same motor vehicle or vehicles in an occurrence out of which a liability loss shall arise, it shall be conclusively presumed that the insurance afforded by that policy in which the motor vehicle is described or rated as an owned automobile shall be primary and the insurance afforded by any other policy or policies shall be excess." Appellant argues that the applicability of subdivision (d) cannot be determined at the pleading stage, and that discovery is required to determine whether the Lexington policy describes or rates as an owned automobile the motor vehicle involved in the underlying accident, particularly since the Lexington policy is incomplete
As only page 3, which obviously contains definitions relating to terms used in the policy, is missing, we can conclude that the policy does not describe or rate as an owned automobile the motor vehicle involved in the underlying accident, or any other motor vehicle. Instead, the policy affords coverage to "persons insured," defined at pages 4 and 5 of the policy, which includes permissive users of autos owned by the insured or hired for use on the insured's behalf. (Emphasis added.) (See Hartford Accident & Indemnity Co. v. Sequoia Ins. Co., supra, 211 Cal.App.3d at p. 1301, 260 Cal.Rptr. 190 [] .) As such, it is evident, and we conclude as a matter of law based on our interpretation of the policy at issue, that section 11580.9, subdivision (d), does not apply. The trial court did not err in sustaining respondent's demurrer in this regard, because discovery was not necessary to definitively determine the inapplicability of the Insurance...
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