Globe Indem. Co. v. State of California

• Decision Date: 06 December 1974
• Citation: 43 Cal.App.3d 745,118 Cal.Rptr. 75
• Court: California Court of Appeals Court of Appeals
• Parties: GLOBE INDEMNITY COMPANY, Plaintiff and Appellant, v. The PEOPLE et al., Defendants and Respondents. Civ. 2192.

Page 75

118 Cal.Rptr. 75

43 Cal.App.3d 745

GLOBE INDEMNITY COMPANY, Plaintiff and Appellant, v. The PEOPLE et al., Defendants and Respondents.

Civ. 2192.

Court of Appeal, Fifth District, California.

Dec. 6, 1974.

Noriega, Clifford, Jenkins, Stanton & Brown and Thomas M. Stanton, Bakersfield, for appellant.

Evelle J. Younger, Atty. Gen., Carl Boronkay, Asst. Atty. Gen., R. H. Connett, Deputy Atty. Gen., Sacramento, Gordon A. Drescher, Wasco, and Alfred G. Mortimore, Shafter, for respondents.

OPINION

THOMPSON, ^* Associate Justice.

Plaintiff Globe Indemnity Company, hereinafter referred to as Globe Indemnity, appeals from a judgment decreeing that by virtue of certain policies of insurance it issued it will become obligated to satisfy any money judgment, to the extent of the limits of the policies, defendant State of California, hereinafter referred to as State, obtains against defendants Floyd Wheat, Wilkinson & Company, Lloyd Eddings and Elzy Weaver, hereinafter referred to as insureds, for fire suppression costs.

The situation in which the present case has its genesis is novel from both a factual and legal stance. On July 30, 1969, as the result of the alleged negligence of the insureds, a fire was kindled by the insureds and was permitted to spread to adjoining property not owned by the insureds. On October 26, 1970, the State, pursuant to section 13009 of the Health and Safety Code, brought suit in Kings County seeking to recover from the insureds the fire suppression costs incurred by the State in controlling the fire. ¹ Globe Indemnity, which had issued both comprehensive personal insurance and comprehensive general liability insurance policies to Floyd Wheat and Wilkinson & Company, brought the present declaratory relief action in Kern County to determine whether the fire suppression costs claimed by the State were covered by either policy issued by Globe Indemnity.

The trial court, after appropriate findings of fact, entered judgment against Globe Indemnity decreeing that the policies extended coverage to the risk attendant to fire suppression costs incurred by the State.

Globe Indemnity appeals on what it essentially a judgment roll appeal, no reporter's transcript being furnished. Portions of the policies in question were attached as exhibits to the complaint; the existence of the policies was denied by the State on information and belief but was admitted by the insureds. Inasmuch as the record before us, taken in its entirety, furnishes us with sufficient information to consider certain portions of the case on its merits, we shall do so.

The crucial language in each of the two policies, deleting immaterial matters, is set forth in the court's findings of fact as follows:

The Comprehensive General Liability Insurance policy:

'The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of . . . bodily injury or . . . property damage to which this insurance applies, caused by an occurrence, . . .'

The Comprehensive Personal Insurance policy:

'The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies, caused by an occurrence, . . .'

We make these preliminary observations. It clearly appears that the word 'occurrence' as used in both policies would include the fire which allegedly was kindled and was permitted to spread to adjoining property as a result of the negligence of the insureds. Upon this premise, Globe Indemnity would have been liable for the damage to the adjoining property; it is not contended otherwise.

In the present case, the constitutionality of section 13009 of the Health and Safety Code is not in question. (See County of Ventura v. So. Cal. Edison Co., 85 Cal.App.2d 529, 533--540, 193 P.2d 512.) Nor do the parties argue that the fire did not escape to property belonging to others. (See People v. Williams, 222 Cal.App.2d 152, 154--155, 34 Cal.Rptr. 806.) We further conclude that absent any statute, one protecting his own property has the right to recover fire suppression costs from the wrongdoer. (People v. Wilson, 240 Cal.App.2d 574, 576, 49 Cal.Rptr. 792; see United States v. Chesapeake & O. Ry. Co. (4th Cir.) 130 F.2d 308, 310.) Under the authority of People v. Zegras, 29 Cal.2d 67, 68--69, 172 P.2d 883, it is equally clear that section 13009 of the Health and Safety Code merely provides a method whereby fire suppression costs might be recovered, which is governed by the procedure applicable to a suit upon a contract, express or implied, and does not constitute a declaration that the recovery sounds in contract instead of tort.

With these observations in mind, we shall examine the provisions of the policies in question. Since there is no significant difference in the language of the policies as they apply to this case, we shall consider them as one.

The trial court found that the sum claimed by the State for fire suppression costs was covered by the policies of insurance issued by Globe Indemnity. We are not bound by such a trial finding inasmuch as the issue in this case turns upon the interpretation of a written contract without the aid of any conflicting extrinsic evidence. (Parsons v. Bristol Development Co., 62 Cal.2d 861, 865, 44 Cal.Rptr. 767, 402 P.2d 839; Moss Dev. Co. v. Geary, 41 Cal.App.3d 1, 8--9, 115 Cal.Rptr. 736.) Nevertheless, we believe that the trial court's interpretation is correct.

It is undisputable that contracts of insurance are subject to well defined rules of construction. These are set forth in numerous appellate decisions, and we cite from State Farm Mut. Auto. Ins. Co. v. Johnston, 9 Cal.3d 270, 274, 107 Cal.Rptr. 149, 151, 507 P.2d 1357, 1359:

'As said in Continental Cas. Co. v. Phoenix Constr. Co., 46 Cal.2d 423, at pages 437--438, 296 P.2d 801 at page 809 (57 A.L.R.2d 914): 'It is elementary in insurance law that any ambiguity or uncertainty in an insurance policy is to be resolved against the insurer. (Citations.) If semantically permissible, the contract will be given such construction as will fairly achieve its object of securing indemnity to the insured for the losses to which the insurance relates. (Citation.) If the insurer uses language which is uncertain any reasonable doubt will be resolved against it; if the Doubt relates to extent or Fact of coverage, whether as to peril insured against (citations), the amount of liability (citations) or the person or persons protected (citations), The language will be understood in its most inclusive sense, for the benefit of the insured.' (Italics added.)'

The record discloses that the policies of insurance in this case were standard insurance policies meeting every test of contracts of adhesion. (Kessler, Contracts of Adhesion (1943), 43 Colum.L.Rev. 629, 637.) Contracts of adhesion require careful scrutiny as to the existence of any ambiguity, and if an ambiguity is found it must be resolved in favor of the insured. (Gray v. Zurich Insurance Co., 65 Cal.2d 263, 269--271, 54 Cal.Rptr. 104, 419 P.2d 168; Schmidt v. Pacific Mut. Life Ins. Co., 268 Cal.App.2d 735, 737--738, 74 Cal.Rptr. 367.) We find such an ambiguity here. The policies state that the insurer will pay 'all sums which the insured shall become legally obligated to pay as damages because of' property damage caused by an occurrence. Undoubtedly, the fire itself would be an 'occurrence' within the meaning of the policies.

In insurance policies containing substantially similar language to that contained in the policies in the present case the California Supreme Court has said the word 'property' refers to physical or tangible property. (Hogan v. Midland National Ins. Co., 3 Cal.3d 553, 562, 91 Cal.Rptr. 153, 476 P.2d 825; Geddes & Smith, Inc. v. St. Paul Mercury Indem. Co., 63 Cal.2d 602, 604, 609, 47 Cal.Rptr. 564, 407 P.2d 868; Geddes & Smith, Inc. v. St. Paul Mercury Indemnity Co., 51 Cal.2d 558, 565--566, 334 P.2d 881.) The question becomes whether it is 'semantically permissible to say fire suppression costs collectible under section 13009 of the Health and Safety Code are sums the insureds became legally obligated to pay Because of damage to tangible property.

At the time of the fire in question, one only became liable under section 13009 of the Health and Safety Code for fire suppression costs if the fire escaped to property belonging to others and caused damage thereto. (Health & Saf.Code, §§ 13007, 13008, 13009; People v. Williams, Supra, 222 Cal.App.2d 152, 155, 34 Cal.Rptr. 806.)

The trial court found that the fire in question escaped to property belonging to others and, in essence, that most, if not all, of the property destroyed by the fire was tangible in character. The court also found that all of the costs incurred by the State in suppressing the fire were expended to prevent further damage to tangible property, including tangible property belonging to the State. On a judgment roll appeal, these findings are not subject to challenge, it being presumed that the evidence supports the findings. (Associated Creditors' Agency v. Dunning Floor Covering, Inc.,265 Cal.App.2d 558, 559, 71 Cal.Rptr. 494.)

We note that the policies in the present case extend coverage 'to all sums which the insureds become legally obligated to pay as damages because of' property damage, and the coverage is not limited solely to damages to property.

Since liability for fire suppression costs under section 13009 of the Health and Safety Code can arise only if the fire causes Damage to property belonging to others, since most, if not all, of the property belonging to others damaged by the fire was tangible in character, and since all of the fire suppression costs in question were expended to prevent further damage to tangible property, it can be said that the insureds became legally obligated to pay these fire suppression...