Golden Eagle Ins. Co. v. Foremost Ins. Co.

• Citation: 25 Cal.Rptr.2d 242,20 Cal.App.4th 1372
• Decision Date: 09 December 1993
• Docket Number: No. B067000,B067000
• Court: California Court of Appeals
• Parties: GOLDEN EAGLE INSURANCE COMPANY, Plaintiff, Appellant and Respondent, v. FOREMOST INSURANCE COMPANY, Defendant, Respondent and Cross-Respondent, Anton Berkovich and Cynthia Berkovich, Defendants, Respondents and Cross-Appellants.

Page 242

25 Cal.Rptr.2d 242

20 Cal.App.4th 1372

GOLDEN EAGLE INSURANCE COMPANY, Plaintiff, Appellant and Respondent, v. FOREMOST INSURANCE COMPANY, Defendant, Respondent and Cross-Respondent Anton Berkovich and Cynthia Berkovich, Defendants, Respondents and Cross-Appellants.

No. B067000.

Court of Appeal, Second District, Division 7, California.

Dec. 9, 1993.

As Modified on Denial of Rehearing Jan. 7, 1994.

Review Denied March 17, 1994.

Bolton, Dunn & Yates and James T. Hudson and Kathryn A. Ruston, Santa Monica, for plaintiff and appellant.

Lewis, D'Amato, Brisbois & Bisgaard and Raul L. Martinez, Los Angeles, for defendant and respondent Foremost Ins. Co.

Pillsbury, Madison & Sutro and Michael H. Salinsky and Jeffrey A. Rich, San Francisco, for respondents and cross-appellants Anton and Cynthia Berkovich.

JOHNSON, Associate Justice.

Following settlement of a lawsuit against its insureds, Anton and Cynthia Berkovich, Golden Eagle Insurance Company initiated this action against the Berkoviches and Foremost Insurance Company for equitable contribution and subrogation. The Berkoviches filed a cross-complaint seeking reimbursement from Foremost for the amount they contributed to the settlement of the underlying suit and reimbursement for attorneys fees from Foremost and Golden Eagle. The matter was tried to the court, which entered a judgment denying the claims of all parties. For the reasons explained below, we affirm in part and reverse in part.

FACTS AND PROCEEDINGS BELOW

A. The Underlying Litigation

In July 1986 the Berkoviches purchased a mobile home park from the Williamsons. In February 1989 the Berkoviches and the Williamsons were sued by 160 tenants seeking damages arising out of alleged improper maintenance of the facilities and grounds at the park. The complaint alleged the defendants' neglect occurred continuously during the previous four years and was continuing.

The Williamsons tendered defense of the action to Foremost and the Berkoviches tendered defense to Foremost and Golden Eagle. Foremost and Golden Eagle accepted the Berkoviches' defense without reservation of rights.

Subsequently, without the Berkoviches' consent, Golden Eagle negotiated a settlement with the tenants for the sum of $4.25 million. Under the terms of the settlement Golden Eagle contributed $3 million; Foremost contributed $1 million; the Berkoviches were required to contribute $250 thousand. The settlement agreement preserved Golden Eagle's rights to dispute coverage for the period March 4, 1989, to March 4, 1990, and to seek contribution and subrogation from Foremost and the Berkoviches. Over the Berkoviches' objections, the trial court approved the settlement as a good faith settlement under Code of Civil Procedure section 877.6.

B. The Foremost Policies

The facts relating to the Foremost policies are discussed more fully below. Briefly, at the time the Williamsons sold the mobile home park to the Berkoviches the Williamsons had an insurance policy with Foremost covering claims of the park tenants for loss due to bodily injury, property damage and certain other occurrences. This policy was endorsed over to the Berkoviches effective June 30, 1986. The limit of liability under this policy was $1 million. This policy expired October 1, 1986.

On October 17, 1986, Foremost's agent, the Brian Holmes Insurance Agency, sent the Berkoviches a "Certificate of Insurance" showing renewal of the policy for the period October 1, 1986, to October 1, 1987. The certificate of insurance was accompanied by a bill for a premium deposit. The Berkoviches never paid any part of this bill and, in December 1986, Foremost issued a notice of cancellation based on "nonpayment of premium."

C. The Golden Eagle Policies

Following cancellation of the Foremost policy, the Berkoviches obtained similar coverage with the same $1 million policy limit from Golden Eagle. The first Golden Eagle policy was effective from March 4, 1987, to March 4, 1988. The policy was renewed on an annual basis on March 4, 1988, and March 4, 1989. The March 4, 1989, renewal occurred after the Berkoviches were served with the complaint in the park tenants' suit.

D. The Berkoviches' Cross-Complaint Against Foremost and Golden Eagle

The Berkoviches' coverage claim against Foremost is based on the same facts relating to the Foremost policies briefly discussed above and discussed more fully infra. Essentially, the Berkoviches contend the endorsement on the Williamsons' policy created, in effect, a new policy with a $1 million limit separate and apart from the $1 million limit applicable to the Williamsons. They further contend the renewal policy was in full force and effect from October 1, 1986, until it was cancelled effective December 29, 1986. Thus, Foremost's exposure under its policies is $3 million rather than the $1 million it contributed to the settlement.

The Berkoviches also contend the settlement proposed by Golden Eagle and Foremost created a conflict of interest between the insurers and the Berkoviches entitling the Berkoviches to retain independent counsel at the insurers' expense. The conflict of interest arose from the insurers' seeking court approval of a proposed settlement which would exhaust their policy limits, require contribution from the Berkoviches and leave the Berkoviches without coverage for claims which might later be made by tenants who did not join in the underlying lawsuit.

E. Proceedings Below

Trial of the action was based primarily on stipulated facts and exhibits. The court found in favor of the defendants on Golden Eagle's complaint for equitable contribution and subrogation and in favor of the cross-defendants on the Berkoviches' cross-complaint for indemnification and attorney fees. Golden Eagle filed a request for a statement of decision and a proposed statement of decision. The court adopted its tentative ruling as its statement of decision and entered judgment accordingly. Golden Eagle and the Berkoviches filed timely appeals.

DISCUSSION

I. GOLDEN EAGLE WAIVED ANY DEFECTS IN THE STATEMENT OF DECISION BY FAILING TO OBJECT IN THE TRIAL COURT.

Golden Eagle filed a timely request for a statement of decision under Code of Civil Procedure section 632 outlining 36 issues it claimed were in controversy. On February 10, 1992, it served its proposed 42 paragraph statement of decision on the other parties. The record does not reflect whether or when this proposed statement of decision was filed with the trial court. In any event, on February On appeal, Golden Eagle contends the court's statement of decision failed to resolve many of the controverted issues in the case and, therefore, we should remand the matter for a trial de novo on the omitted issues or, alternatively, we should not infer the trial court decided those issues in favor of Foremost and the Berkoviches. (Code Civ.Proc., § 634.)

11, 1992, the trial court adopted its tentative decision as its statement of decision.

Based on our review of the record, we believe the statement of decision adequately covered the principal controverted issues at trial. The trial court is not required to respond point by point to the issues posed in a request for statement of decision. The court's statement of decision is sufficient if it fairly discloses the court's determination as to the ultimate facts and material issues in the case. (People v. Casa Blanca Convalescent Homes, Inc. (1984) 159 Cal.App.3d 509, 525, 206 Cal.Rptr. 164; Republic Indemnity Co. v. Empire Builders Corp. (1985) 167 Cal.App.3d 1163, 1167, 213 Cal.Rptr. 787.)

Furthermore, Golden Eagle waived any defects in the statement of decision by failing to file timely objections. Golden Eagle contends its proposed statement of decision served to bring the alleged defects in the trial court's statement of decision to the court's attention. We disagree.

Under Code of Civil Procedure section 634, a party claiming deficiencies in the trial court's statement of decision must bring those deficiencies "to the attention of the trial court...." While it is true this section "does not specify the particular means that the party may use to direct the court's attention to the claimed defects in the statement," (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1134, 275 Cal.Rptr. 797, 800 P.2d 1227), rule 232, subdivision (d) of the California Rules of Court provides:

"Any party affected by the judgment may, within 15 days after the proposed statement of decision and judgment have been served, serve and file objections to the proposed statement of decision or judgment."

Code of Civil Procedure section 634 and California Rules of Court 232, taken together, clearly contemplate any defects in the trial court's statement of decision must be brought to the court's attention through specific objections to the statement itself, not through a proposed alternative statement of decision served prior to the court's issuance of its own statement. By filing specific objections to the court's statement of decision a party pinpoints alleged deficiencies in the statement and allows the court to focus on the facts or issues the party contends were not resolved or whose resolution is ambiguous. A proposed alternative statement of decision, such as the one filed by Golden Eagle, does not serve these functions and does not satisfy the requirements of Code of Civil Procedure section 634 and California Rules of Court 232.

II. TRANSFER OF THE FOREMOST POLICY FROM THE WILLIAMSONS TO THE BERKOVICHES DID NOT INCREASE THE POLICY LIMIT BY AN ADDITIONAL $1 MILLION.

Golden Eagle and the Berkoviches assert the transfer of coverage under the existing Foremost policy from the Williamsons to the Berkoviches created a separate $1 million liability limit under the policy in favor of the Berkoviches. As the trial court correctly found, there is no basis in fact or law for this contention.

At the time the Berkoviches purchased the mobile home park from the...