Harper v. Wausau Ins. Co.

• Decision Date: 29 July 1997
• Docket Number: No. B107758,B107758
• Citation: 56 Cal.App.4th 1079,66 Cal.Rptr.2d 64
• Court: California Court of Appeals
• Parties: , 97 Cal. Daily Op. Serv. 6021, 97 Daily Journal D.A.R. 9861 Geneva HARPER, Plaintiff and Appellant, v. WAUSAU INSURANCE COMPANY, Defendant and Respondent.

Page 64

66 Cal.Rptr.2d 64

56 Cal.App.4th 1079, 97 Cal. Daily Op. Serv. 6021,

97 Daily Journal D.A.R. 9861

Geneva HARPER, Plaintiff and Appellant, v. WAUSAU INSURANCE COMPANY, Defendant and Respondent.

No. B107758.

Court of Appeal, Second District, Division 5, California.

July 29, 1997.

Certified for Partial Publication. ^*

Rehearing Denied Aug. 20, 1997.

Alan Finestone and Charles J. Fleishman, Beverly Hills, for Plaintiff and Appellant.

Zelle & Larson, Devera L. Petak, Los Angeles, for Defendant and Respondent.

TURNER, Presiding Justice.

I. INTRODUCTION

Plaintiff, Geneva Harper, appeals from a summary judgment in favor of defendant, Wausau Insurance Company (Wausau). The present case involves a complaint for breach of contract and of the implied covenant of good faith and fair dealing on the theory plaintiff was a third party beneficiary of a medical payment provision in an insurance contract between Nationwide Insurance Company, a Wausau company, and L.A. Towers, Inc. In the published portion of this opinion, we discuss the existence of a triable issue as to whether plaintiff was an intended third party beneficiary of the medical payment insurance policy who may directly assert a cause of action for breach of contract against the insurer. For the reasons stated below, we conclude a triable issue existed as to whether she was an intended beneficiary of the medical payment provision of the policy who may seek contract damages. On that ground, we reverse the judgment. ¹

II. BACKGROUND

The complaint, which was filed on August 22, 1995, alleged causes of action for breach of contract and the implied covenant of good faith and fair dealing based upon defendant's failure to pay plaintiff's medical expenses after she was injured in a slip and fall outside of L.A. City Tower, Inc. on April 16, 1993. The complaint alleged Wausau, in a written contract of insurance with L.A. City Tower, Inc., agreed to pay up to $5,000 of medical bills of anybody who was injured on the property owned by the insured. Plaintiff alleged she was a third party beneficiary of the insurance contract. She further alleged she and L.A. City Tower had fully performed under the contract, including reporting the losses and claims and paying the premiums. Wausau failed and refused to respond to plaintiff's demand for payment. Defendant answered the complaint and asserted a number of affirmative defenses including: (1) plaintiff was not an insured; (2) plaintiff lacked standing to bring the causes of action alleged in the complaint; and (3) plaintiff failed to perform all terms of the policy. Defendant subsequently moved for summary judgment or adjudication on the grounds plaintiff could not sue for breach of contract or the implied covenant of good faith and fair dealing because she was not a party to the insurance contract nor was she intended as a third party beneficiary. Further, a ground for the motion was that she failed to give proper notice pursuant to the terms of the policy.

In support of the motion, defendants presented and plaintiff did not dispute the following facts. She fell on April 16, 1993, at L.A. City Tower and 32nd Street Market in Los Angeles. Plaintiff filed an action to recover damages from her fall entitled Geneva Harper v. L.A. City Tower, Inc. (Super.Ct.L.A.County, 1993, No. BC083543). Nationwide Insurance Company (Nationwide), a Wausau company, issued a commercial general liability policy No. 73-04-PR50722690001 to L.A. City Tower, Inc. Pursuant to the coverage in Nationwide's policy, it defended L.A. City Tower, Inc. in the underlying action. A court trial of the underlying action resulted in judgment for the defense after the judge determined plaintiff failed to establish by a preponderance of the evidence that L.A. City Tower would have discovered the dangerous condition by the exercise of reasonable care.

L.A. City Tower was insured by Nationwide for "bodily injury and property damage liability" under "Coverage A". Plaintiff filed this action to recover benefits under the Nationwide policy under the "Coverage C" medical payment provision. The medical coverage provision states: "1. Insuring Agreement. [p] a. We will pay medical expenses as described below for 'bodily injury' caused by an accident: [p] (1) On premises you own or rent; [p] (2) On ways next to premises you own or rent; or [p] (3) Because of your operations; [p] provided that: [p] (1) The accident takes place in the 'coverage period' and during the policy period; [p] (2) The expenses are incurred and reported to us within one year of the date of the accident; and [p] (3) The injured person submits to examination, at our expense, by physicians of our choice as often as we may reasonably require. [p] b. We will make these payments regardless of fault. These payments will not exceed the applicable limit of insurance. We will pay reasonable expenses for: [p] (1) First aid at the time of the accident; [p] (2) Necessary medical, surgical, x-ray and dental services, including prosthetic devices; and (3) Necessary ambulance, hospital, professional nursing and funeral services." Excluded from the medical payment benefits under "Coverage C" were "any insured" persons. Section II defined "who is an insured" with respect to the conduct of the business, as individuals and their spouses, partnership or joint venture, its members and partners, an organization and its executive officers, directors and stockholders with respect to their duties and liabilities. Plaintiff requested payment from Nationwide under the medical payment provision for medical costs totaling $10,254.11. Plaintiff is not a named insured in the Nationwide policy. Plaintiff did not pay any premiums under the Nationwide policy.

The trial court granted the summary judgment motion. The trial court entered a judgment on the complaint from which this timely appeal followed.

III. DISCUSSION

A. Standard of Review

Summary judgment is granted when the moving party establishes that there are no triable issues of any material fact. A summary judgment motion is directed to the issues framed by the pleadings. (Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 673, 25 Cal.Rptr.2d 137, 863 P.2d 207; Addy v. Bliss & Glennon (1996) 44 Cal.App.4th 205, 215, 51 Cal.Rptr.2d 642; Hejmadi v. AMFAC, Inc. (1988) 202 Cal.App.3d 525, 536, 249 Cal.Rptr. 5.) Further, the moving party must establish he or she is entitled to entry of judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c); Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 579, 37 Cal.Rptr.2d 653.) A defendant proves a claim has no merit if he or she establishes one or more of the elements of the cause of action cannot be separately established. (Code Civ. Proc., § 437c, subd. (n)(1).) Code of Civil Procedure section 437c, subdivision (o)(2) provides: "For purposes of motions for summary judgment and summary adjudication: ... A defendant ... has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to that cause of action. Once the defendant ... has met that burden, the burden shifts to the plaintiff ... to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. The plaintiff ... may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto." An appellate court reviews the trial judge's decision to grant summary judgment de novo. (Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 487, 59 Cal.Rptr.2d 20, 926 P.2d 1114; Bernson v. Browning-Ferris Industries (1994) 7 Cal.4th 926, 929, 30 Cal.Rptr.2d 440, 873 P.2d 613.) The trial judge's stated reason for granting summary judgment is not binding on us because we review its ruling, not its rationale. (Szadolci v. Hollywood Park Operating Co. (1993) 14 Cal.App.4th 16, 19, 17 Cal.Rptr.2d 356; Barnett v. Delta Lines, Inc. (1982) 137 Cal.App.3d 674, 682, 187 Cal.Rptr. 219.)

The issue of whether plaintiff is entitled to the medical payment requires an interpretation of the insurance policy. The standard of review of an insurance policy has been described by the California Supreme Court as follows: "While insurance contracts have special features, they are still contracts to which the ordinary rules of contractual interpretation apply. (See AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 822, 274 Cal.Rptr. 820, 799 P.2d 1253[ ] (AIU ).) The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties. (Civ.Code, § 1636.) If contractual language is clear and explicit, it governs. (Civ.Code, § 1638.) On the other hand, '[i]f the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed, at the time of making it, that the promisee understood it.' (Id., § 1649; see AIU, supra, at p. 822, 274 Cal.Rptr. 820, 799 P.2d 1253.) This rule, as applied to a promise of coverage in an insurance policy, protects not the subjective beliefs of the insurer but, rather, 'the objectively reasonable expectations of the insured.' (AIU, supra, at p. 822, 274 Cal.Rptr. 820, 799 P.2d 1253.) Only if this rule does not resolve the ambiguity do we then resolve it against the insurer. (See AIU, supra, at p. 822, 274 Cal.Rptr. 820, 799 P.2d 1253.) [p] In summary, a court that is faced with an argument for coverage based on assertedly ambiguous policy language must first attempt to determine whether coverage is consistent with the insured's objectively reasonable expectations. In so doing, the court must interpret the language in context, with regard...