Hausmann v. Farmers Ins. Exchange

• Decision Date: 06 March 1963
• Citation: 213 Cal.App.2d 611,29 Cal.Rptr. 75
• Court: California Court of Appeals Court of Appeals
• Parties: Erich HAUSMANN and Marie Hausmann, husband and wife, Harold Hausmann, a Minor, by Erich Hausmann, his Guardian Ad Litem, Plaintiffs and Respondents, v. FARMERS INSURANCE EXCHANGE, an-Interinsurance Exchange, Plaintiff in Intervention and Appellant. Civ. 26860.

Page 75

29 Cal.Rptr. 75

213 Cal.App.2d 611

Erich HAUSMANN and Marie Hausmann, husband and wife, Harold Hausmann, a Minor, by Erich Hausmann, his Guardian Ad Litem, Plaintiffs and Respondents, v. FARMERS INSURANCE EXCHANGE, an-Interinsurance Exchange, Plaintiff in Intervention and Appellant.

Civ. 26860.

District Court of Appeal, Second District, Division 1, California.

March 6, 1963.

Early, Maslach, Foran & Williams, and Harry Boyd, Los Angeles, for appellant.

Louis A. Audet, Los Angeles, for respondents.

LILLIE, Justice.

Leave of court having been granted ex parte, Farmers Insurance Exchange filed its complaint in intervention some three months after its insured, Mr. Hausmann, had instituted an action against the defendants Gattenio for personal injuries to himself and his family as well as property damage to his automobile. An answer to Farmers' pleading was filed by the Gattenios. The Hausmanns, however, demurred to the complaint in intervention upon the ground that no cause of action was therein stated; they also moved to strike the proposed pleading. The demurrer was sustained without leave to amend and the motion went off calendar. Farmers has appealed from the ensuing judgment of dismissal.

This appeal follows a summary denial by this court of Farmers' petition for a writ directing the trial court to vacate its order of dismissal (No. 26468), and the denial of a hearing by the Supreme Court. Contrary to the Hausmanns' contentions, such denial of the writ does not operate res judicata in future proceedings. (Pease v. City of San Diego, 93 Cal.App.2d 706, 712, 209 P.2d 843.) Accordingly, we shall not allude further to his point since the governing rule is now well settled.

The facts which are said to warrant intervention by Farmers are alleged in its complaint. After reference to the automobile collision in question and the defendants' claimed negligence, it is alleged that as a proximate result thereof the Hausmann car was damaged and depreciated so that the reasonable cost of repair and tow charges was $1,107.82. Prior to the above occurrences, the complaint continues, Farmers had issued its policy agreeing to indemnify Mr. Hausmann against loss or damages by collision subject to a $50.00 deductible provision; said policy being in full force and effect, Farmers was obligated to pay and did pay to Citroen Cars Corporation the sum of $1,057.92 for repairing the subject vehicle. The complaint concludes with the allegation that 'pursuant to the aforementioned contract of insurance and by reason of said payment, plaintiff in intervention became entitled to be subrogated to all rights of said assured * * * against defendants to the extent of $1,057.92 * * *.'

Although the rule at common law was otherwise, in this jurisdiction it is no longer required that an action be instituted by the real party in interest; accordingly, one claiming subrogation to a legal cause of action is now permitted to sue in his own name. (Offer v. Superior Court, 194 Cal. 114, 228 P. 11; Authomobile Ins. Co. of Hartford, Conn. v. Union Oil Co., 85 Cal.App.2d 302, 193 P.2d 48.) The same principle applies where the subrogation is only partial; 'e. g., an insurer may pay only part of the loss, and both the insurer (subrogee) and the insured (subrogor) will have claims against the party liable.' (2 Witkin Cal.Proc., p. 1034.) The textwriter further observes: 'In principle the situation is identical with that resulting from a partial assignment. And the same reasoning which allows both the partial assignor and partial assignee to sue by joining each other * * * should support an action by either the partial subrogee and partial subrogor with such joinder.' (ibid, p. 1034.)

On the face of its pleading, says Farmers, it is a partial subrogee; therefore, if it had the right to join with its insured in such capacity, it certainly had the right to intervene. The governing statute reads in part as follows: 'At any time before trial, any person, who has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both, may intervene in the action or proceeding. An intervention takes place when a third person is permitted to become a party to an action or proceeding between other persons, either by joining the plaintiff in claiming what is sought by the complaint, or by uniting with the defendant in resisting the claims of the plaintiff, or by demanding anything adversely to both the plaintiff and the defendant * * *.' (Code Civ.Proc. § 387.) Following service of the complaint upon the attorneys for the parties who have appeared, the latter 'may answer or demur to it' within a prescribed time. (Code of Civ.Proc. § 387.)

The right to intervene is not an absolute one; it is permitted when the third party shows an 'interest' under existing pleadings and issues which satisfies the requirements of the statute. (Muller v. Robinson, 174 Cal.App.2d 511, 345 P.2d 25.) The 'interest,' it has been said, must be of such direct or immediate character that the intervener will either gain or lose by the direct legal operation and effect of the judgment. (People ex rel. State Lands Commission v. City of Long Beach, 183 Cal.App.2d 271, 6 Cal.Rptr. 658.) If the complaint in question establishes it to be a partial subrogee, Farmers would seem to belong in the above category; and since the purposes of intervention are to protect the interests of those who may be affected by the judgment (Voyce v. Superior Court, 20 Cal.2d 479, 127 P.2d 536), the objectives of the statute might well be satisfied by the intervention presently sought.

But the cases also hold that the 'interest' which entitles a party to intervene must be in the matter in litigation in the suit as originally brought (People v. Brophy, 49 Cal.App.2d 15, 120 P.2d 946; Jersey Maid Milk Products Co. v. Brock, 13 Cal.2d 620, 664-665, 91 P.2d 577.) Although the Hausmann action was filed on January 17, 1962, the complaint in intervention contains no allegation that on or prior to that date payment had been made to Citroen Cars Corporation pursuant to the subject contract of insurance. The doctrine of subrogation does not contemplate that a person who has a prospective right of subrogation may require, in advance of actually being subrogated, that designated assets (which the creditor might take in satisfaction of his claim) be held in reserve for his benefit. 'The general rule is that a person is not entitled to be subrogated to the rights of a creditor until the claim of the creditor has been paid.' (Sawyer v. Zacavich, 178 Cal.App.2d 605, 611, 3 Cal.Rptr. 6, 10.) When the intervener is admitted, the pleading which he presents and files must state facts sufficient, if true, to establish the right or interest which he claims, or else he has no standing in court as a litigant if proper objection is made (Moran v. Bonynge, 157 Cal. 295, 107 P. 312); upon one seeking to intervene rests the burden of showing that his is a proper case for intervention. ¹ The pleading failing to establish that Farmers was a partial subrogee when the action...