Lumbermens Mutual Casualty Co. v. Agency Rent-A-Car, Inc.
Decision Date | 11 February 1982 |
Docket Number | RENT-A-CA,INC |
Citation | 180 Cal.Rptr. 546,128 Cal.App.3d 764 |
Court | California Court of Appeals Court of Appeals |
Parties | LUMBERMENS MUTUAL CASUALTY COMPANY, Plaintiff and Appellant, v. AGENCY, et al., Defendants and Respondents. Civ. 24889. |
Nickoloff & Distel and John F. Distel, San Diego, for plaintiff and appellant.
Bolton, Hemer & Dunn and Donald H. Moore, Los Angeles, for defendants and respondents.
Lumbermens Mutual Casualty Company (Lumbermens) appeals a judgment in favor of Agency Rent-A-Car, Inc. (Agency) and National Bonding & Accident Insurance Company (National) after requesting the court declare which party had primary coverage for an automobile involved in a collision. The pivotal issue is whether Insurance Code section 11580.9 1 applies to a surety bond filed in compliance with the motor vehicle financial responsibility laws. For the reasons which follow we conclude it does not, and affirm.
The automobile accident involved a car owned by Agency, rented and driven by John Cilmi, and one owned and operated by Marion Lockett. Cilmi and his wife sued Lockett because of personal injuries and property damage. Lockett and her passenger Tes Marie Thompson, cross-complained for personal injuries and property damage. The Cilmis also filed uninsured motorist claims with their own automobile insurance carrier, Lumbermens, because Lockett was uninsured.
Cilmi had current insurance coverage with Lumbermens, while Agency had an automobile surety bond in the amount of $15,000 with National and was self-insured up to $100,000, after which it had "excess" automobile insurance with Northeastern Fire Insurance Company of Pennsylvania. Consequently, Cilmi tendered defense of the cross-complaint to Lumbermens which, in a classic "Tinker to Evers to Chance" move, tendered both the defense of the cross-complaint and the uninsured motorist claim to Agency. When Agency refused to play ball, Lumbermens filed the case at bench.
Lumbermens' policy contains the following hybrid prorata and excess clause:
"If the insured has other insurance against a loss covered by Part One of this policy the company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss; provided, however, the insurance with respect to a temporary substitute automobile or non-owned automobile shall be excess over any other valid and collectible insurance." (Italics added.)
Lumbermens contends National's coverage under its financial responsibility bond is primary under section 11580.9, subdivision (d). 2
Sections 11580.8 3 and 11580.9 4 reflect a legislative effort to reduce the volume of disputes within this area of primary, excess or sole coverage litigation between the injured parties, insureds and insurers. (Transport Indemnity Co. v. Alo, 118 Cal.App.3d 143, 147, 172 Cal.Rptr. 394; Ohio Cas. Ins. Co. v. Aetna Ins. Co., 85 Cal.App.3d 521, 524, 149 Cal.Rptr. 562.) It applies to "first-tier" liability, as opposed to "second-tier" responsibility. Within the former, it applies to basic liability coverage where indemnification for direct liability is contractually secured by the insured with the consequence the insurer has no right of reimbursement against the insured-tortfeasor or his estate. Likewise, it applies to one who has satisfied the financial responsibility laws by obtaining a certificate of self-insurance pursuant to Vehicle Code section 16053 ( ), thus declaring one's financial ability to directly respond to potential vehicular liability. 5 However, it does not apply to "second-tier" liability, where a party, i.e., a surety, becomes liable only following the establishment of liability on the part of its principal and the latter's failure to satisfy that liability. This follows since, by analogy, the bonded principal is nothing more than a "self-insured."
The judgment is affirmed.
1 All statutory references are to the Insurance Code unless otherwise specified.
2 Granted, (National American Ins. Co. v. Insurance Co. of North America, 74 Cal.App.3d 565, 574, 140 Cal.Rptr. 828.) However, here, Lumbermens' policy includes an excess clause providing that insurance for a temporary substitute or non-owned automobile "shall be excess over any other valid and collectible insurance," while National's surety bond is silent in this regard. Accordingly, we look to sections 11580.8 and 11580.9 for guidance.
3 Section 11580.8 provides: ...
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