Maxon v. Security Ins. Co. of New Haven, Conn.

• Decision Date: 29 March 1963
• Citation: 214 Cal.App.2d 603,29 Cal.Rptr. 586
• Court: California Court of Appeals Court of Appeals
• Parties: Frank T. MAXON, Plaintiff and Appellant, v. SECURITY INSURANCE COMPANY OF NEW HAVEN, CONNECTICUT and Fred A. Petersen, Defendants and Respondents. Civ. 20680.

Page 586

29 Cal.Rptr. 586

214 Cal.App.2d 603

Frank T. MAXON, Plaintiff and Appellant, v. SECURITY INSURANCE COMPANY OF NEW HAVEN, CONNECTICUT and Fred A. Petersen, Defendants and Respondents.

Civ. 20680.

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

March 29, 1963.

Mathews & Traverse, Francis B. Mathews, Eureka, for appellant.

Huber & Goodwin, Dayton D. Murray, Jr., Eureka, for respondents.

MOLINARI, Justice.

This is an appeal from a judgment in favor of the defendants, hereinafter referred to as the respondents, and against the plaintiff, hereinafter referred to as the appellant.

THE RECORD

The appellant filed a complaint against the respondents, the pertinent allegations of which are as follows: That the respondent insurance company through its agent, the respondent Petersen, issued a policy of liability insurance to the appellant, as the insured, which contained the following provisions:

"Store Keepers Liability Coverage. To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness, or disease, including death at any time resulting therefrom, sustained by any person or injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the retail store hazard."

"Retail Store Hazard Defined. The ownership, maintenance or use of retail store premises, or operations necessary or incidental thereto." 'Defense. * * * With respect to such insurance as is aforded [sic] by this policy, the Company shall (a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent';

That while said policy was in force a certain Mrs. Beulah K. Johnson gave a check to an employee of the appellant, which check was presented for payment by the appellant and was returned marked 'account closed'; that thereafter the appellant filed a complaint with the District Attorney for the arrest of the said Beulah Johnson; that the said Beulah Johnson was arrested, but the complaint against her was thereafter dismissed by the District Attorney; that the said Beulah Johnson thereupon instituted an action for malicious prosecution, the defense to which the appellant tendered to the respondents who refused to furnish such defense; that the appellant was caused to expend costs for investigators, witnesses, attendants and attorneys' fees in the sum of $2,050.05 for the defense of said action, which sum, the respondents have refused to pay; and that the appellant has performed all of the promises, covenants and conditions in said agreement on his part to be performed.

The record is silent as to whether there was any responsive pleading to the complaint by the respondents. We have an inkling as to what next transpired in a 'Memorandum of Opinion,' signed and filed by the judge of the court below, which recites that 'It was agreed by counsel for both parties that the Court could determine, as a matter of law, whether or not the insurance contract required the defendant to defend a malicious prosecution action brought against plaintiff by a third party.' The said opinion, after discussing legal principles, which the court deemed applicable, contains the following statement: 'It is adjudged that the language of the insurance policy does not require the defendant to reimburse the plaintiff for money expended in his own defense in a malicious prosecution action.' ¹

It appears that a 'motion to amend the complaint and to reconsider opinion' was made by the appellant, a ruling on such a motion having been made a part of the record on appeal. Said ruling purports to grant the motion to amend but contains a statement that in the court's opinion, the amendment to the complaint 'does not change the ruling heretofore made.' ² The amended complaint contained the same allegations, with the addition of an allegation to the effect that the action brought by Beulah Johnson against the appellant terminated in favor of the appellant, that the court in said action found that there was no evidence of malice on the part of the appellant and specifically found that the actions of the appellant were done in good faith and not maliciously, but with probable cause and without intent to injure Mrs. Johnson in any manner. An answer to the amended complaint was filed by the respondents, who thereafter made a motion entitled 'Motion for Summary Judgment' which recited that the basis of the motion was that the action was without merit. An 'affidavit' in support of the motion was filed by one of the attorneys for the respondents. ³ No counteraffidavit was filed by the appellant. The said motion came on for hearing, whereupon the court made its order dismissing the amended complaint and ordering judgment for the respondents. ⁴ A judgment pursuant to said order entitled 'Judgment by Court Under C.C.P. section 437-c' was thereafter signed by the court and filed in the proceedings. This is the judgment from which the appeal is taken.

Notwithstanding that the court and counsel were laboring uner the impression that the motion was one for summary judgment, it is clear that the proceeding was not one for the determination of whether there were any triable issues of fact but whether the amended complaint stated a cause of action. ⁵ Moreover, the purported affidavit filed by the respondents does not contain any evidentiary facts nor does it set forth any facts showing that if the affiant were called as a witness he could competently testify thereto. A reading of the purported affidavit in support of the motion readily discloses that it is nothing more than an argument.

If there is a proper judgment in this case it is a judgment on the pleadings. We are satisfied, after wending our way through the procedural maze, that the motion here presented and submitted to the court, notwithstanding its nomenclature, was nothing more than a motion for a judgment on the pleadings. ⁶ Where such a motion is made by the defendant, the only question, as on general demurrer, is one of law, and that question is simply whether the complaint states a cause of action. (Tracy v. Ferrera, 144 Cal.App.2d 827, 301 P.2d 905; Beverage v. Canton Placer Mining Co., 43 Cal.2d 769, 278 P.2d 694.)

QUESTION PRESENTED

Does the appellant's amended complaint state a cause of action?

Does the Subject Policy Provide Indemnity Against an Action for Malicious Prosecution?

At the outset we must bear in mind that we are dealing with the sufficiency of the amended complaint as to whether it states a cause of action. We are accordingly required to treat all of the facts therein stated as true. We must also take cognizance of certain well-established rules of construction applicable to insurance contracts, to wit: that any ambiguity or uncertainty in an insurance policy is to be resolved against the insurer; 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; if the insurer uses language which is uncertain any reasonable doubt will be resolved against it; if the doubt relates to the extent or fact of coverage, whether as to peril insured against, the amount of liability or the person or persons protected, the language will be understood in its most inclusive sense, for the benefit of the insured; and, where two interpretations equally fair may be made, that which affords the greatest measure of protection to the assured will prevail. (City of Santa Monica v. Royal Indemnity Co., 157 Cal.App.2d 50, 54-55, 320 P.2d 136; Continental Casualty Co. v. Phoenix Construction Co., 46 Cal.2d 423, 437-438, 296 P.2d 801; Arenson v. National Automobile & Casualty Insurance Co., 45 Cal.2d 81, 83, 286 P.2d 816; Fageol Truck & Coach Co. v. Pacific Indemnity Co., 18 Cal.2d 731, 747, 117 P.2d 661; Osborne v. Security Ins. Co., 155 Cal.App.2d 201, 207-208, 318 P.2d 94; Russ-Field Corp. v. Underwriters at Lloyd's, London, England, 164 Cal.App.2d 83, 92, 330 P.2d 432.)

The inquiry in the present case is focused primarily upon the meaning of the word 'accident' as used in the policy. Beforce proceeding to interpret the meaning of the word 'accident,' it should be noted that the policy provisions in question do not use the words 'malicious prosecution' nor do they make specific reference to the tortious liability known as 'malicious prosecution.' By its terminology the policy proposes to indemnify the insured against damages for bodily injury sustained by any person, "caused by accident and arising out of the retail store hazard." (Emphasis added.) This provision obviously has reference to an injury to a person other than the insured because it purports "[t]o pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury" sustained by such person.

Webster defines accident as 'an unexpected happening causing loss or injury which is not due to any fault or misconduct on the part of the person injured but from the consequences of which he may be entitled to some legal relief' 'an unforseen unplanned event or condition * * *.' (Webster's Third New Internat. Dict.) In Geddes & Smith, Inc. v. St. Paul Mercury Indemnity Co., 51 Cal.2d 558, 334 P.2d 881, the court defined accident as "a casualty--something out of the usual course of events, and which happens suddenly and unexpectedly and without design of the person injured.' * * * It "includes any event which takes place without the foresight or expectation of the person acted upon or affected by the event."' (P. 563, 334 P.2d p. 884.) (See Richards v. Travelers Ins. Co., 89 Cal. 170, 176, 26 P. 762; Price v. Occidental Life Ins. Co., 169 Cal. 800, 802, 147 P. 1175; Rock v. Travelers' Insurance Co., 172 Cal. 462, 465, 156...