Mullen v. Glens Falls Ins. Co.

• Decision Date: 06 September 1977
• Docket Number: No. 2872,2872
• Court: California Court of Appeals Court of Appeals
• Parties: Michael E. MULLEN, Plaintiff and Appellant, v. GLENS FALLS INSURANCE COMPANY, Defendant and Respondent.

Page 605

140 Cal.Rptr. 605

73 Cal.App.3d 163

Michael E. MULLEN, Plaintiff and Appellant, v. GLENS FALLS INSURANCE COMPANY, Defendant and Respondent.

No. 2872.

Court of Appeal, Fifth District, California.

Sept. 6, 1977.

Canelo, Walker & Hansen, Kane, Canelo & Walker, Merced, for plaintiff-appellant

Stammer, McKnight, Barnum & Bailey and James N. Hays, Fresno, for defendant-respondent.

OPINION

GARGANO, Acting Presiding Justice.

On July 22, 1967 defendant Glens Falls Insurance Company (hereafter Glens Falls) issued a comprehensive personal liability policy to Joe and Dorothy Santos; the policy named the Santoses as the insureds and included, as additional insureds, all residents of their household who were related to, or were under the age of 21 years and in the care of, either of them. It also contained these pertinent provisions.

'The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies, Caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, . . .' (Italics added.)

Immediately under this paragraph was the heading, 'Exclusions,' followed by language indicating that coverage did not apply to a series of specified exclusions, including bodily injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading of any automobile, and bodily injury or property damage arising out of a 'business pursuit' of any insured.

On a preceding page, under the caption, 'DEFINITIONS,' it was explained that:

"(O)ccurrence' means an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the stand-point of the insured.'

On October 16, 1969, plaintiff herein, Michael Mullen, filed a civil complaint in the Superior Court of Merced County against Anthony Santos and against Gary Witt and Gary's father, Paul Witt, in order to recover compensatory and punitive damages for personal injuries. The complaint contained four causes of action and was predicated upon negligence and the intentional torts of assault and battery. The first cause of action alleged that Paul Witt and Gary Witt were the owners of a 1955 Chevrolet two-door sedan; that on February 23, 1969, Gary Witt and Anthony Santos 'drove, operated, maintained, propelled, controlled and parked' the automobile at a Richfield service station in the City of Merced; and that as a direct and proximate result thereof, plaintiff received certain specified personal injuries when Anthony Santos negligently struck plaintiff's left arm as plaintiff was loading the automobile with gasoline. The second and third causes of action alleged that, at the time of the negligent act described in the first cause of action, Anthony Santos was an employee of Paul and Gary Witt and was acting in the course and scope of his employment. The fourth cause of action alleged that while plaintiff was in the process of loading the Chevrolet automobile with gasoline, he was 'intentionally assaulted and struck on the left arm' by Anthony Santos.

On October 22, 1969, insurance agent Georgia Bermingham sent an accident notice to Glens Falls claims adjuster, Rudolf Liebl, with reference to the comprehensive personal liability policy issued by Glens Falls to the Santoses. In dark bold type directly beneath the main heading on the accident notice was the parenthetical notation, 'NOT AUTOMOBILE.' The notice went on to explain that on February 23 of that year, plaintiff sustained a head injury when he and the Santoses' son, Anthony, 'apparently got into a fight at (a) service station and (Anthony) hit the service station attendant with a tire iron.' In an accompanying letter, Ms. Bermingham explained that she did not know all of the details of the accident and that the claims adjuster might be able to learn more of the details from an attorney by the name of Monty Mottram at the law office of C. Ray Robinson. The letter further explained that a civil lawsuit would be forthcoming and requested Mr. Liebl to determine if the comprehensive personal liability policy Glens Falls had issued to Joe and Dorothy Santos provided coverage for their son; at the time of the incident, Anthony Santos was under the age of 21 years and was living with his parents.

On October 28, 1969, Rudolf Liebl, without contacting Attorney Mottram, and solely upon the basis of the accident notice he had received from Georgia Bermingham, notified Joe and Dorothy Santos that the policy did not provide coverage for the incident in question because it did not cover acts 'intentionally' caused by an insured. In the meanwhile, a copy of the summons and the complaint in plaintiff's personal injury lawsuit had been served upon Anthony Santos.

On November 20, 1969, Attorney R. W. Levy, who represented Cal-Farm Insurance Company, the insurance carrier fot the Witts, called Rudolf Liebl and told him that if Glens Falls did not 'pick up' Anthony Santos' defense in the personal injury lawsuit under a reservation of rights agreement, Cal-Farm would do so and in turn would 'tender' the defense back to Glens Falls. On the next day, Levy furnished Liebl with a copy of plaintiff's personal injury complaint.

On December 15, 1969, William Snyder, Rudolf Liebl's immediate supervisor, informed Joe and Dorothy Santos that the insurance company was denying coverage and a defense under its policy. On the same day, Snyder wrote to Attorney Levy and told the lawyer that Glens Falls was denying coverage and a defense to Anthony Santos under the comprehensive personal liability policy it had issued to the Santoses because plaintiff's complaint in the personal injury action alleged that his injury was the proximate result of the operation of an automobile and that Anthony Santos was an employee of Paul and Gary Witt and was acting in the course and scope of his employment at the time of the occurrence. Thereupon, the Santoses engaged Attorney John Whiting of the law firm of C. Ray Robinson to represent them, and Cal-Farm Insurance Company obtained a reservation of rights agreement signed by Anthony Santos. When Whiting determined that Cal-Farm could not defend both the Witts and Anthony Santos in the personal injury action, he called William Snyder and inquired as to whether Glens Falls would provide a defense for Anthony Santos; Snyder denied the defense, stating that the denial was based upon the accident notice the company had received from insurance agent Georgia Bermingham and upon the pleadings on file in plaintiff's personal injury lawsuit. Later, Attorney Whiting filed an answer in that lawsuit on behalf of Anthony Santos. The answer denied the material allegations of the complaint and set up self-defense on the part of the younger Santos as an affirmative defense.

On August 6, 1970, a judgment was entered against Anthony Santos in plaintiff's personal injury lawsuit. The judgment was grounded upon an 'intentional assault' on the part of the younger Santos and awarded plaintiff the sum of $16,144 for general damages and the amount of $5,000 for punitive damages, plus costs. Then Anthony Santos assigned to plaintiff all rights he may have had against Glens Falls for the company's refusal to provide him with a defense. On June 28, 1972, plaintiff commenced the present action against Glens Falls for damages for failing to defend Anthony Santos.

On March 9, 1973, plaintiff, by deposition, testified that on the evening of February 23, 1969, he was employed at a service station in the City of Merced when Gary Witt drove a 1955 Chevrolet automobile into the station and asked for 50 cents worth of gasoline; plaintiff did not see anyone else around. He stated that as he put the nozzle of the hose into the neck of the car's gasoline tank, Anthony Santos Struck him with a tire iron across the back between the shoulder blades; plaintiff turned around and he was hit again by Santos with the tire iron; the second blow broke his left arm. Plaintiff testified that when Santos left the premises, Santos said, 'I am going to kill you.' He also testified that both Gary Witt and Anthony Santos were strangers to him, that shortly before Witt drove the 1955 Chevrolet automobile into the service station, he observed the car drive by with two white male adults inside, that he was unaware that Anthony Santos was behind him until after he was first hit with the tire iron, and that he had no conversation with his attacker.

On November 24, 1975, the cause was submitted to the court for decision on an agreed statement reciting the facts we have summarized and referring to attached exhibits, including a crime report made by the Merced Police Department on the day of the attack; the crime report quoted Santos' remark that he was going to kill plaintiff. From these facts, the court concluded that Glens Falls was not obligated to provide Anthony Santos with a defense and as a consequence had no obligation to pay the whole or any part of the judgment plaintiff obtained against Santos in the personal injury action. This appeal followed.

We commence with the observation that if we were to look only to plaintiff's complaint in his personal injury action against Anthony Santos, we would be tempted to agree with Glens Falls' position that it was not obligated to provide Santos with a defense in that lawsuit; the allegations of the complaint suggest that the operation and use of the Chevrolet automobile owned by Paul and Gary Witt was somehow connected with plaintiff's injuries, and Glens Falls' insurance policy...