Nationwide Ins. Co. v. Superior Court

• Decision Date: 10 February 1982
• Parties: NATIONWIDE INSURANCE COMPANY, Petitioner, v. SUPERIOR COURT of the State of California For the COUNTY OF SAN BERNARDINO, Respondent; Jennie CALZADA, Real Party in Interest. Civ. 27404.
• Court: California Court of Appeals Court of Appeals

Page 464

180 Cal.Rptr. 464

128 Cal.App.3d 711

NATIONWIDE INSURANCE COMPANY, Petitioner, v. SUPERIOR COURT of the State of California For the COUNTY OF SAN BERNARDINO, Respondent Jennie CALZADA, Real Party in Interest.

Civ. 27404.

Court of Appeal, Fourth District, Division 2, California.

Feb. 10, 1982.

[128 Cal.App.3d 712] Egan, Harrison & Bawden and Charles A. Harrison, San Bernardino, for petitioner.

Gamer & Tipps, Joel H. Goldberg and James R. Tipps, Los Angeles, for real party in interest.

No appearance for respondent.

OPINION

KAUFMAN, Associate Justice.

Petitioner Nationwide Insurance Company, defendant in the action below, demurred generally to the plaintiff's complaint, moved for judgment on the pleadings and, alternatively, for abatement of the action. Its demurrer was overruled; its motion for abatement was denied; the motion for judgment on the pleadings was not ruled upon. Contending that these rulings were plainly contrary to law, Nationwide petitioned this court for a writ of mandate. We issued an alternative writ, and the matter is now before us for decision. We have concluded that Nationwide's contentions are meritorious, and the peremptory writ will issue.

Facts

Nationwide issued a policy of automobile liability insurance affording coverage to a limit of $25,000 to Janna Leon Johnson in respect to a vehicular accident that occurred July 3, 1976, on Interstate 10 in the Fontana area. Apparently a vehicle in which Jennie Calzada was a passenger and which was being driven by her husband ran into the rear of a vehicle being operated by Ms. Johnson when Ms. Johnson experienced some difficulty with her vehicle and stopped in a lane of traffic.

Ms. Calzada filed suit for damages for personal injury against Ms. Johnson in San Bernardino Superior Court; Ms. Johnson denied liability and cross-complained against Mr. Calzada for damages for her own personal injuries. Trial of the personal injury action resulted in a jury verdict in favor of Ms. Calzada and an eventual judgment in favor of Ms. Calzada in excess of $93,000. Ms. Johnson appealed from the judgment and that appeal is now pending.

Ms. Calzada then filed in San Bernardino Superior Court the action underlying this writ proceeding, an action against Nationwide as Ms. Johnson's insurer, seeking damages on allegations that Nationwide acted in bad faith in not negotiating a settlement of the personal injury action within its policy limits and in engaging in conduct amounting to bad faith failure to negotiate a settlement in violation of various subdivisions of section 790.03 of the Insurance Code (see Royal Globe Ins. Co. v. Superior Court (1979) 23 Cal.3d 880, 153 Cal.Rptr. 842, 592 P.2d 329). Nationwide's demurrer and motions in the trial court were all founded upon the proposition that inasmuch as Ms. Calzada had not secured a final judgment against Ms. Johnson, an appeal from the judgment still pending, Ms. Calzada has as yet no cause of action against Nationwide.

Discussion of Contentions

The proposition espoused by Nationwide is correct. Its demurrer should have been sustained and its motion for judgment on the pleadings granted. (Royal Globe Ins. Co. v. Superior Court, supra, 23 Cal.3d at p. 892, 153 Cal.Rptr. 842, 592 P.2d 329; cf. Doser v. Middlesex Mutual Ins. Co. (1980) 101 Cal.App.3d 883, 891, 162 Cal.Rptr. 115.) In Royal Globe it was held for the first time that a cause of action for damages can be maintained by an injured third party against the insurer of a negligent party for damages resulting from its conduct violating the provisions of Insurance Code section 790.03. However, the court also held that the injured third party may not institute such an action until a judgment establishing the liability of the insured has been secured. The court stated in relevant part: "[U]nless the trial against the insurer is postponed until the liability of the insured is first determined, the defense of the insured may be seriously hampered by discovery initiated by the injured claimant against the insurer. In addition, damages suffered by the injured party as a result of the insurer's violation of subdivisions (h)(5) and (h)(14) may best be determined after the conclusion of the action by the third party claimant against the insured. Thus, plaintiff's claim against defendant was brought prematurely and the trial court should have sustained defendant's demurrer and granted the motion for judgment on the pleadings on that ground." (23 Cal.3d at p. 892, 153 Cal.Rptr. 842, 592 P.2d 329.)

Ms. Calzada urges that what the court really held was that the injured third party may not sue both the insurer and the insured in the same lawsuit. Certainly the court said that and cited as one reason for its decision the prohibition against informing a jury charged with determining liability that the defendant carries liability insurance. (Royal Globe Ins. Co. v. Superior Court, supra, 23 Cal.3d at p. 891, 153 Cal.Rptr. 842, 592 P.2d 329.) However, the court went on immediately to give the other two reasons for its decision contained in the quoted statement (defense of the insured may be hampered by discovery against the insurer and damages may best be determined after conclusion of the action against the insured). And we believe they constituted an essential part of the decision. (See Doser v. Middlesex Ins. Co., supra, 101 Cal.App.3d at p. 891, 162 Cal.Rptr. 115.) Both these...