Otter v. General Ins. Co.

• Decision Date: 21 September 1973
• Citation: 34 Cal.App.3d 940,109 Cal.Rptr. 831
• Parties: Albert Myron OTTER, Plaintiff, v. GENERAL INSURANCE COMPANY OF AMERICA et al., Defendants. GENERAL INSURANCE COMPANY OF AMERICA, a corporation, Cross-Complainant and Respondent, Insurance Company of North America, a corporation, Cross-Complainant and Appellant, v. Albert Myron OTTER et al., Cross-Defendants. PACIFIC INDEMNITY COMPANY, a corporation, Cross-Complainant and Respondent, v. GENERAL INSURANCE COMPANY OF AMERICA et al., Cross-Defendants, Insurance Company of North America, a corporation, Cross-Defendant and Appellant. AMERICAN HOME ASSURANCE COMPANY, a corporation, Cross-Complainant, v. GENERAL INSURANCE COMPANY OF AMERICA et al., Cross-Defendants. Eugene E. WETZSTEIN and Augusta Alberta Wetzstein, Cross-Complainants, Respondents and Cross-Appellants, v. Albert Myron OTTER, Individually, et al., Cross-Defendant and Cross-Respondents, General Insurance Company of North America, a corporation, and Pacific Indemnity Company, a corporation, Cross-Defendants, Respondents and Cross-Respondents, Insurance Company of North America, a corporation, Cross-Defendant, Appellant and Cross-Respondent. Civ. 13454.
• Court: California Court of Appeals Court of Appeals

Page 831

109 Cal.Rptr. 831

34 Cal.App.3d 940

Albert Myron OTTER, Plaintiff, v. GENERAL INSURANCE COMPANY OF AMERICA et al., Defendants.

GENERAL INSURANCE COMPANY OF AMERICA, a corporation, Cross-Complainant and Respondent, Insurance Company of North America, a corporation, Cross-Complainant and Appellant, v. Albert Myron OTTER et al., Cross-Defendants.

PACIFIC INDEMNITY COMPANY, a corporation, Cross-Complainant and Respondent, v. GENERAL INSURANCE COMPANY OF AMERICA et al., Cross-Defendants, Insurance Company of North America, a corporation, Cross-Defendant and Appellant.

AMERICAN HOME ASSURANCE COMPANY, a corporation, Cross-Complainant, v. GENERAL INSURANCE COMPANY OF AMERICA et al., Cross-Defendants.

Eugene E. WETZSTEIN and Augusta Alberta Wetzstein, Cross-Complainants, Respondents and Cross-Appellants, v. Albert Myron OTTER, Individually, et al., Cross-Defendant and Cross-Respondents, General Insurance Company of North America, a corporation, and Pacific Indemnity Company, a corporation, Cross-Defendants, Respondents and Cross-Respondents, Insurance Company of North America, a corporation, Cross-Defendant, Appellant and Cross-Respondent.

Civ. 13454.

Court of Appeal, Third District, California.

Sept. 21, 1973.

As Modified on Denial of Rehearing Oct. 19, 1973.

Hearing Denied Nov. 15, 1973.

[34 Cal.App.3d 943] James J. Duryea, San Francisco, for General Ins. Co. of america.

Barfield, Barfield, Dryden & Ruane, Cyril Viadro, San Francisco, for Ins. Co. of No. America.

McDonald & Donahue, Sacramento, for Pacific Indemnity Co.

Rust, Armenis & Matheny, Sacramento, for American Home Assurance Co.

Brekke & Mathews, Citrus Heights, and Carroll, Burdick & McDonough, San Francisco, for cross appellants Wetzstein.

PIERCE, ^* Associate Justice (assigned).

This is a declaratory relief action brought by Albert Otter. Superficially ¹ it is just another action involving counter-contentions between several indemnity insurance A second question confronts us. A motion has been made before this court by the attorney who represented Both General and INA in the trial court to strike portions of the appellate brief of INA (writen by substituted attorneys). The portions sought to be stricken are those which criticize dual representation. We hold that there was an irreconcilable conflict of interest between those two insurers and therefore deny the motion.

companies as to which, under the terms of the respective policies involved, pays how much, if any, of sums due under the several policies involved. [34 Cal.App.3d 944] The trial court held that Insurance Company of North America (INA), the insurer under an umbrella Excess policy is, under the terms thereof, liable to pay all of such balance. We agree that American Home, an underlying insurer of a specified named insured, was properly held not liable. We believe that General Insurance Company was improperly absolved by the trial court.

THE FACTS

'Jefferson Motors, Inc., A Corporation and Jefferson Motors, DBA Jefferson Leasing' is principally owned by Carl Jefferson of Concord. Albert Myron Otter, a close friend of Jefferson, is a travel agent. He is part-owner and president of Lampard-Otter, Inc., a travel agency. On the morning of June 15, 1968, the two men, Jefferson and Otter, had occasion to be at the San Francisco airport. They had driven there in a 1968 Lincoln belonging to, and apparently used as a demonstrator in the business of, Jefferson's incorporated automobile dealership. Otter owned a Mercury Cougar which he had bought from Jefferson Motors. At a stop en route home Otter mentioned to Jefferson a prospective social weekend trip to Lake Tahoe to visit William Breuner, president of John Breuner Company, at the latter's mountain home. The Otters expected to drive through Sacramento Valley on a hot day. The Jefferson Motors' Lincoln was air-conditioned, the Otter Mercury was not.

In addition to the fact that Jefferson and Otter were close friends, the former conceived the idea that William Breuner, manager and a principal owner of a chain of furniture stores, was a prospective purchaser of a Lincoln Continental from Jefferson Motors. (The Breuners lived in the Concord trade area.) Jefferson suggested to Otter that the latter use the Lincoln on his Tahoe trip. In the sense that it may be doubted that Jefferson would have made the same offer to one with whom he was less well acquainted, and that the air conditioning of the Lincoln was a contributing reason for the offer, the record (Jefferson's depositions) nevertheless contains substantial evidence that the offer of the trip to Tahoe was also a means of proposed demonstration of the Lincoln to Breuner--and the trial court so stated in a memorandum opinion, as follows: 'The court is satisfied that as to Jefferson Motors the use of the Lincoln was prompted by the business interests of the corporation, permitting Otter to enjoy the automobile, as a demonstrator in the hope that he and others (with whom he was expecting to associate over the weekend) would be interested in purchasing a Lincoln.' ¹

The trip commenced and the accident happened on the same date, June 15, 1968. Otter was driving easterly through Placer County on U.S. Highway 80. Otter negligently collided with a Rambler in which the Wetzsteins were riding and the Wetzsteins were not contributorily negligent. We discuss briefly the disposition of the previously paid portion of the judgment in favor of the Wetzsteins in a Placer County action brought by them against Otter, Jefferson and the business firms they control. Pacific Indemnity insured Otter individually in an 'underlying' indemnity policy with limits of $10,000--$300,000. Pacific Indemnity

undertook Otter's defense. Pending trial of the Wetzstein action, a settlement of $72,500 was made by that insurer of Mr. Wetzstein's claim and a dismissal with prejudice of his claim for damages was made. During trial of Mrs. Wetzstein's case, a stipulated judgment of $300,000 was entered against Otter. Of that amount, Pacific Indemnity paid $100,000 (thus discharging the limits of its policy liability). It has not appealed. The sum of $200,000 of Mrs. Wetzstein's judgment remains unpaid and payment will be determined by this appeal. ² That brings us to the issues relevant to this litigation.

The INA Policy

INA issued a policy to Jefferson Motors, Inc., termed 'Excess Blanket Catastrophe Liability Policy No. XBC 2 42 05.' The policy period was from April 30, 1966, to April 30, 1969. The limit of its liability is clearly spelled out. In readable language and in bold faced type it informs its insured: 'It is agreed by the insured that the following Underlying insurance (by another insurer) is in force as collectible insurance at inception of this policy for the limits of liability stated hereafter.

                  "
                  "(c) Automobile      Bodily Injury Liability
                       Liability       $100,000.00 Each Person
                                       $300,000.00 Each Accident
                                       Property Damage Liability
                                       $50,000.00 Each Accident
                  "....................................."
                

(Our italics.)

In referring to such underlying policy, the parties were not referring to the policy of Pacific Indemnity (Pacific insured Otter individually). It will be the burden of this opinion to demonstrate they had in mind the policy of General. Jefferson Motors bought the INA policy (through its insurance agent Krueger & Co.--the same agent through whom it bought the General policy). Jefferson Motors obviously wanted its business protected by the underlying insurance and in addition a policy of excess insurance affording much greater coverage.

The INA policy so states. It tells its insured that it is insurance In excess of all other insurance. It says under the caption 'Other Insurance: If other collectible insurance with any other insurer is available to the insured covering covering a loss also covered hereunder (except insurance purchased to apply in excess of the sum of the retained limit and the limit of liability hereunder), the insurance hereunder shall be in excess of, and not contribute with, such other insurance. . . .' The policy limit of the INA insurance is $1,000,000. The trial court expressly found the INA policy to be excess insurance. In the language of the insurance industry a policy of the type issued by INA is called an 'umbrella' policy.

The General Insurance Policy

At the same time or before the INA policy was bought, Jefferson Motors purchased through Krueger & Company an underlying $100,000--$300,000 policy (General Policy No. CP 169542. We turn to it now. It is an exceedingly difficult policy to read.

It starts with a seal containing a declaration that it is a 'SPECIAL MULTIPERIL POLICY COMMERCIAL,' prepared for Jefferson Motors through 'your Independent Insurance Agent,' Krueger &amp The second page of General policy CP 169542 covers the apparent liability of the company for bodily injury and property damage. The limits are $100,000--$300,000 bodily injury and $50,000 property damage. This is stated to cover blanket liability and garage liability. It appears to be underlying.

Company, whose name and address is typewritten at the bottom of the page. Next occurs an 'INDEX OF COVERAGES,' in which under 'Liability' both blanket and garage liability are listed. There are other provisions in the body of this 'index' page which are meaningless in the context of this case or seem so to the uncognizant. 'Other Insurance,' a caption under which 'Automobile Dealers Floater Section V, Schedule A' is written and might seem relevant excepting that we have searched for an 'other insurance' clause in Section V, Schedule A,' and there is none. Thus, obviously the index furnishes no clue or guide to an insured. A clause contained on the twelfth unnumbered page of the policy is argued as a basis for non-coverage. We will discuss this below.

The endorsement termed ...