Parsons Manufacturing Corp. v. Superior Court

• Decision Date: 08 June 1984
• Court: California Court of Appeals Court of Appeals
• Parties: PARSONS MANUFACTURING CORPORATION, INC., Petitioner, v. The SUPERIOR COURT of San Mateo County, Respondent; GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORPORATION, LTD., Real Party in Interest. A025969.

Page 419

203 Cal.Rptr. 419

156 Cal.App.3d 1151

PARSONS MANUFACTURING CORPORATION, INC., Petitioner, v. The SUPERIOR COURT of San Mateo County, Respondent GENERAL ACCIDENT FIRE & LIFE ASSURANCE CORPORATION, LTD., Real Party in Interest.

A025969.

Court of Appeal, First District, Division 3, California.

June 8, 1984.

Hearing Denied Aug. 9, 1984.

Law Offices of F. John Royce, Los Altos, for petitioner.

No appearance for respondent.

Law Offices of Clark L.V. Deichler, David Morse Hammond, Oakland, for real party in interest.

BARRY-DEAL, Associate Justice.

This petition by a lessee challenges two summary judgment rulings against it. The issue raised is whether the lessor's insurer is barred from suing lessee for a negligently caused fire. The lease agreement provides for return of the premises in the same condition as received, "... damage by fire, act of God or by the elements excepted, ..." and contains other provisions suggesting that the lessor will provide fire insurance for the building. We conclude that under the showing made below, those lease provisions bar recovery by the insurer.

On May 21, 1982, real party in interest, General Accident Fire & Life Assurance Corporation, Ltd. (insurer), having paid some $225,888.99 on a fire insurance policy, brought an action against petitioner. The complaint alleged that the lessors of commercial property had procured a fire insurance policy from real party and that petitioner was a lessee using the premises to conduct a plastics manufacturing business. The complaint alleged that petitioner's negligence caused a fire which consumed a large portion of the premises and caused the losses described in the complaint. It further asserted that real party was subrogated to the rights of the insured lessor and was entitled to the benefits of the written lease agreement dated November 10, 1970, and renewed on November 1, 1980.

Petitioner entered a general denial to the complaint and asserted the affirmative defense that in the lease the lessors had waived subrogation for damage by fire, citing General Mills v. Goldman (8th Cir.1950) 184 F.2d 359.

Real party moved for partial summary judgment, seeking a determination that the lessors had not waived subrogation. Petitioner countered with its own motion for summary judgment, seeking to establish as a complete defense the asserted waiver of subrogation. On December 30, 1983, the trial court ruled in real party's favor on both motions, stating as follows: "The only reasonable interpretation of the lease and more specifically paragraph 5 thereof, is that the lessee would be responsible for their own negligence or intentional act in connection with any fire damage to the premises. This is consistent not only with logic but also with case authority on the subject. [p] Thus, Plaintiff has a right of subrogation." This petition followed, seeking to set aside the ruling granting partial summary judgment for real party and denying summary judgment to petitioner. ¹

Summary judgment and partial summary judgment are authorized by Code of Civil Procedure section 437c, which provides, in part, that a motion for summary judgment "... shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.... [p] ... [I]f it appears that the proof supports the granting of such motion as to some but not all the issues involved in the action, ... the court shall, by order, specify that such issues are without substantial controversy.... At the trial of the action the issue so specified shall be deemed established and the action shall proceed as to the issues remaining." (Code Civ.Proc., § 437c, subds. (c) and (f).)

"Review of the trial court's determination involves pure matters of law: Reassessment of the legal significance of the documents upon which the trial court acted. The reassessment normally proceeds in one or more of three consecutive steps:

"(1) Analyze the pleadings. 'Papers submitted on a motion for summary judgment must be directed to the issues raised by the pleadings.' (Vanderbilt Growth Fund, Inc. v. Superior Court (1980) 105 Cal.App.3d 628, 635 ..., citing Keniston v. American Nat. Ins. Co. (1973) 31 Cal.App.3d 803, 812 ....) In addition, a defendant's motion for summary judgment 'necessarily includes a test of the sufficiency of the complaint .... Motions for summary judgment in such situations have otherwise been allowed as being in legal effect motions for judgment on the pleadings.' (C.L. Smith Co. v. Roger Ducharme, Inc. (1977) 65 Cal.App.3d 735, 745 ...; cf. also Brown v. Critchfield (1980) 100 Cal.App.3d 858, 862, fn. 1 ...; Bowden v. Robinson (1977) 67 Cal.App.3d 705, 710 ...; Kessler v. General Cable Corp. (1979) 92 Cal.App.3d 531, 535-536 ....)

"(2) Examine the moving parties' showing. ' "Summary judgment is proper only if the affidavits in support of the moving party would be sufficient to sustain a judgment in his favor ...." ' (Weaver v. Superior Court (1979) 95 Cal.App.3d 166, 183 ..., quoting from Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417 [42 Cal.Rptr. 449, 398 P.2d 785] ..., with italics added.) Where, as here, the moving party is a defendant he must either negate a necessary element of the plaintiff's case or state a complete defense. (Frazier, Dame, Doherty, Parrish & Hanawalt v. Boccardo, Blum, Lull, Niland, Teerlink & Bell (1977) 70 Cal.App.3d 331, 338 ....) If the moving party did not make the necessary showing, then (without consideration of triable issues of material fact) the summary judgment should have been denied. (Cf., e.g. Albertini v. Schaefer (1979) 97 Cal.App.3d 822, 831 ...; Tresemer v. Barke (1978) 86 Cal.App.3d 656, 662-663 ...; Beech Aircraft Corp. v. Superior Court (1976) 61 Cal.App.3d 501, 520, 132 Cal.Rptr. 541....) If (but only if) the moving parties are found to have made the necessary showing, then,

"(3) Examine the responding parties' showing in opposition to determine whether it created any triable issue as to a fact material to the moving parties' showing: '[N]o amount of factual conflicts upon other aspects of the case will affect the result ....' (Frazier, supra, 70 Cal.App.3d 331, 338 .) If there was a triable issue of material fact summary judgment should have been denied.

"It is the general rule with respect to steps (2) and (3), that the moving parties' declartions should be construed strictly and the responding parties' liberally. (Cf., e.g., Pupko v. Bank of America (1981) 114 Cal.App.3d 495, 498 ...; Calva Products v. Security Pacific Nat. Bank (1980) 111 Cal.App.3d 409, 415 ....)" (LaRosa v. Superior Court (1981) 122 Cal.App.3d 741, 744-745, 176 Cal.Rptr. 224.)

1. The Pleadings

The complaint alleges a right to subrogation. The answer raises the affirmative defense of waiver of subrogation. Thus, the issue decided on the motion and cross-motion was joined by the pleadings. Neither party argues otherwise.

2. The Moving Parties' Showing

In order to analyze the showing made by each party in moving for summary judgment or partial summary judgment, it is necessary first to consider the applicable law. Only then can we determine whether triable issues have been presented as to material facts.

a. The Applicable Law

"A subrogation as applied to an insurer is its right to be put in the position of its insured against third parties legally responsible to its insured for the loss which the insurer has both insured and paid. [Citation.]" (Liberty Mut. Fire Ins. Co. v. Auto Spring Supply Co. (1976) 59 Cal.App.3d 860, 864, 131 Cal.Rptr. 211.) "The right to subrogation is governed by equitable principles (see Meyers v. Bank of America etc. Assn. [1938], 11 Cal.2d 92, 96-97 ...) ...." (Liberty Mut. Fire Ins. Co. v. Auto Spring Supply Co., supra, 59 Cal.App.3d at p. 865, 131 Cal.Rptr. 211.)

California law is surprisingly sparse in its treatment of the insurer's right of subrogation against a lessee who has negligently caused a fire. The early Supreme Court opinion in Morris v. Warner (1929) 207 Cal. 498, 279 P. 152, relied on by real party, supports the view that a negligent lessee should be held responsible for the damage he or she causes. There, a commercial lease required the lessor to rebuild after fire damage if restoration could be accomplished within 60 days. When the lessor refused to rebuild, lessee sued. Lessor cross-complained for damages caused by the negligent fire. The Morris court affirmed the trial court's judgment for the lessor on the cross-complaint. In the course of its ruling, it stated: "Neither the rebuilding clause nor the provisions of the lease to the effect that the lessee should keep said premises in good repair and condition at his own expense, damage by fire or elements excepted, and at the end of the term quit and surrender said premises to the lessor in good repair, damage by fire and ordinary use excepted, can reasonably be construed as relieving the lessee from liability to the lessor for a fire caused by his own negligence or as requiring the lessor to rebuild in the event that the premises should be destroyed by a fire thus caused by the negligence of the lessee." (Id., at pp. 501-502, 279 P. 152.)

Pointing to paragraph 5 of petitioner's lease, the paragraph mentioned by the trial court, real party contends that the Morris discussion controls this case. Paragraph 5 of the lease provides, in pertinent part: "... By entry hereunder, Lessee accepts the premises as being in good and sanitary order, condition and repair and agrees on the last day of said term, or sooner termination of this lease, to surrender unto Lessor all and singular said premises with said appurtenances in the same condition as when received, reasonable use and wear thereof and damage by fire, act of God or by the elements excepted, and to remove all of Lessee's signs from said premises."

The Morris holding, because...