Patterson v. Insurance Co. of North America

• Decision Date: 02 April 1970
• Citation: 6 Cal.App.3d 310,85 Cal.Rptr. 665
• Court: California Court of Appeals Court of Appeals
• Parties: Corrinne PATTERSON, Cross-Complainant and Respondent, v. INSURANCE COMPANY OF NORTH AMERICA, Cross-Defendant and Appellant. Civ. 9055.

Page 665

85 Cal.Rptr. 665

6 Cal.App.3d 310

Corrinne PATTERSON, Cross-Complainant and Respondent, v. INSURANCE COMPANY OF NORTH AMERICA, Cross-Defendant and Appellant.

Civ. 9055.

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

April 2, 1970.

[6 Cal.App.3d 313] King & Mussell by C. L. Vineyard, San Bernardino, for cross-defendant and appellant.

Richard M. Anderson, San Bernardino, for cross-complainant and respondent.

OPINION

TAMURA, Associate Justice.

Cross-complainant (Mrs. Patterson) was involved in an automobile collision. The passenger and driver of the other vehicle filled separate actions against her for damages for personal injuries sustained in the accident. Mrs. Patterson thereupon tendered defense of the actions to the Insurance Company of North America (Appellant) and upon its refusal to accept, filed a 'Cross Complaint for Indemnity' against appellant to determine coverage under a liability insurance policy issued to Mr. Patterson and for attorneys' fees and expenses incurred in defending the two personal injury actions. The cases were consolidated, but by stipulation of the parties the cross-complaint was severed and tried prior to the two principal actions. The crucial issue in the trial on the cross-complaint was whether a 1950 Cadillac which Mrs. Patterson was driving at the time of the accident was automatically covered by appellant's policy under a replacement coverage clause. That issue was submitted to a jury on the following evidence:

In April 1961 Mr. Patterson, husband of Mrs. Patterson, bought an automobile liability policy from appellant covering a 1947 Cadillac and a 1950 Buick. In late April or early May of that year he bought the 1950 Cadillac in question. The accident occurred on December 7, 1961.

Mr. Patterson testified that he bought the 1950 Cadillac to replace the 1950 Buick, that he never operated the Buick after acquiring the Cadillac, that he stripped the Buick and after keeping it for 'several weeks or a month or two' sold it for junk. ¹

Appellant introduced a certified copy of a motor vehicle registration certificate showing the vehicle registered to Mr. Patterson in 1963.

The liability policy provided 'Coverage A--Bodily Injury Liability' and 'Coverage B--Property Damage Liability' and contained the following pertinent provisions:

'An automobile, ownership of which is acquired by the named insured or his spouse, if a resident of the same household, if it replaces an automobile owned by either and covered by this policy, or the company insures all automobiles owned by the named insured and such spouse on the date of its delivery, and the named insured or such spouse notifies the company within thirty days following such date of delivery; But such notice is not required under coverages A and B and Division 1 of Coverage C If the newly acquired automobile replaces an owned automobile covered by this policy.' (Emphasis supplied.)

On the foregoing evidence a special verdict was submitted to the jury on the following question: 'Did the 1950 Cadillac purchased by Earl J. Patterson, in April or May 1961, replace the 1950 Buick owned by him at that time?' The verdict was 'yes.'

Following the verdict, the court entered an 'interlocutory judgment' decreeing that Mrs. Patterson was covered under the liability policy, should be reimbursed for attorneys' fees, costs and expenses in defending the principal actions, and was entitled to indemnification in accordance with the terms of the policy for any damages which may be awarded in those actions. The court retained jurisdiction to award Mrs. Patterson such additional attorneys' fees and expenses which she may incur in the defense of the principal actions as well as in the prosecution of the cross-complaint.

Following entry of the 'interlocutory judgment,' stipulated judgments were entered in the two principal actions awarding plaintiffs therein damages with a stay of execution until the judgment on the cross-complaint became final.

Thereafter trial on the cross-complaint was reopened for the purpose of taking evidence on the amounts of any additional attorneys' fees, costs and expenses incurred by Mrs. Patterson. The court made findings of fact and conclusions of law and entered judgment in favor of Mrs. Patterson indemnifying her for the judgments entered in the principal actions and awarding her attorneys' fees totalling $1,864.40. Of the latter sum, $1,314.40 represented attorneys' fees incurred in the prosecution of the cross-complaint. Appellant appeals from the judgment on the cross-complaint.

Appellant contends: (1) The court erred in submitting the special verdict to the jury; (2) the uncontradicted evidence established, as a matter of law, that the 1950 Cadillac did not 'replace' the 1950 Buick within the meaning of the liability policy; and (3) the court erred in awarding attorneys' fees incurred in prosecuting the cross-complaint.

I

The thrust of appellant's contention respecting the propriety of submitting the special verdict to the jury is that the cross-complaint was an action for declaratory relief and as such, was an equitable proceeding in which a jury trial is discretionary and extends only to factual issues. On that premise appellant contends that the issue of replacement should not have been submitted to the jury.

Insofar as the right to a jury trial is concerned, it is erroneous to say that all declaratory relief actions are equitable; an action for declaratory relief has been characterized as 'sui generis.' (Veale v. Piercy, 206 Cal.App.2d 557, 560--561, 24 Cal.Rptr. 91.) Where an action for declaratory relief is in effect used as a substitute for an action at law for breach of contract, a party is entitled to a jury trial as a matter of right. (State Farm Etc. Ins. Co. v. Superior Court, 47 Cal.2d 428, 431--432, 304 P.2d 13; Allstate Ins. Co. v. Normandie Club, 221 Cal.App.2d 103, 105--106, 34 Cal.Rptr. 280.) "* * * (C)ourts will not permit the declaratory action to be used as a device to circumvent the right to a jury trial in cases where such right would be guaranteed if the proceeding were coercive rather than declaratory in nature." (State Farm Etc. Ins. Co. v. Superior Court, Supra, 47 Cal.2d p. 432, 304 P.2d p. 15; Witkin, California Procedure (1967 Supp.) p. 678; Comment (1959) 6 U.C.L.A.L.Rev. 678, 688.) In both State Farm Etc. Ins. Co., supra, and Allstate, supra, an insurance company brought an action for declaratory relief to determine coverage under a liability policy and its obligation to defend a personal injury action brought against the insured. In each case the court held that a jury trial was a matter of right. ² The instant case is indistinguishable. The cross-complaint for indemnity was instituted because appellant refused to provide defense for the personal injury actions as required by the policy, asserting a legal, rather than an equitable defense for its noncompliance. A jury trial was thus a matter of right.

II

Appellant urged in the court below and now contends that the fact that the insured retained ownership of the replaced vehicle for some period of time as a matter of law precluded automatic coverage of the newly acquired vehicle. Appellant, therefore, contends there were no factual issues to submit to the jury and that judgment should have been entered in its favor. The validity of this contention turns on the meaning of the word 'replace' as used in the policy.

Although extrinsic evidence is admissible in interpreting an ambiguous provision of an insurance policy (see Delta Dynamics, Inc. v. Arioto, 69 Cal.2d 525, 528, 72 Cal.Rptr. 785, 446 P.2d 785; Pacific Gas & Electric Co. v. G. W. Thomas Drayage etc. Co., 69 Cal.2d 33, 37--40, 69 Cal.Rptr. 561, 442 P.2d 641), no extrinsic evidence on the meaning of the word 'replace' was introduced in the instant case. In these circumstances the proper interpretation of the word presents a question of law which a reviewing court must determine independently of any construction placed upon it by the trial court. (United States Leasing Corp. v. Dupont, 69 Cal.2d 275, 290, 70 Cal.Rptr. 393, 444 P.2d 65; Parsons v. Bristol Development Co., 62 Cal.2d 861, 865--866, 44 Cal.Rptr. 767, 402 P.2d 839.)

Under an...