Plant Insulation Co. v. Fibreboard Corp.

• Decision Date: 16 October 1990
• Docket Number: No. A049252,A049252
• Citation: 224 Cal.App.3d 781,274 Cal.Rptr. 147
• Court: California Court of Appeals Court of Appeals
• Parties: PLANT INSULATION COMPANY, Plaintiff and Appellant, v. FIBREBOARD CORPORATION, Defendant and Respondent.

Page 147

274 Cal.Rptr. 147

224 Cal.App.3d 781

PLANT INSULATION COMPANY, Plaintiff and Appellant, v. FIBREBOARD CORPORATION, Defendant and Respondent.

No. A049252.

Court of Appeal, First District, Division 5, California.

Oct. 16, 1990.

Barnum, Balthazar, De Lara & Nielsen, James C. Nielsen, Christine Balthazar, San Francisco, for plaintiff and appellant.

Brobeck, Phleger & Harrison, Kelly C. Wooster, John E. Carlson, Kevin MacDougald, San Francisco, for defendant and respondent.

HANING, Associate Justice.

Plaintiff/appellant Plant Insulation Company appeals an order dismissing its breach of contract and indemnity action against defendant/respondent Fibreboard Corporation with respect to numerous pending actions in which appellant and respondent are named defendants by plaintiffs alleging personal injuries and wrongful death resulting from exposure to asbestos. Appellant contends the court misapplied the doctrine of exclusive concurrent jurisdiction.

FACTS AND PROCEDURAL HISTORY

Appellant is an industrial insulation contractor and installer and distributor of respondent's and other manufacturers' insulation products. In certain areas of California and Nevada it has been the exclusive distributor since 1948 of asbestos products manufactured by respondent. Since the 1970's, asbestos claimants have sued appellant and respondent in approximately 4,000 suits alleging bodily injury and death from asbestos exposure. In 1983 appellant, respondent and respondent's liability insurer executed an agreement in which the insurer agreed to defend and indemnify appellant in all asbestos cases covered by the insurer in which both appellant and respondent were named as defendants, and in which appellant's liability was based on appellant's "passive negligence as a seller of [respondent's] asbestos-containing products." In return for the defense and indemnity coverage, appellant paid a case-handling fee. Respondent declares, and appellant does not dispute, that the 1983 agreement terminated in June 1985.

In 1988 Far West Financial Corp. v. D & S Co. (1988) 46 Cal.3d 796, 251 Cal.Rptr. 202, 760 P.2d 399 held that tort defendants who entered into good faith settlements under Code of Civil Procedure sections 877 through 877.6 ¹ were absolved of any further liability to codefendants for all equitable indemnity claims, including total equitable indemnity. Thereafter, respondent revised its settlement releases to provide that its distributors were not released if a good faith settlement barred indemnity claims. The result was that respondent stopped covering appellant in settlements in asbestos cases in which both were named as defendants.

Subsequently, respondent sought and obtained good faith determinations (§§ 877-877.6) of its settlements with asbestos plaintiffs in several actions, thus barring cross-complaints for indemnity filed against it therein by appellant. At the time, over one thousand of appellant's cross-complaints were pending in asbestos suits against respondent in various Bay Area counties.

In December 1989 appellant filed the instant action in Marin County. Although appellant alleges several theories, including breach of contract, breach of the covenant of good faith and fair dealing, implied contractual indemnity, total equitable indemnity and declaratory relief, appellant essentially seeks to prevent respondent from entering into good faith settlements with plaintiffs in the asbestos suits. The cause of action for breach of contract alleges respondent's breach of the parties' 1948 distributorship agreement. Appellant alleges that pursuant to the distributorship agreement respondent bore the burden of defending and settling asbestos suits on appellant's behalf and has breached the agreement by refusing to do so. The sixth cause of action for breach of contract alleges respondent's breach of a written "apportionment of liability" agreement (apportionment agreement), executed in the late 1970's, pursuant to which respondent allegedly was required to settle asbestos suits on appellant's behalf. The complaint seeks damages and a declaration of the rights and responsibilities of the parties as to the asbestos suits pursuant to the distributorship agreement, apportionment agreement, and the doctrine of total equitable indemnity. Appellant also petitioned the trial court to enjoin respondent from (1) commencing or pursuing good faith settlement proceedings in any other court, and (2) from prosecuting its cross-complaints in the pending asbestos actions.

In connection with its filing of the instant action, appellant sought to avoid a demurrer on the ground of "another action pending" (§ 430.10, subd. (c)) by dismissing without prejudice all of its indemnity cross-complaints against respondent in the pending asbestos cases. Thereafter, respondent cross-complained against appellant in the pending asbestos suits for indemnity and declaratory relief. Respondent's cross-complaints allege in part that it owes appellant no duty to defend or settle the asbestos suits and never incurred such duty under the distributorship agreement or any other agreement. Respondent moved for abatement and/or dismissal of appellant's complaint on the ground it involves asbestos suits pending in other California courts which have exclusive, prior jurisdiction over the controversies. Respondent also sought a stay of the complaint as to asbestos cases in other states and federal courts as a matter of comity, and to avoid multiple litigation. In addition, respondent demurred and moved to strike the complaint for lack of jurisdiction, as well as on the merits.

Following a hearing on respondent's motion the trial court dismissed the complaint without prejudice with respect to asbestos suits pending in other California courts, based on its determination that the doctrine of exclusive concurrent jurisdiction applied because the subject matter arose out of the same transaction, there were no issues presented that could not be determined in the pending asbestos suits, and all parties were already before the court in those suits. The court stayed the instant action with respect to asbestos suits pending in other states and federal courts. With respect to asbestos suits pending in Marin County, the instant action was dismissed without prejudice and appellant was granted leave to file it as a cross-complaint in those suits. The court found it unnecessary to rule on respondent's demurrer and motion to strike, and ordered appellant's injunction applications off calendar. Only the court's ruling on the dismissal and abatement motion is at issue on appeal.

DISCUSSION

Appellant contends the court misapplied the rule of exclusive concurrent jurisdiction in dismissing appellant's action with respect to asbestos suits pending in California courts.

Under the rule of exclusive concurrent jurisdiction, "when two superior courts have concurrent jurisdiction over the subject matter and all parties involved in litigation, the first to assume jurisdiction has exclusive and continuing jurisdiction over the subject matter and all parties involved until such time as all necessarily related matters have been resolved." (California Union Ins. Co. v. Trinity River Land Co. (1980) 105 Cal.App.3d 104, 109, 163 Cal.Rptr. 802 (California Union ); see also, Lawyers Title Ins. Corp. v. Superior Court (1984) 151 Cal.App.3d 455, 460, 199 Cal.Rptr. 1 (Lawyers Title ); Myers v. Superior Court (1946) 75 Cal.App.2d 925, 929, 172 P.2d 84; 2 Witkin, Cal. Procedure (3d ed. 1985) Jurisdiction, § 341.) The rule is based upon the public policies of avoiding conflicts that might arise between courts if they were free to make contradictory decisions or awards relating to the same controversy, and preventing vexatious litigation and multiplicity of suits. (Childs v. Eltinge (1973) 29 Cal.App.3d 843, 849, fn. 7, 105 Cal.Rptr. 864; accord, Greene v. Superior Court (1951) 37 Cal.2d 307, 311, 231 P.2d 821; San Bernardino, etc., Water Dist. v. Gage Canal Co. (1964) 226 Cal.App.2d 206, 212-213, 37 Cal.Rptr. 856.) The rule is established and enforced not "so much to protect the rights of parties as to protect the rights of Courts of co-ordinate jurisdiction to avoid conflict of jurisdiction, confusion and delay in the administration of justice." (Crowley v. Davis (1869) 37 Cal. 268, 269.) The rule of exclusive concurrent jurisdiction may constitute a ground for abatement of the subsequent action. (Lawyers Title, supra, 151 Cal.App.3d at p. 458, 199 Cal.Rptr. 1; California Union, supra, 105 Cal.App.3d at pp. 108-109, 163 Cal.Rptr. 802.) "An order of abatement issues as a matter of right not as a matter of discretion where the conditions for its issuance exist." (Lawyers Title, supra, 151 Cal.App.3d at p. 460, 199 Cal.Rptr. 1.) However, abatement is not appropriate where the first action cannot afford the relief sought in the second. (Id., at p. 459, 199 Cal.Rptr. 1; see also Childs v. Eltinge, supra, 29 Cal.App.3d at pp. 847-848, 105 Cal.Rptr. 864.)

A

Appellant first contends that exclusive concurrent jurisdiction does not exist because it and respondent were not adverse parties in the pending asbestos actions, but were codefendants. Appellant argues without citation of authority that the rule of exclusive concurrent jurisdiction "is a court-made liberalization" of the statutory plea in abatement (§ 430.10) and that application of both the plea in abatement and the rule of exclusive concurrent jurisdiction require a prior pending action between adverse parties. We disagree.

A plea in abatement pursuant to section 430.10, subdivision (c), may be made by demurrer or answer when there is another action pending between the same parties on the same cause of action. (Lawyers Title, supra, 151 Cal.App.3d at p. 459, 199 Cal.Rptr. 1; Childs v. Eltinge, supra, 29 Cal.App.3d at p. 848, 105 Cal.Rptr. 864.) In determining whether the causes of action are the same for purposes of pleas in...