Roylance v. Doelger

• Citation: 19 Cal.Rptr. 7,57 Cal.2d 255,368 P.2d 535
• Court: United States State Supreme Court (California)
• Decision Date: 25 January 1962
• Parties: , 368 P.2d 535 R. Walker ROYLANCE et al., Cross-complainants and Appellants, v. Henry DOELGER et al., Cross-defendants and Respondents. 1 S. F. 20338.

Page 7

19 Cal.Rptr. 7

57 Cal.2d 255, 368 P.2d 535

R. Walker ROYLANCE et al., Cross-complainants and Appellants, v. Henry DOELGER et al., Cross-defendants and Respondents. ¹

S. F. 20338.

Supreme Court of California, In Bank.

Jan. 25, 1962.

Wallace, Garrison, Norton & Ray and Philip M. Madden, San Francisco, for cross-complainants and appellants.

Ropers, Majeski & Kane, Redwood City, and Cyril Viadro, San Francisco, for cross-defendants and respondents.

SCHAUER, Justice.

In this liability insurance litigation defendant (certain Underwriters at Lloyds, London, hereinafter called Lloyds) filed an answer together with a cross-complaint seeking declaratory relief and naming as cross-defendants new third parties. ¹ The trial court granted the motion of such new parties to strike the cross-complaint, and defendant appeals. We have concluded that striking of the cross-complaint was erroneous under the circumstances, and that the order appealed from should be reversed.

Plaintiff corporation, against whom a judgment of $5,116.07 for property damages had been rendered in favor of, and paid by itself to, the property owners, Mr. and Mrs. Bullis, then instituted the present action to recover from its liability insurance carrier, defendant Lloyds, the $5,116.07 together with costs and attorney fees incurred by plaintiff in defending the Bullis action. Defendant filed an 'Answer and Cross-Complaint for Declaratory Relief,' naming as sole cross-defendants new third parties to the action, Henry Doelger and Thelma Doelger.

The answer set forth a general denial of liability under the insurance policy admittedly issued by defendant Lloyds to plaintiff corporation, and also pleaded two special defenses. In the first such defense defendant insurer admitted delivery to it by plaintiff herein of the summons and complaint in the Bullis action against plaintiff, but alleged that defendant 'tendered the defense thereof * * * to Henry Doelger and Thelma Doelger (now named as cross-defendants) * * * (who) thereafter * * * accepted said tender of defense and undertook to defend plaintiff in said action, and that by reason of said tender * * * and * * * acceptance' defendant had performed under the insurance policy. In the second special defeense defendant pleaded that payment by plaintiff of the Bullis judgment against plaintiff constituted a breach by plaintiff of policy conditions prohibiting a voluntary settlement of claims, and thereby excused defendant from further performance under the insurance policy.

In the cross-complaint defendant insurer alleges as a first cause of action that (1) the Bullis action was based on the claim that plaintiff herein, and others, excavated on land belonging to the new third-party cross-defendants (Henry and Thelma Doelger) and situated adjacent to the Bullis land, thereby removing lateral support for the latter and causing it to collapse; (2) the excavations were performed by plaintiff corporation (defendant's insured) 'under the supervision, direction and control' of cross-defendant, who thereafter negligently failed to provide lateral support for the Bullis property; (3) cross-defendants 'are the persons primarily liable to Bullis for the injury the said Bullis suffered,' as plaintiff corporation was not negligent in performing the excavations and 'is only secondarily liable to Bullis' and 'entitled to indemnity over against cross-defendants' for any liability to Bullis; (4) if plaintiff recovers from defendant the amount paid to Bullis, then defendant insurer will be subrogated to plaintiff's alleged right to indemnity from cross-defendants.

As a second cause of action against cross-defendants defendant insurer alleges that upon receipt from plaintiff herein (the insured) of the summons and complaint in the Bullis action defendant 'tendered the defense thereof to cross-defendants * * * (who) accepted said tender of defense, and thereby undertook to defend plaintiff * * * and to hold * * * plaintiff harmless from any liability which it might have to said Bullis'; that cross-defendants failed to carry out such hold-harmless agreement and that defendant is subrogated to plaintiff's rights against cross-defendants in the premises.

Defendant prayed for a declaration of the rights of the parties and that the court 'declare that if plaintiff' recovers from defendant that defendant then 'have judgment over in like amount against cross-defendants.'

Plaintiff is not a party to this appeal and seemingly raised no objection to the cross-complaint. Cross-defendants, however, moved to strike it on the ground that it 'is incompetent, irrelevant and immaterial, and constitutes an attempt to collaterally attack a final judgment.' The trial court granted the motion, and this appeal by defendant insurer followed.

As ground for reversal defendant asserts that the trial court abused its discretion in striking the cross-complaint because the allegations thereof are legally sufficient to give defendant a right to declaratory relief (citing Code Civ.Proc. § 1060, and Columbia Pictures Corp. v. DeToth (1945) 26 Cal.2d 753, 760(5), 161 P.2d 217, 162 A.L.R. 747). Although cross-defendants do not dispute this latter proposition, they argue that because the cross-complaint seeks declaratory relief 'the Court has discretion not to entertain it as part of the main action.' The question at issue before us is thus not the sufficiency of defendant's allegations to state a cause of action for declaratory relief and for the judgment over, sought against cross-defendants, but, rather, whether under the circumstances defendant is entitled to seek such relief through the medium of a cross-complaint.

Section 442 of the Code of Civil Procedure, as amended in 1957, provides that 'Whenever the defendant seeks affirmative relief against any person (formerly 'party'), whether or not a party to the original action, relating to or depending upon the contract, transaction, matter, happening or accident upon which the action is brought * * * he may, in addition to his answer, file * * * a cross-complaint. The cross-complaint must be served upon the parties affected thereby, and such parties may demur or answer thereto, or file a notice of motion to strike the whole or any part thereof. * * *.' (Italicized language was added in 1957.)

Cross-defendants, citing Weissman v. Lakewood Water & Power Co. (1959) 173 Cal.App.2d 652, 343 P.2d 776, urge in support of the order striking the cross-complaint, that the issues tendered by the complaint and the answer thereto 'can be disposed of in a very short and very simple trial,' whereas those between defendant and cross-defendants are 'much more complicated,' and there is no reason why they should be tried at the same time.

In Weissman plaintiff sued the City of Long Beach and two other defendants for personal injury damages. The city answered and filed a cross-complaint against its two codefendants alleging they were responsible for the condition which caused plaintiff's injuries and seeking a declaratory judgment that the city was entitled to be indemnified by its codefendants in the amount of any judgment rendered against it. One codefendant answered, and the other filed a demurrer to the cross-complaint which was sustained and the cross-complaint dismissed. On appeal by the city the court noted (p. 655(1) of 173 Cal.App.2nd, 343 P.2d 776) that 'the sole question for our decision is whether it was an abuse of discretion to decline to entertain the city's cross-complaint for relief in the present action by means of a declaratory judgment' and ruled that 'the trial court properly declined to try the issues tendered by the cross-complaint as 'not necessary or proper at the time under all the circumstances. " (P. 658(7b) of 173 Cal.App.2d, 343, P.2d 776.) The ruling therefore appears to have been limited by the court itself to the circumstances of that case.

Defendant insurer relies upon Sattinger v. Newbauer (1954) 123 Cal.App.2d 365, 266 P.2d 586 (by the same court), in which, in an action for damages for breach of contract, one defendant filed a cross-complaint against the other, seeking a declaration that any obligation to plaintiff was that of the cross-defendant only. The trial court sustained a demurrer to the cross-complaint without leave to amend. On appeal the court in reversing ruled that 'were we, in the position of trial judges, called upon to decide the question, we would regard a denial of the right to prosecute a claim for declaratory relief upon the amended cross-complaint * * * as an abuse of discretion.' (P. 370 of 123 Cal.App.2d, 266 P.2d 586.) With this view we agree.

Further, in the light of the provisions of Code of Civil Procedure, section 442, expressly authorizing a defendant who seeks affirmative relief 'relating to or depending upon the contract, transaction, matter, happening or accident upon which the action is brought' to file a cross-complaint, we are persuaded that the view expressed for the court by Mr. Justice Dooling in Atherley v. MacDonald, Young & Nelson (1955) 135 Cal.App.2d 383, 287 P.2d 529 (which is consonant with that exemplified in Sattinger v. Newbauer (1954), supra, 123 Cal.App.2d 365, 266 P.2d...