Webster v. Superior Court (Bunner)

• Decision Date: 11 June 1987
• Citation: 237 Cal.Rptr. 664,192 Cal.App.3d 703
• Court: California Court of Appeals Court of Appeals
• Parties: Previously published at 192 Cal.App.3d 703 192 Cal.App.3d 703 Robert L. WEBSTER, Jr., et al., Petitioners, v. SUPERIOR COURT of the State of California for the County of Los Angeles, Respondent. Bruce BUNNER, as Insurance Commissioner, etc., et al., Real Parties in Interest. B023084.

Page 664

237 Cal.Rptr. 664

Previously published at 192 Cal.App.3d 703

192 Cal.App.3d 703

Robert L. WEBSTER, Jr., et al., Petitioners, v. SUPERIOR COURT of the State of California for the County of Los Angeles, Respondent Bruce BUNNER, as Insurance Commissioner, etc., et al., Real Parties in Interest.

B023084.

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

June 11, 1987.

Review Granted Sept. 3, 1987.

Tuohey and Prasse, Conrad G. Tuohey and Teresa M. Ferguson, Santa Ana, for petitioners.

No appearance for respondent.

John K. Van de Kamp, Atty. Gen., Raymond B. Jue, Deputy Atty. Gen., Los Angeles, Lynch, Loofbourrow, Helmenstine, Gilardi & Grummer, San Francisco, Jane A. Corning, Burlingame, Barger & Wolen, John C. Holmes and Royal Oakes, Los Angeles, for real parties in interest.

FEINERMAN, Presiding Justice.

In this original proceeding, petitioners Robert L. Webster, et al., plaintiffs in a superior court action against real party Enterprise Insurance Co. (Enterprise), seek relief from an injunction imposed in connection with the conservatorship and subsequent liquidation proceedings of Enterprise, the effect of which was to stay the prosecution of all actions against Enterprise. We granted an alternative writ at the direction of the Supreme Court pursuant to an order made by the court on November 26, 1986. We now hold that the respondent court did not abuse its discretion in denying petitioners' request to lift the stay, and that petitioners must seek relief through the claims procedures provided by the California Insurance Code.

FACTS

On January 28, 1982, petitioner Robert Webster was employed by Enterprise at its offices in the One Market Plaza building in San Francisco. On that date, Ricardo Contawe (Contawe), the estranged husband of another Enterprise employee, entered the offices of Enterprise, pulled a shotgun from a white flower box, and proceeded to shoot his wife Erlinda and others. He continued to run through the 17th and 18th Mr. Webster, who had taken cover under his desk, managed to call the "911" emergency number. While Webster was on the telephone undergoing extensive questioning by the emergency operator, Contawe rounded the corner by Webster's office, cursed Webster for calling the police and proceeded to shoot Webster in the small of the back at close range. Webster, who had already lost a leg and the sight in one eye while serving in Vietnam, suffered severe internal injuries as a result of the shooting, spent almost eight months in the hospital, and lost the use of his remaining leg.

floors of the building, continuing his shooting spree and shouting obscenities.

Webster, his wife and daughter, filed an action in San Francisco Superior Court against the owners of One Market Plaza (The Equitable Life Assurance Society of the United States, et al.), Erlinda Contawe, the Estate of Ricardo Contawe, and numerous Doe defendants. ¹ The defendants cross-complained against Mission Insurance Company (the parent company of Enterprise), Enterprise, Erlinda Contawe, the Estate of Ricardo Contawe, and Doe defendants.

Although the Websters did not initially name Enterprise as a defendant in their action, Enterprise was later named as a Doe defendant after discovery allegedly revealed that Enterprise had been warned about the dangerous propensities of Ricardo Contawe (including threats that included his wife's coworkers), and had failed to take any precautions or warn its employees of the threats.

During the pendency of these actions, Enterprise and its parent company, Mission, became insolvent. In November 1985, the Insurance Commissioner of the State of California (Commissioner) sought an order in Los Angeles Superior Court placing Enterprise under a conservatorship, pursuant to California Insurance Code section 1011. The superior court entered its "Order Appointing Conservator and Restraining Order" on November 26, 1985. The order provided, inter alia, "[t]hat all persons are hereby enjoined from maintaining or instituting any action at law or suit in equity, including but not limited to matters in arbitration, against [Enterprise] or against [the Insurance Commissioner] ..."

In May 1986, the Websters filed a "Motion for Relief from Stay" in Los Angeles Superior Court. The Websters alleged in their motion that Enterprise carried primary liability insurance in the amount of $500,000 and excess coverage in the amount of $20 million. They further alleged that until the stay had been imposed by the Los Angeles Superior Court, the litigation had been defended by counsel employed by Enterprise's liability insurance carriers. It was the Websters' position that any judgment obtained by them would not affect the assets of Enterprise, since the judgment would be covered by liability insurance.

The Commissioner (through the Attorney General) and Enterprise (through special counsel) opposed the motion on the grounds that (1) a lifting of the stay would interfere with the Commissioner's administration of Enterprise, (2) the Websters should not be given an unfair advantage over other claimants, ² and (3) the Websters were required to utilize the statutory claims procedures set forth in Insurance Code sections 1021 through 1027. The Commissioner and Enterprise also asserted that the uninsured assets of Enterprise were in fact threatened, since the Websters had not agreed to waive their claim for punitive damages (which are not covered by insurance).

The superior court denied the Websters' motion without prejudice to their filing a new motion if new facts were discovered. Without a showing of new facts, the Websters renewed their motion. The court denied the motion with prejudice and this petition followed.

During the pendency of this proceeding, the superior court entered an order initiating When the matter came before this court for oral argument, we questioned the Websters' counsel about the Websters' failure thus far to waive their claim for punitive damages. Counsel stated that the Websters would waive their claim for punitive damages and agreed to put that representation in writing. Counsel thereafter prepared a stipulation providing the following in addition to the Websters' waiver of any right to punitive damages: (1) the Websters would not proceed against any assets of Enterprise without seeking leave of court, (2) real parties warranted that Enterprise was covered by liability insurance (the policies are listed), (3) the stay would be lifted to allow the Websters to proceed with their action, (4) lifting of the stay as to the Websters would not affect the plaintiffs in any of the other actions, ³ (5) this court would enter a writ of mandate directing that the terms of the stipulation be carried out, and (6) a party which had to seek relief in court to enforce the terms of the stipulation would be entitled to reasonable attorneys' fees and costs. Real parties declined to sign the stipulation.

liquidation proceedings for Enterprise. (Ins.Code, § 1016.)

DISCUSSION

We preface our discussion of this case by noting that we have, with some difficulty, resisted the temptation to be "result-oriented" in this case. Only the most heartless individual could fail to empathize with the Webster family, whose lives have been plagued by misfortune. However, no matter where our sympathies lie, w...