Travelers Property Casualty Company Of America v. Liberty Surplus Insurance Co.

Filing 46

ORDER RE: CROSS MOTION FOR PARTIAL SUMMARY JUDGMENT signed by Senior Judge William B. Shubb on 4/4/2018. (Kirksey Smith, K)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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TRAVELERS PROPERTY CASUALTY
COMPANY OF AMERICA, a
Connecticut corporation,

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Plaintiff,
v.

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ORDER RE: CROSS MOTION FOR
PARTIAL SUMMARY JUDGMENT

LIBERTY SURPLUS INSURANCE
CO., a Massachusetts
corporation; and DOES 1
through 10 inclusive,
Defendants.

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CIV. NO. 2:16-2752 WBS EFB

On March 30, 2018, the parties stipulated that the
briefing on defendant Liberty’s summary judgment motion could be
deemed a cross motion for summary judgment by plaintiff
Travelers.

At the hearing on April 2, 2018, the court heard

arguments on the cross motion and took it under submission.

For

the reasons previously explained by the court in its February 22,
2018 order denying summary judgment for defendant (Docket No.
33), the court concludes that plaintiff is entitled to partial
summary judgment on the submitted issue of liability and rules,

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as a matter of law, that (1) defendant had a duty to defend Dura;

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(2) defendant had a duty to indemnify Dura; and (3) plaintiff has

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a right to recover equitable contribution from defendant for the

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defense and settlement costs plaintiff paid on behalf of Dura.

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Under California law, the right to contribution arises

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when several insurers are obligated to defend the same loss or

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claim and one insurer pays more than its share of the loss.

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Fireman’s Fund Ins. Co. v. Md. Cas. Co., 65 Cal. App. 4th 1279,

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1293 (1st Dist. 1998).

See

“The purpose of this rule of equity is

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to accomplish substantial justice by equalizing the common burden

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shared by coinsurers, and to prevent one insurer from profiting

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at the expense of others.”

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Reinsurance Am. Corp., 757 F. Supp. 2d 952, 956 (N.D. Cal. 2010)

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(citing Fireman’s Fund Ins. Co., 65 Cal. App. 4th at 1293).

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Mt. McKinley Ins. Co. v. Swiss

Most significantly to this motion, California courts

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have noted that “[i]t would be wholly capricious if some insurers

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could avoid liability for contribution by exploiting the

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corporate suspension of an insured . . . leaving other insurers

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to bear the loss, but barred from recovering equitable

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contribution.”

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Angeles, 60 Cal. App. 4th 342, 347 (2d Dist. 1997).

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“equity dictates that each primary carrier should bear some

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proportion of the ultimate burden of liability.”

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Co. v. City of Palos Verdes Estates, 46 Cal. App. 4th 1810, 1861

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(2d Dist. 1996).

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exist regardless of whether the insured is a suspended

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corporation.

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Truck Ins. Exchange v. Superior Court of Los
Simply put,

Stonewall Ins.

The court concludes that this obligation must

Accordingly, the court determines as a matter of law
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that plaintiff and defendant were both obligated to defend and

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indemnify Dura, and thus there was a “common obligation that is

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legally due from multiple insurers,” thereby providing a basis

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for contribution.

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App. 4th 929, 937 (2d Dist. 2001).

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Am. Cont’l Ins. Co. v. Am. Cas. Co., 86 Cal.

If the parties wish to stipulate to the amount of

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damages to which plaintiff is entitled under this Order, and

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preserve the right to appeal from the court’s decision on

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liability as set forth in this Order, the court will approve such

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a stipulation.

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IT IS SO ORDERED.
Dated:

April 4, 2018

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