Financial Indemnity Co. v. Colonial Insurance

BRAY, J.

Plaintiff sued for declaratory relief to determine the rights and obligations of the parties arising from two public liability policies issued respectively by the parties to one Charles Tamagri, a trucking service operator, and particularly to recover half of the amount expended by plaintiff for attorney’s fees and investigation expenses in defense of an action against the insured. Plaintiff appeals on an agreed statement of facts from the judgment denying recovery.

Questions Peesented

Defendant contended that prior to the accident upon which the action against the insured was based its policy had been cancelled and avoided. As the trial court found against defendant on this defense and defendant has not appealed, we deem it unnecessary to discuss this contention.

The principal question is: Where policies of separate insurers provide for defense of the assured in ease of suit, is one insurer entitled to contribution from the other insurer for expenses incurred in defense of a personal injury action brought against the assured?

Facts

Both parties are California insurance corporations. Each delivered to Tamagri and filed with the Public Utilities Commission a policy of public liability insurance, $10,000-$20,000 personal injury and $5,000 property damage, and provided for defense of the assured in the event of suit. Defendant’s policy was first in time of issue. Tamagri, driving a vehicle covered by both policies, was involved in an accident with an auto driven by Louis A. Ortiz, in which accident both Tamagri and Ortiz were killed. Ortiz’s administratrix sued Tamagri’s estate for Ortiz’s death. Tamagri’s administrator cross-complained for Tamagri’s death. After two trial’s Tamagri’s administrator obtained judgment for $20,000. Approximately one year and five months after the accident occurred de

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fendant was informed by the manager of plaintiff of the pending lawsuit against the assured and requested to participate therein. Defendant refused. In the defense of the litigation plaintiff incurred expenses in the sum of $5,799.76. Defendant refused to pay any portion thereof.