Spiva v. Phoenix Indemnity Co.

[497]

PEEK, J.

Defendant Phoenix Indemnity Company appeals from a judgment of the trial court entered pursuant to plaintiff’s motion for judgment on the pleadings.

In September of 1952 defendant issued a liability insurance policy to plaintiff covering his business operations. By the terms of that policy defendant, among other things, agreed: “To pay on behalf of the Insured all sums which the Insured shall become obligated to pay by reason of the liability imposed upon him by law for damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the hazards hereinafter defined.” The policy also provided that defendant “. . . shall (a) defend in his name and behalf any suit against the Insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the company shall have the right to make such investigation, negotiations and settlement of any claim or suit as may be deemed expedient by the Company.”

In April of 1953, as a result of work then being done by plaintiff, certain liability claims for damages were asserted against him. Defendant was duly notified but refused to defend said claims upon the ground that they did not come within the coverage afforded by the policy. Plaintiff thereupon engaged his own attorney to defend the claims at the cost to him of $250. In addition plaintiff instituted an action against defendant for declaratory relief wherein he sought a declaration of the extent of the coverage under the policy. The judgment which was in favor of plaintiff provided:

“(a) That defendant is hereby required to afford to the plaintiff all of the rights and benefits of the named ‘insured’ under the terms of defendant’s policy No. SM 30315 for and during the period extending from September 12, 1952 to and including September 12, 1953, specifically including any and all lawful claims established by the owners of any property which was damaged by plaintiff’s operations on a certain parking lot in Merced, California, during April 1953;

“(b) That defendant is hereby required to perform all of its duties and obligations owing to plaintiff as the named ‘insured’ under the terms of defendant’s policy No. SM 30315 during the policy period from September 12 1952 to September 12, 1953.”