Industrial Indemnity Co. v. Mazon

California Court of Appeal Jul 30, 1984 No. Civ. 69104Published

Before: Feinerman

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Holding. The court held that a claimant's cause of action against an insurer for unfair claims practices does not accrue until the underlying action against the insured has reached a final conclusion, and therefore the cross-complaint was premature.

Issues

Whether a claimant may maintain a cross-complaint for unfair insurance practices against an insurer while the underlying personal injury action against the insured is still pending.
Whether the compulsory cross-complaint rule bars a future action if the current action is for declaratory relief.

Disposition. affirmed

Quotations verified verbatim against the opinion

“a claimant’s cause of action against the insurer does not accrue until the time that suit may be brought—in other words, until the action between the claimant and the insured has reached a final conclusion.”

“His cross-complaint is not ripe because the underlying personal injury action has not yet been resolved”

[864]

Opinion

FEINERMAN, P. J.

Arnold Mazon (Mazon) appeals from an order of dismissal of his cross-complaint entered after the demurrer of cross-defendant Industrial Indemnity Company (Industrial) to Mazon’s cross-complaint was sustained without leave to amend. We affirm the order of dismissal.

Facts

Mazon is the sole shareholder of Mazon Landscape Company, Inc. (Corporation). Industrial had issued a general liability policy to Corporation covering the third party liability of Corporation for bodily injury or property damage caused by an occurrence and arising out of the business of the insured. Both Mazon and Gilbert Tellez, Jr. (Tellez) were employed by Corporation. On April 14, 1979, Mazon was injured in an automobile accident while a passenger in a vehicle owned and driven by Tellez. Mazon filed suit for personal injury and loss of earnings on March 21, 1980, naming Tellez and Does I through XX as defendants. He subsequently amended the complaint to name Corporation as a defendant, alleging that Tellez was driving the vehicle in the course and scope of his employment and consequently Tellez’s negligence must be imputed to Corporation. In December 1981, Corporation requested that Industrial defend in the personal injury suit and pay Mazon’s claims.

On November 2, 1982, Industrial filed a complaint for declaratory relief, naming Corporation and Mazon as defendants. Industrial asserted its policy provided no coverage for the accident because (1) the corporate entity was a sham and in reality does not exist, and therefore Mazon purports to sue himself, and (2) the policy excludes coverage for an injury to an employee injured in the course and scope of his employment, and, if Corporation is a valid entify, Mazon, as well as Tellez, was acting within the course and scope of his employment at the time of the accident and thus could not assert a claim under the policy.

Mazon then filed his cross-complaint for unfair insurance claims practices (Ins. Code, § 790.03) and intentional infliction of emotional distress. He alleged that Industrial refused to effectuate prompt, fair and equitable settlement of Mazon’s claim against Corporation.

Industrial demurred to the cross-complaint. It requested the trial court to take judicial notice of the action pending between Mazon and Corporation, contending that Mazon cannot assert its causes of action against Industrial until the underlying personal injury action is resolved. The demurrer was sustained without leave to amend, and the cross-complaint was dismissed.

Industrial Indemnity Co. v. Mazon

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FEINERMAN, P. J.

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