Travelers Insurance v. Industrial Indemnity Co.

[630]

Opinion

STONE, P. J.

Indemnity Company (Industrial) appeals from a summary judgment in favor of Travelers Insurance Company (Travelers) which judgment is grounded upon the theory of contribution arising from a risk covered by policies written by both companies for Evans Telephone Company. Industrial issued to Evans a workmen’s compensation and employer’s liability policy, while Travelers issued to Evans a general liability policy. Both were in effect on December 8, 1949, when Melvin Williams, an employee of Evans, came into contact with a Pacific Gas & Electric Company wire and sustained serious injuries. Industrial paid Williams compensation under the workmen’s compensation provisions of its policy, including medical expenses. Williams later sued P. G. & E. for damages resulting from his injuries, and recovered $226,920.09.

In April 1962, P. G. & E. sued Evans on the theory of implied indemnity, Evans tendered defense of the action to its general liability carrier, Travelers, and Travelers provided a defense. On July 2, 1963, Evans and Travelers made demand on Industrial to join with Travelers in defense of the action. Industrial refused, on ground that its policy did not cover actions against Evans, the insured employer, by third parties seeking indemnity for damages paid to an Evans employee.

In Márch 1967, Travelers and Evans settled with P. G. & E. by payment of $15,0.00, first securing a stipulation from Industrial that the settlement would not prejudice Travelers’ claim for contribution from Industrial. Travelers then filed the instant action against Industrial, seeking to recover a pro rata share of the $15,000 paid to P. G. & E. and of the $17,028.18 attorneys’ fees and costs incurred in the suit.

Both Travelers and Industrial moved for a summary judgment on the pleadings. The trial judge denied Industrial’s motion, granted Travelers’ motion insofar as it sought a pro rata share of contribution from Industrial of the $15,000 paid by Travelers to P. G. & E. by way of settlement, but left for trial the issue of the amount and reasonableness of attorneys’ fees and expenses incurred by Travelers. By stipulation, the amounts and reasonableness of attorneys’ fees and costs were resolved and the trial court was requested to enter a judgment without further trial. Judgment was thereafter entered in favor of Travelers, against Industrial, in the sum of $22,691 with prejudgment interest. This appeal followed.