Teachers Insurance Co. v. Smith

Opinion

ROTH, P. J.

On September 27, 1976, Todd Smith, a minor, was seriously injured when his bicycle collided with an automobile driven by Marian Fine. He incurred medical expenses of approximately $7,000. Respondents Richard and Shirley Smith made a demand and claim on Marian and Gordon Fine on behalf of Todd, their son, for his personal injuries and damages. The Fines had a public liability insurance policy with appellant Teachers Insurance Company which provided coverage for the accident. Accordingly, the Fines presented the claim to appellant. Appellant negotiated with respondents and settled the claim for its full policy limits of $15,000. That settlement subsequently was approved by the superior court. Thereafter, appellant, which became subrogated to its insureds’ rights, brought this action for partial indemnity against respondents.

The first amended complaint alleged, inter alia, that respondents had failed to exercise ordinary care in training and supervising Todd’s bicycle riding activities, and as a proximate result thereof, appellant incurred damages in the amount of $16,000; namely, $15,000 for settlement and $1,000 in expenses connected with the claim. Further, the complaint alleged that Marian Fine had not been negligent, but should the court find her negligent, damages should be apportioned between her and respondents according to principles of comparative negligence.

Respondents demurred on the ground appellant was a “volunteer” and had “unilaterally” entered into the settlement, with the result that indemnity would not lie. The demurrer was sustained on this ground without leave to amend, and the action was dismissed. This appeal followed. We reverse.

[865]

As pointed out by appellant, our Supreme Court, in

American Motorcycle Assn.

v.

Superior Court

(1978) 20 Cal.3d 578 [146 Cal.Rptr. 182, 578 P.2d 899], modified the so-called “equitable indemnity” rule in light of their earlier decision in

Li