United Services Automobile Ass'n v. Fidelity & Casualty Co.

AGEE, J.

Plaintiffs in this declaratory relief action appeal from a judgment of dismissal entered upon the sustaining of defendant’s demurrer to the complaint without leave to amend.

The complaint alleges the following facts: that on April 4, 1957, appellant Shugg was driving a Buick automobile which collided with another automobile; that a personal injury action arising out of this collision was filed against Shugg, Davis Realty Co. and others; that appellant insurance company (United) had issued its automobile liability insurance policy to Shugg and said policy was in full force and effect at the time of the accident; that a copy of said policy is attached to the complaint and made a part thereof; that respondent insurance company (Fidelity) had issued its " Comprehensive General-Automobile Liability Policy” No. SPL 68612 and said policy was in full force and effect at the time of the accident; that a copy of this policy is also attached to the complaint and made a part thereof; that Shugg demanded that each of said insurance companies undertake to defend him in said personal injury action pursuant to the

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provisions of the respective policies; that Fidelity refused to do so; that United undertook to and did defend Shugg in said action; that United settled the claims against Shugg for $35,000; that due to the dangerous potential of said case said settlement was reasonably dictated; that United expended the reasonable sum of $3,951.46 in its defense of said action on behalf of Shugg; that Fidelity has refused to contribute anything to said settlement or to said costs of defense.

Appellants, Shugg and United, pray for a declaration of their rights under the two policies and a money judgment against Fidelity for $17,500 as its pro rata share of the settlement plus one-half of $3,951.46 as its pro rata share of the costs of defense.

United’s policy was issued to Shugg and his wife under their names alone and specifically describes the Buiek automobile which Shugg was driving at the time of the accident. Shugg makes no claim that United has not fulfilled its obligations to him under its said policy.

Fidelity’s policy does not describe any specific automobiles and its position is that its policy is limited to Davis Realty Co., Shugg’s employer. Accordingly, it has defended said company throughout the litigation. After all other defendants in the personal injury action had settled out by way of covenants, plaintiffs therein proceded to trial against Davis Realty Co. alone. This resulted in a verdict in favor of Davis. The judgment entered thereon was reversed on appeal.