Walker v. Pacific Indemnity Co.

DRAPER, J.

When does a cause of action accrue against an insurance broker who negligently secures automobile liability insurance in an amount less than that ordered by the car owner f That is the sole question presented by this appeal.

[515]

On March 17, 1952, one Merrill ordered an insurance policy covering operation of his logging truck with limits up to $50,000 for bodily injury to one person. Defendant Fulmore, Merrill’s broker, accepted the order but secured a policy with limits of only $15,000. On July 9, 1952, Merrill’s truck collided with an automobile, causing injur)'- to Elaine Walker. Shortly thereafter, an action was filed by Mrs. Walker against Merrill seeking damages of more than $100,000 for such injuries. This action was tried before a jury, which, on December 16,1955, returned a verdict for $100,000. The insurer, Pacific Indemnity Company, paid $15,000 plus costs and interest, on account of the ensuing judgment.

Merrill assigned his claim against the broker, Fulmore, to Mrs. Walker who, on December 14, 1956, brought this action alleging that Fulmore “negligently and carelessly” procured coverage of $15,000 rather than $50,000. The insurer was joined on the theory that Fulmore, as its agent, had obligated it to issue the larger policy. Judgment upon jury verdict was against Fulmore for $35,000 but in favor of the insurer. Plaintiff did not appeal from the latter judgment, and Pacific Indemnity Company therefore is not a party to this appeal. Fulmore does appeal from the judgment against him.

Appellant pleaded Code of Civil Procedure, sections 337, 338 and 339, in bar of the action. He demurred, moved for judgment on the pleadings, for nonsuit and for directed verdict, all on the ground of the statute of limitations. All were determined adversely to him. He asserts the bar of the statute as his sole ground of appeal.

This case presents no problem as to what period of limitation applies. Defendant-appellant contends that the cause of action accrued March 17, 1952, when he procured for Merrill a policy having limits of $15,000 rather than $50,000, or, at the latest, on July 9, 1952, when the accident occurred. Plaintiff argues that the cause of action accrued December 16, 1955, when the verdict for $100,000 was returned. If defendant is correct, this action was brought too late under any of the pleaded statutes, some one of which concededly applies. If plaintiff is correct, the action is within the time under any of the periods of limitation. Thus the only question is when some statute of limitations began to run.