Twin City Fire Ins. Co. v. Auto Zone Parts CA4/2 (2023) · DecisionDepot
Twin City Fire Ins. Co. v. Auto Zone Parts CA4/2
California Court of Appeal May 17, 2023 No. E076227Unpublished
Filed 5/17/23 Twin City Fire Ins. Co. v. Auto Zone Parts CA4/2 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
TWIN CITY FIRE INSURANCE COMPANY, E076227 Cross-complainant and Appellant, (Super. Ct. No. CIVDS1702333) v. OPINION AUTO ZONE PARTS, INC.,
Cross-defendant and Appellant.
APPEAL from the Superior Court of San Bernardino County. John M. Tomberlin,
Judge. Affirmed and dismissed.
London Fischer, Nicholas W. Davila and Patrick G. Bollig; Wiggin and Dana,
Jonathan M. Freiman and Jeffrey R. Babbin, for Cross-Complainant and Appellant.
Haight Brown & Bonesteel, Bruce Cleeland and John M. Wilkerson; Severson &
Werson, Jan T. Chilton and Kerry W. Franich, for Cross-defendant and Appellant.
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I.
INTRODUCTION
AutoZone Parts, Inc. sold the wrong truck axle to a customer, whose grandson
suffered serious injuries in an accident in the truck about two months later. The grandson
sued AutoZone, Dorman Parts, Inc., and others. Dorman and AutoZone responded by
filing cross-complaints against one another and other defendants. After a trial on the
issue of liability, a jury found AutoZone and Dorman each 50 percent liable for the
customer’s injuries. During post-trial proceedings, Dorman’s insurer, Twin City Fire
Insurance Co., substituted in for Dorman. The trial court then granted AutoZone’s
motion for judgment notwithstanding the verdict (JNOV) on Dorman’s cross-complaint,
finding that Dorman failed to prove causation. After entering judgment for AutoZone,
the trial court dismissed AutoZone’s cross-complaint without prejudice.
Twin City appealed, and AutoZone filed a protective cross-appeal. We affirm the
judgment and the order dismissing AutoZone’s cross-complaint without prejudice. We
therefore dismiss AutoZone’s cross-appeal as moot.
II.
FACTUAL AND PROCEDURAL BACKGROUND
Dylan Donnelly’s grandfather took his truck in for repairs and the mechanic,
Jeremy Stratton, determined that the truck needed a new left rear axle assembly. Stratton
called AutoZone, gave them information about the truck, and told them the part he
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needed. AutoZone told Stratton that they had the right part, a rear axle shaft supplied by
Dorman, and mailed it to him. Stratton then installed the axle shaft in the truck.
About two months and 2,500 miles on the truck later, Donnelly borrowed his
grandfather’s truck to go on a trip with a friend. While Donnelly was sleeping in the
backseat and his friend was driving, the truck unexpectedly veered left and flipped.
Donnelly suffered serious, permanent injuries in the crash.
Donnelly sued Dorman and AutoZone for negligence and products liability. Their
mutual insurer, Twin City, retained the same attorney for them. Dorman filed a cross-
complaint against various defendants (but not AutoZone), asserting four causes of action
for (1) implied indemnity, (2) equitable indemnity, (3) total equitable indemnity, and (4)
declaratory relief.
Twin City eventually determined that Dorman and AutoZone were adverse to each
other and appointed new counsel for them. A couple of months later, Dorman amended
its cross-complaint to name AutoZone as a cross-defendant. AutoZone responded shortly
afterward by filing a cross-complaint against Dorman and other cross-defendants.
AutoZone’s cross-complaint asserts the same four causes of action that Dorman asserts
against AutoZone.
Donnelly eventually settled for $29.9 million with Twin City as Dorman and
AutoZone’s insurer. Donnelly dismissed his complaint and the case proceeded on
Dorman and AutoZone’s cross-complaints.
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Before trial, the parties disputed what the jury should decide. The trial court ruled
that the jury would decide only the percentage Dorman and AutoZone were at fault and
that the court would then decide damages. The jury found that AutoZone was 50 percent
at fault for Donnelly’s injuries and that “Dorman and any others” were 50 percent at
fault.
The trial court directed Dorman to file a proposed judgment. Dorman complied by
filing a proposed judgment awarding itself $13 million (i.e., half of the Donnelly
settlement). AutoZone objected because the trial court had yet to award damages, so the
trial court ordered the parties to file briefs on what damages to award.
In its brief, AutoZone argued (as it did before trial) that Dorman had suffered no
damages because Twin City paid the entire Donnelly settlement. Shortly after opposing
AutoZone’s brief, Dorman told the trial court that it wanted to substitute Twin City in its
place. Dorman explained because Twin City would pursue “exactly the same claims [that
Dorman asserted in its cross-complaint] and be subject to exactly the same defenses” as
Dorman because “[t]he claims and defenses do not change.” Twin City thus would
“pursu[e] Dorman’s equitable indemnification claim against AutoZone.” The trial court
granted Dorman’s request and substituted Twin City “as cross-complainant in place of
Dorman . . . for all further purposes.”
Twin City then moved for entry of judgment. The trial court granted the motion,
awarded Twin City $13 million, and entered judgment against AutoZone.
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Shortly afterward, AutoZone filed its JNOV motion. AutoZone argued Dorman
was not entitled to judgment or the $13 million damage award because Dorman failed to
prove causation, did not provide necessary expert testimony, and did not suffer any
recoverable damages. The trial court agreed with AutoZone’s causation argument,
granted AutoZone’s JNOV motion, vacated the judgment, and entered a new judgment
for AutoZone. AutoZone then moved to dismiss its cross-complaint without prejudice,
which the trial court granted.
Dorman appealed the judgment for AutoZone and the trial court’s order
dismissing AutoZone’s cross-complaint without prejudice. AutoZone filed a protective
cross-appeal from the $13 million judgment for Twin City “in the event This Court
reverses the judgment” for AutoZone.
III.
DISCUSSION
AutoZone contends we should affirm the judgment in its favor for several reasons,
including that Dorman did not suffer legally cognizable damages and, in turn, Twin City
cannot recover damages on Dorman’s cross-claims as its substitute. Although the trial
court did not reach the damages issue in granting AutoZone’s JNOV motion, we agree
with AutoZone and affirm the judgment on that basis. (Day v. Alta Bates Medical Center
(2002) 98 Cal.App.4th 243, 252, fn. 1 [appellate court may affirm on any basis].) We
affirm the trial court’s order dismissing AutoZone’s cross-complaint without prejudice,
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instead of with prejudice, because Twin City fails to show it was prejudiced by the
dismissal without prejudice.
A. Dorman Suffered No Legally Cognizable Damages
AutoZone and Twin City agree, as do we, that restitution is the appropriate 1 remedy in an equitable indemnity action such as this case. (AmeriGas Propane, L.P. v.
Landstar Ranger, Inc. (2010) 184 Cal.App.4th 981, 989 (AmeriGas).) Equitable
indemnification allows “liability to be apportioned between wrongdoers based on their
relative culpability.” (Woodward-Gizienski & Associates v. Geotechnical Exploration,
Inc. (2008) 208 Cal.App.3d 64, 67.) Its purpose is to “equaliz[e] the common burden
shared by joint tortfeasors, and to prevent one from profiting at the expense of others.”
(AmeriGas, supra, at p. 989.) It is based on the equitable principle that “one who has
been compelled to pay damages which ought to have been paid by another wrongdoer
may recover from that wrongdoer.” (Bush v. Superior Court (1992) 10 Cal.App.4th
1374, 1380, italics added.)
Thus, in an equitable indemnity action involving joint tortfeasors, the plaintiff may
not recover money it did not pay. (AmeriGas, supra, 184 Cal.App.4th at p. 989; Miller v.
Ellis (2002) 103 Cal.App.4th 373, 380-382 (Miller).) To award any more than what the
plaintiff paid out of pocket would unjustly enrich the plaintiff. (Miller, supra, at p. 382.)
1 Although the parties asserted declaratory relief claims against each other, they agree their cross-complaints present an equitable indemnity action.
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Miller illustrates this point. There, attorneys Miller and Ellis represented a
plaintiff in a personal injury action, who later sued them for malpractice. (Miller, supra,
103 Cal.App.4th at p. 376.) Miller had appropriate malpractice insurance, but Ellis did
not, so Miller’s insurer provided Ellis a “‘courtesy defense.’” (Ibid.) The matter settled
and Miller’s insurer paid the entire settlement sum ($75,000), even though Miller and
Ellis were just as liable. (Ibid.) Miller then filed an indemnity action against Ellis
seeking to recover for the malpractice case. (Ibid.)
The Court of Appeal held Miller was limited to recovering restitution, defined as
“any sums paid by Miller in excess of Miller’s share of the fault in order to discharge
their joint liability.” (Miller, supra, 103 Cal.App.4th at pp. 380-381.) But because
Miller’s insurer paid the entire $75,000 settlement, the only restitution Miller could
recover was for the $5,000 deductible he paid out-of-pocket for his insurer’s defense.
(Id. at p. 381.) The court reasoned that “[t]o permit Miller now to obtain
‘indemnification’ from Ellis for the $75,000 paid to the injured party not by Miller
himself, but by his insurance carrier, would effectively reward Miller for his own
wrongdoing,” (ibid.) and “would result in unjust enrichment, contrary to the principles of
fairness and equity underlying the doctrine of indemnification.” (Id. at p. 382.)
We followed Miller, supra, 103 Cal.App.4th 373 in AmeriGas, supra, 184
Cal.App.4th 981. As in Miller, the plaintiff in AmeriGas filed an equitable indemnity
action against Landstar seeking to recover a portion of a settlement the plaintiff had paid
to resolve a tort claim against the plaintiff and Landstar. (AmeriGas, supra, at p. 989.)
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Relying on Miller, we held that the plaintiff could recover restitution from Landstar only
for the amount the plaintiff “itself paid in excess of its fair share.” (Id. at p. 989; see also
5 California Torts § 74.06 [“[A] tortfeasor may not seek indemnity for the amounts paid
by [its] insurer”], citing Miller, supra, at pp. 380-382.)
Twin City argues Miller is distinguishable for two reasons, but neither is
persuasive. Twin City first argues the plaintiff in Miller was a cotortfeasor whereas
Dorman is not. In Twin City’s view, the verdict “was far too imprecise to attribute
liability to Dorman” because it allocated 50 percent liability to AutoZone and 50 percent
liability to “Dorman and others.” For purposes of this appeal, it does not matter exactly
how much liability the jury attributed to Dorman. The special verdict shows that the jury
found Dorman at least partially liable for Donnelly’s injuries, rendering it a cotortfeasor
along with AutoZone. (See Musser v. Provencher (2002) 28 Cal.4th 274, 279-280; 4
A.L.R.3d 620, § 1 [defining “cotortfeasor” in insurance context as “one who is liable,
along with the insured, to compensate an injured third person”].)
Twin City next argues Miller is distinguishable because the plaintiff there intended
to keep any judgment in its favor while judgment was entered for Twin City, and Dorman
always intended to use any judgment award it recovered to reimburse Twin City. But
that does not change the fact that Dorman could not recover on its cross-complaint in the
first place because it did not contribute anything to the Donnelly settlement. Because
Dorman could not recover anything, Twin City also could not recover as Dorman’s
substitute, irrespective of what Dorman intended to do with any judgment in its favor.
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Despite Twin City’s efforts to distinguish Miller, we find it applicable and follow
it here, as we did in AmeriGas. Under Miller and AmeriGas, Dorman is entitled to
equitable indemnity from AutoZone for only the amount it contributed to the Donnelly
settlement. Twin City, however, paid the entire settlement amount, so Dorman cannot
recover anything from AutoZone for its equitable indemnity claims. (Miller, supra, 103
Cal.App.4th at pp. 380-381; AmeriGas, supra, 184 Cal.App.4th at p. 989.) It follows that
Twin City, who substituted in for Dorman to prosecute Dorman’s claims, also cannot
recover damages in Dorman’s shoes. And because neither Dorman nor Twin City was
entitled to recover on Dorman’s cross-complaint, the trial court properly granted
AutoZone’s JNOV motion.
Twin City alternatively argues we should follow Smith v. Parks Manor (1987) 197
Cal.App.3d 872 (Smith), but Smith does not apply here. There, an insured settled with a
plaintiff and the insurer paid the settlement sum. (Id. at p. 877.) The Smith court held
that the insured suffered a loss, even though the insured did not pay the settlement. (Id. at
p. 878.) But Smith’s discussion that Twin City relies on is limited only to whether the
insured suffered a loss that triggered the insurer’s obligations to indemnify the insured.
(See ibid.) The court had no occasion to decide whether the insured could recover for
that loss as restitution on an equitable indemnity claim. “[C]ases are not authority for
propositions not considered.” (People v. Ault (2004) 33 Cal.4th 1250, 1268, fn. 10.)
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Smith therefore does not affect our conclusion above that Miller and AmeriGas control 2 here.
In short, because Dorman could not recover damages on its cross-complaint and
Twin City could not do so as Dorman’s substitute, the trial court properly granted
AutoZone’s motion for JNOV. We therefore affirm the judgment for AutoZone.
B. Dismissal Without Prejudice
Twin City contends the trial court erroneously dismissed AutoZone’s cross-
complaint without prejudice instead of with prejudice. In its view, the judgment for
AutoZone resolved the claims asserted in AutoZone’s operative cross-complaint, so the
dismissal should have been with prejudice under Code of Civil Procedure section 581, 3 subdivision (e). We disagree.
Under section 581, subdivision (e), the trial court may dismiss a complaint without
prejudice at the plaintiff’s request after trial has begun only if there is good cause. If no
good cause exists, then the dismissal must be with prejudice. (Code Civ. Proc., § 581,
2 In the trial court, Twin City argued that it suffered a loss because its insurance policy was depleted because of the settlement. On appeal, AutoZone asserted that the argument was meritless. At oral argument, however, counsel for Twin City clarified that the argument pertained only to its position that Twin City had standing. 3 Code of Civil Procedure section 581, subdivision (e), provides in full: “After the actual commencement of trial, the court shall dismiss the complaint, or any causes of action asserted in it, in its entirety or as to any defendants, with prejudice, if the plaintiff requests a dismissal, unless all affected parties to the trial consent to dismissal without prejudice or by order of the court dismissing the same without prejudice on a showing of good cause.”
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subd. (e).) These principles apply to a cross-complaint. (See Code Civ. Proc., § 581,
subd. (a)(2).)
Twin City argues we review the trial court’s finding that there was good cause to
dismiss AutoZone’s cross-complaint de novo while AutoZone argues we apply the abuse-
of-discretion standard. We need not decide the issue because we find no error under
either standard.
AutoZone’s cross-complaint asserted claims for implied, equitable, and express
indemnity against Dorman, as well as a claim for declaratory relief. The express
indemnity claim alleged that Dorman expressly agreed in the parties’ vendor agreement
to indemnify AutoZone “from and against all suits, claims, losses, costs and expenses,
even if such claims are groundless . . . arising out of any actual or alleged injury”
resulting from “any alleged or actual defect in any products supplied to AutoZone by
[Dorman].”
The trial court ordered the trial to be bifurcated with the jury first only
apportioning fault for Donnelly’s accident. The jury found AutoZone 50 percent liable
while finding “Dorman and others” 50 percent liable. The jury thus did not specifically
determine Dorman’s fault, which, as Twin City notes, “was predicate to all of
AutoZone’s cross-claims, including express indemnification.” And because the jury was
limited only to apportioning fault, AutoZone had no chance to present evidence of
damages that its cross-complaint sought to recover. Nor did AutoZone have a chance to
argue Dorman had to indemnify AutoZone for its damages under the vendor agreement.
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In short, the jury’s liability findings did not adjudicate all of the issues raised in
AutoZone’s cross-complaint. Under these circumstances, the trial court correctly found
that there was good cause to dismiss the cross-complaint without prejudice.
But even if the trial court erred in doing so, Twin City fails to show that it was
prejudiced by the dismissal without prejudice. (See Bianco v. California Highway Patrol
(1994) 24 Cal.App.4th 1113, 1125 [appellant must show the trial court prejudicially erred
to obtain reversal].) Twin City does not clearly argue how it was prejudiced, but suggests
that the dismissal without prejudice will impermissibly allow AutoZone to relitigate the
cross-complaint “at its convenience at a future date, perhaps in a different forum.”
Although AutoZone might do so, it might not. As it stands, Twin City’s concern that
AutoZone may try to relitigate its cross-claims at some later date in some other forum is
entirely speculative and does not warrant reversal. (See Harmony Gold U.S.A., Inc. v.
County of Los Angeles (2019) 31 Cal.App.5th 820; People v. Singh (2015) 234
Cal.App.4th 1319, 1331.) We note, however, that anything decided on the merits in this
case could not be relitigated under the doctrines of claim and issue preclusion. (See Mesa
Shopping Center-East, LLC v. O Hill (2014) 232 Cal.App.4th 890, 901-902.)
C. AutoZone’s Cross-Appeal
AutoZone filed a protective cross-appeal to challenge the $13 million judgment
for Twin City in the event we reverse the judgment for AutoZone. Because we affirm the
judgment for AutoZone, we dismiss its cross-appeal as moot. (Quantification Settlement
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Agreement Cases (2015) 237 Cal.App.4th 72, 76; Jones & Matson v. Hall (2007) 155
Cal.App.4th 1596, 1611.)
IV.
DISPOSITION
The judgment for AutoZone and the order dismissing AutoZone’s cross-complaint
without prejudice are affirmed. AutoZone’s cross-appeal is dismissed as moot.
AutoZone may recover its costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
CODRINGTON J.
We concur:
McKINSTER Acting P. J.
MILLER J.
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AI Brief
AI-generated · verify before citing
Holding. The court held that an insurer cannot recover on an equitable indemnity claim when its insured did not personally pay any portion of the underlying settlement. Consequently, the trial court properly granted judgment notwithstanding the verdict (JNOV) for the cross-defendant and did not err in dismissing the cross-complaint without prejudice.
Issues
Whether an insured can recover on an equitable indemnity claim when its insurer paid the entire settlement amount.
Whether a trial court abused its discretion by dismissing a cross-complaint without prejudice after a bifurcated trial on liability.
Whether a protective cross-appeal should be dismissed as moot upon the affirmation of the underlying judgment.
Disposition. Affirmed and dismissed.
Quotations verified verbatim against the opinion
“In an equitable indemnity action involving joint tortfeasors, the plaintiff may not recover money it did not pay.”
“Because Dorman could not recover anything, Twin City also could not recover as Dorman’s substitute, irrespective of what Dorman intended to do with any judgment in its favor.”
“The trial court correctly found that there was good cause to dismiss the cross-complaint without prejudice.”