Delgado v. Interins. Exchange 6/25/07 CA2/3

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State: California

Court: 1st District Court of Appeal 1st District Court of Appeal

Docket No: B191272A

Case Date: 09/25/2007

Preview:Filed 6/25/07 Opinion following order vacating prior opinion

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION THREE

JONATHAN DELGADO, Plaintiff and Appellant, v. INTERINSURANCE EXCHANGE OF THE AUTOMOBILE CLUB OF SOUTHERN CALIFORNIA, Defendant and Respondent.

B191272 (Los Angeles County Super. Ct. No. VC045588)

APPEAL from a judgment of the Superior Court of Los Angeles County, Raul A. Sahagun, Judge. Reversed and remanded with directions. Ford, Walker, Haggerty & Behar and K. Michele Williams for Defendant and Respondent. Glaser & Damone and Robert P. Damone for Plaintiff and Appellant.

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INTRODUCTION The appellant, Jonathan Delgado, appeals from the dismissal of his first amended complaint against the respondent Interinsurance Exchange of the Automobile Club of Southern California (ACSC). Delgado had sued Craig Reid, ACSC's insured, for personal injuries (the underlying action). When the action was tendered to ACSC, it denied coverage and refused a defense. After settling his claim against Reid, in exchange for a stipulated judgment and an assignment of all of Reid's rights against ACSC, Delgado filed this action for declaratory relief, breach of the implied covenant of good faith and fair dealing, and for recovery on the stipulated judgment pursuant to Insurance Code section 11580, subdivision (b)(2). In spite of the pleadings in the underlying action, which were sufficient to demonstrate a potential for coverage under the ACSC homeowner's policy issued to Reid, the trial court determined, on ACSC's demurrer, that there was no coverage under the policy and that the stipulated judgment agreed to by Delgado and Reid was "contrived." We conclude that this was error. As the underlying complaint contained allegations demonstrating a potential for coverage under the ACSC policy, ACSC's refusal to provide its insured with a defense was without apparent justification. The allegation of such circumstances was sufficient to state a cause of action for the bad faith refusal to defend. The remaining issues raised by Delgado's complaint as to actual coverage under the policy, the enforceability in whole or in part of the stipulated judgment, and the amount of Delgado's resulting damages, if any, are all matters not resolvable on demurrer. We will therefore reverse and remand with directions. 2

FACTUAL AND PROCEDURAL BACKGROUND1 On November 7, 2003, Reid kicked Delgado and struck him in the nose while the two were standing on the sidewalk across the street from Reid's residence. Delgado sustained physical injury as a result. On March 8, 2004, through his guardian ad litem, Delgado filed the underlying action against Reid. He alleged two causes of action. In the first, he alleged that Reid had "in an unprovoked fashion and without any justification physically struck, battered and kicked . . . Delgado repeatedly causing serious and permanent injuries." In the second, Delgado alleged that Reid had "negligently and unreasonably believed and [sic] that [Reid] was engaging in self defense and unreasonably acted in self defense when [Reid] negligently and unreasonably physically and violently struck and kicked . . . Delgado repeatedly causing serious and permanent injuries." (Italics added.)2 Reid had a homeowner's policy providing $100,000 liability coverage with ACSC and tendered Delgado's complaint to it for a defense. On or about April 22, 2004, ACSC denied coverage and refused to provide a defense. ACSC did so on two grounds: (1) there was no "occurrence," as that term is defined in the policy, since an

The facts that we recite are taken from the first amended complaint filed by Delgado (the operative pleading herein) which incorporates, as an exhibit, a copy of his complaint against Reid in the underlying action. As this action comes to us on demurrer, we must assume the truth of the allegations set out in that pleading. (Neilson v. City of California City (2005) 133 Cal.App.4th 1296, 1305.) In addition, Delgado alleged that Reid had acted "intentionally [sic] and with malice and oppression, violently struck, battered and kicked . . . Delgado in an unprovoked fashion and without justification . . . . " This allegation obviously relates to a claim for punitive damages which Delgado also sought in his pleading. 3
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intentional unprovoked attack could not be considered an accident; and (2) the conduct of Reid (its insured), as alleged in the complaint, arose out of his intentional acts and thus triggered the policy's intentional acts exclusion or the statutory "wilful acts" exclusion that is incorporated into every policy of liability insurance. (Ins. Code,

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