Opinion
NOT TO BE PUBLISHED
Alameda County S.Ct. No. RG03101684
Bruiniers, J.
On January 23, 1998, a partial roof collapse occurred during construction of a commercial warehouse. Two employees of the roofing subcontractor, Roof Structures, Inc. (RSI), were seriously injured and a third was killed. Personal injury and wrongful death actions were brought against the general contractor, SBCC, Inc. doing business as South Bay Construction Company (South Bay), and against the project owner, Hunter/Storm/Durham & 680, LLC (Hunter Storm). These actions were settled in 2003, but spawned a hydra-like series of disputes between South Bay, Hunter Storm, RSI and their respective insurers on issues including contractual indemnity obligations, insurance coverage, and equitable indemnification, contribution and subrogation. (See S.B.C.C., Inc. v. Roof Structures, Inc. (Mar. 8, 2007, A112825) [nonpub. opn.] (SBCC); Great American Ins. Co. v. Fidelity and Guaranty Ins. Co. (Apr. 30, 2007, A112817) [nonpub. opn.] (Fidelity I); Great American Ins. Co. v. Fireman’s Fund Ins. Co. (Sept. 2, 2008, A117186, A117187, A117334) [nonpub. opn.] (Fireman’s Fund); Great American Ins. Co. v. St. Paul Fire & Marine Ins. Co. (Sept. 2, 2008, A116873) [nonpub. opn.] (St. Paul Ins.).)
In the matter now before us, two of the insurers, Great American Insurance Company (Great American) and Fidelity and Guaranty Insurance Company (Fidelity) contest liability to one another for allocation of amounts paid on behalf of Hunter Storm in settlement of the personal injury action. Fidelity insists that the respective obligations of the insurers can only be quantified after resolution of disputed issues of material fact as to the proportionate liability of each of the insured principals, and the application of the terms of contractual indemnity provisions based on that determination. Great American contends here, as in the trial court, that it is entitled to equitable subrogation from Fidelity under well-established principles of insurance law, without regard to any contractual indemnity agreement between their insureds.
The trial court granted summary judgment in favor of Great American, determining that, on the undisputed facts, Great American as an excess insurer was entitled to equitable subrogation from Fidelity in the sum of $1 million—the limit of Fidelity’s base policy issued to Hunter Storm. Although it is not clear on the record before us that issues of express contractual indemnity obligations between the insured principals have been resolved (and we do not resolve them here), we agree that Great American was entitled to summary judgment on its complaint for equitable subrogation under established principles of insurance law.
I. Factual and Procedural Background
A. The Underlying Tort Litigation
The genesis of this protracted litigation was a tragic construction site accident on January 23, 1998, in which workmen Mickey Current and Robert Low were injured and Daniel Ramos was killed, when they fell to the ground after a portion of the roof structure of a warehouse under construction in Fremont, California collapsed. RSI, their employer, was the roofing subcontractor on the project. South Bay was the general contractor. Hunter Storm was the project owner.
Current and Low sued South Bay and Hunter Storm, among others, alleging that each was negligent and in some manner responsible for their injuries. (Super. Ct. Santa Clara County, No. CV779494 (Current/Low litigation).) As to Hunter Storm, the plaintiffs alleged that it was liable by virtue of its own active misconduct in making design changes to sheathing materials and trusses used in the roofing structure to save money, and that those changes were causal factors in the accident. RSI was not named in the complaint due to the exclusivity of workmen’s compensation remedies.
Ramos’s heirs filed a separate wrongful death action against South Bay and Hunter Storm. The Ramos action settled for $1.905 million in January 2003, funded by St. Paul Fire and Marine Insurance Company (St. Paul) and Underwriters Insurance Company (Underwriters). Allocation of this sum is not at issue in this appeal.
Hunter Storm (and South Bay) moved for summary judgment, arguing that it was merely the owner of the property, that it retained no control over the general contractor or roofing contractor and, therefore, the Current/Low claims were barred under Privette v. Superior Court (1993) 5 Cal.4th 689 (Privette)and Toland v. Sunland Housing Group, Inc. (1998) 18 Cal.4th 253 (Toland). The Current/Low plaintiffs presented expert testimony of an architect and of an engineer that Hunter Storm’s design and cost containment decisions created a dangerous condition that caused or contributed to the accident. They contended that the Privette/Toland doctrine, insulating in most cases a hirer from liability for the negligence of an independent contractor, did not preclude liability premised on Hunter Storm’s own acts which caused or contributed to the accident. The motions were denied. South Bay and Hunter Storm then settled the Current/Low litigation through payment by certain of the insurers of a total of $4 million. Fidelity participated in the defense of the Current/Low litigation, but withdrew settlement authority and declined to participate in funding the settlement. It is the allocation of responsibility for the portion of the settlement paid by Great American that is at issue in this appeal.
B. Contractual Indemnity Provisions
The contract between Hunter Storm and South Bay to build the commercial warehouse contained an indemnity clause which states: “To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner... from and against claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from performance of the Work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death,... but only to the extent caused in whole or in part by negligent acts or omissions of the Contractor, a Subcontractor, anyone directly or indirectly employed by them, or anyone for whose acts they may be liable, regardless of whether or not such claim, damage, loss or expense is caused in part by a party indemnified hereunder.” The contract required South Bay to name Hunter Storm as an additional insured under South Bay’s liability insurance policy.
South Bay’s subcontract with RSI to build the warehouse roof states, in pertinent part:
“THE SUBCONTRACTOR AGREES:
“(A) WORKMANSHIP & MATERIALS. To be bound to the Contractor by the terms of this agreement, and the general contract documents, and to assume toward Contractor all the obligations and responsibilities that it, by the general contract documents,... assumes toward the Owner, and in general to perform said work and each and every part and detail thereof in the best and workmanlike manner by qualified, careful and efficient workers and to use materials that are satisfactory for which they are applied. [¶]... [¶] (I) LIABILITY FOR INJURY & DAMAGE. To indemnify, save harmless and defend Owner and Contractor and each of them from and against any and all suits, actions, legal proceedings, claims, demands, damages, liabilities, cost[s] and expenses of whatsoever kind or nature (including attorney’s fees) in any manner caused or occasioned or claimed to be caused or occasioned through any occurrence, omission, fault or negligence of Subcontractor, or anyone acting under its direction and control or on its behalf, in connection with or incident to the performance of the work and, without limiting the generality of the foregoing, the same shall include injury or death to any person or persons and damage to any property including that of Owner and Contractor....”
The subcontract also required RSI to name South Bay and Hunter Storm as additional insureds on RSI’s primary and excess liability policies, and that RSI’s insurance be primary.
C. The Insurance Policies
At the times relevant to this case, Hunter Storm was insured by a general commercial liability policy issued by Fidelity which provided $1 million in primary coverage. Fidelity also issued an umbrella policy to Hunter Storm providing $10 million in excess coverage. RSI was insured by a $1 million primary general liability policy issued by St. Paul and a $10 million excess general liability policy issued by Great American. Hunter Storm and South Bay were each additional insureds on RSI’s policies.
South Bay was also insured by a $1 million primary general commercial liability policy issued by Underwriters and a $25 million excess general liability policy issued by Fireman’s Fund Insurance Company (Fireman’s Fund). Those policies are not in issue in this appeal.
D. The Settlement Contributions
The settlement of the Current/Low litigation was funded by the insurance carriers, with the exception of Fidelity, subject to a reservation of rights and without any admission as to which parties and/or their insurers were ultimately liable or responsible for the settlement sums. RSI’s primary insurer, St. Paul, funded $45,000 of the settlement, contending that this payment exhausted policy limits. Great American, as RSI’s excess insurer, agreed to fund $1,952,500 of the settlement, $1 million of which it agreed to fund on behalf of Hunter Storm as its additional insured. South Bay’s primary insurer, Underwriters, funded $50,000, and South Bay’s excess insurer, Fireman’s Fund, funded $1,952,500.
E. The Insurance Litigation
Great American filed the present action in Alameda County Superior Court against Fidelity, Fireman’s Fund and St. Paul. Great American alleged generally that: it had allocated $1 million of its total payment toward the personal injury settlement as the reasonable settlement value of the personal injury claims against Hunter Storm; Fidelity, which had issued a $1 million primary policy to Hunter Storm, refused to contribute any amount to the settlement to extinguish Hunter Storm’s potential liability for the personal injury action, “despite conceding that the [Current/Low action] against Hunter Storm [is] covered by [the Fidelity] policy”; Great American was paying $1,952,500 toward the Current/Low settlement to protect its insureds’ interests and its own interest, including avoiding a judgment against Hunter Storm above the limits of Hunter Storm’s primary policy; Great American had demanded payment from Fidelity for its respective share of the indemnity costs to resolve the underlying personal injury actions and to reimburse it for all amounts expended to resolve those actions; and, pursuant to its excess policy and as a matter of equity, it had no liability for the personal injury settlement payments.
The first and second causes of action sought declaratory relief and equitable contribution against all defendants. Both causes of action alleged that any obligation or liability Great American had under its excess policy was subject to the limitations of that policy; that Fidelity refused to pay any of its share of the settlement of the underlying personal injury action; and that Fireman’s Fund and St. Paul’s had paid less than their fair share of the settlement. Great American sought a judgment declaring that the three insurers were obligated to pay their respective obligations and fair and reasonable shares of the settlement, and that it was entitled under equitable principles of contribution to reimbursement of its payment of the personal injury settlement.
The third cause of action sought equitable subrogation against Fidelity only. Great American reiterated the allegation that Fidelity refused to pay any amount of the personal injury settlement and alleged that it was entitled under equitable principles of subrogation to reimbursement of its payment of the settlement.
The fourth and final cause of action was against St. Paul for equitable subrogation. Neither Fireman’s Fund nor St. Paul are parties to this appeal.
Fireman’s Fund and Hunter (as well as South Bay and Underwriters) cross-complained against RSI and Great American, claiming a right to indemnification under the terms of RSI’s subcontract. Fidelity did not cross-complain, although its insured, Hunter Storm, along with South Bay, filed a separate indemnity action against RSI (Super. Ct. Alameda County, No. RG04144978).
We discuss the current status of the pleadings in greater detail post.
F. Prior Appeals
Fidelity contends that our decisions in two prior related appeals control the result here, and require reversal and a trial of the fact issue of the insureds’ respective liability for the plaintiff’s claims in the underlying accident. In Fidelity I, we reversed the trial court’s grant of summary judgment to Fidelity on its cross-motion against Great American. The trial court accepted Fidelity’s argument that it had no liability under the doctrine of equitable subrogation since its insured, Hunter Storm, was relieved from any ultimate legal liability to the Current/Low plaintiffs by the contractual indemnity provisions of South Bay/RSI subcontract and South Bay/Hunter Storm contract.
The trial court in Fidelity I also denied Great American’s cross-motion for summary judgment/summary adjudication, but that ruling was not appealed.
In reversing the grant of summary judgment, we were required to examine the scope and effect of the contractual indemnity clauses between RSI and South Bay, and between South Bay and Hunter Storm. We there found that Fidelity failed to establish that the indemnity provision in the South Bay/RSI subcontract constituted a complete defense to Great American’s action for subrogation, holding: “As we have concluded, RSI is obligated under [the subcontract] to indemnify Hunter Storm only if RSI is negligent. While Fidelity supported its motion for summary judgment with an expert opinion declaration that RSI’s conduct was a substantial factor in causing Current and Low’s injuries, Great American alleged in its complaint and presented competing evidence that Hunter Storm’s active conduct was the cause of their injuries. As yet there has been no definitive finding or admission that RSI was negligent. Until there are undisputed facts that RSI’s negligence caused Current and Low’s injuries and Hunter Storm is therefore fully indemnified under the South Bay/RSI subcontract against those injuries, Hunter Storm retains a right to demand that its insurer, Fidelity, indemnify it against Current and Low’s injuries. In the context of this subrogation action, Great American, which paid those losses on behalf of Hunter Storm, retains the right to seek recovery of those losses from Fidelity. [Citation.]” Because that appeal pertained only to the judgment entered in favor of Fidelity, we did not reach the issue of whether Great American was entitled to judgment.
Fidelity contends that the effect of our decision in Fidelity I was to require a trial on the merits to determine responsibility for causation of the injuries to the Current/Low plaintiffs, thus precluding grant of summary judgment to Great American on its claim for equitable subrogation.
In our unpublished decision in SBCC we affirmed grant of summary judgment in favor of Hunter Storm and South Bay and against RSI on claims for express indemnity under the provisions of the construction subcontract, requiring RSI to reimburse Hunter Storm and South Bay for certain attorney fees ($48,046.83) incurred in responding to the Current/Low and Ramos litigation. In the trial court, RSI opposed the motion on the ground that the indemnity provision of the parties’ subcontract was not intended to embrace the negligence of South Bay and Hunter Storm, and that the contractual provision therefore did not apply. In the appeal, however, RSI raised only the grounds that the respondents had no claim because they never tendered their fees to RSI.
Great American requests judicial notice of our decision in this matter.
Ultimately holding that tender was not a prerequisite to recovery, we noted that: “In this appeal, [RSI] does not dispute that the broad language of this indemnity clause obligates [RSI] to ‘make good’ (Rossmoor Sanitation, [Inc. v. Pylon, Inc. (1975)] 13 Cal.3d [622,] 628 [(Rossmoor)]) on any attorney fees [South Bay and Hunter Storm] claimed they incurred as a result of an ‘occurrence, omission, fault or negligence of Subcontractor, or anyone acting under its direction and control...’ in connection with the performance of work for construction of the roof. Specifically, [South Bay and Hunter Storm] have shown, and [RSI] has not disputed, that the collapse of the roof that injured and killed [RSI’s] employees constituted such an occurrence, and that respondents incurred certain attorney fees as a result of the collapse and ensuing injuries.” (Ellipsis in original.)
Here Fidelity argues that the now final judgment in that matter collaterally estops Great American, who it contends is in privity with its insured, RSI, from contesting RSI’s obligation, under the same contractual indemnity provision, to indemnify Hunter Storm for the settlement amounts Great American now seeks to recover from Fidelity.
G. Other Related Appeals
In Fireman’s Fund we concluded that the trial court erred in granting summary judgment against Great American, as RSI’s excess insurance carrier, for the full amounts paid in settlement of the Current/Low litigation by South Bay’s primary and excess carriers, Underwriters and Fireman’s Fund. Fidelity and Hunter Storm were not parties to that appeal.
In the context of that case, we were again required to interpret the scope of the indemnity provision in the subcontract, and held that it did not require RSI to indemnify Hunter Storm or South Bay to the extent that either was solely or actively negligent. We reversed because, although the undisputed evidence was sufficient to demonstrate at least some negligence on the part of RSI, it did not demonstrate the absence of negligence on the part of Hunter Storm and South Bay. We held that absent a factual determination that they were not negligent, or that RSI was solely responsible, the Underwriters and Fireman’s Fund were not entitled to judgment in their favor as a matter of law based on the indemnity agreement.
In St. Paul Ins., St. Paul appealed from a judgment of dismissal on its cross-complaint, entered after the court granted Great American’s motion for judgment on the pleadings. We there concluded that Great American, as an excess insurer, was not responsible for amounts St. Paul paid in defense of Hunter Storm and South Bay as its additional insureds in the Ramos and Current/Low claims since Great American had no duty to pay defense costs until the primary insurance had been exhausted. We were not required to, and did not, address the application or scope of the contractual indemnity provision.
H. The Pending Appeal
Following remand by this court after the issuance of the Fidelity I decision, the parties appeared on January 31, 2008, before Judge Kenneth Burr. The parties agreed that they would file cross-motions for summary judgment to be heard in June. Pursuant to a stipulated briefing schedule among the parties, Great American filed its motion for summary judgment or, in the alternative, summary adjudication against Fidelity.
In its motion, Great American argued that it was entitled to equitable subrogation under the undisputed facts of this case, the FidelityI decision, and under the recent decision of this District in JPI Westcoast Construction, L.P. v. RJS & Associates, Inc. (2007) 156 Cal.App.4th 1448 (JPI). In support of the motion, Great American submitted a statement of 58 undisputed material facts. It asserted that: the Current/Low claims against Hunter Storm were covered by Hunter Storm’s $1 million primary policy issued by Fidelity; Hunter Storm’s defense attorney repeatedly requested Fidelity to settle the Current/Low claims because of the potential of a verdict against Hunter Storm that would exceed the policy limit; Fidelity refused, thereby breaching its duty to its insured, Hunter Storm, to effectuate a reasonable settlement; to protect Hunter Storm, the common insured of Great American and Fidelity, Great American agreed to pay $1 million to settle the Current/Low claims against Hunter Storm; as an excess carrier who paid a claim that should have been paid by Fidelity as Hunter Storm’s primary carrier, Great American was equitably subrogated to Hunter Storm’s remedies against Fidelity.
The court ruled on the parties’ objections to the evidence presented. It sustained one of Fidelity’s 18 objections to Great American’s evidence submitted in support of its motion. It also sustained 58 of 77 objections filed by Great American to the evidence submitted by Fidelity in opposition to Great American’s motion.
Fidelity, in response to Great American’s Separate Statement of Undisputed Material Fact #13, addressing coverage under Fidelity’s base policy for the Current/Low claims, stated “Fidelity did not deny coverage in any respect, it merely disputed the legal liability of Hunter [Storm].”
Fidelity filed two motions: (1) a motion for summary judgment or, in the alternative, summary adjudication; and (2) a motion for judgment on the pleadings. Fidelity asserted that its insured, Hunter Storm, was relieved by the indemnity provisions of South Bay/RSI subcontract and South Bay/Hunter Storm contract from any legal liability for the Current/Low personal injury damages. Both motions argued that Great American was collaterally estopped from seeking relief under its complaint by this court’s decision in SBCC.
Fidelity argued, as it has in all related matters, that the trial court must first “assess the relative liabilities of the subcontractor (RSI), the general contractor (South Bay), and the owner (Hunter [Storm]) and then apply the applicable insurance to those liabilities.” Great American opposed Fidelity’s motions on the grounds that under the holding in JPI, the terms of the insurance policies, not the indemnity provision of the subcontract, should govern the dispute of the insurers.
Following argument by the parties, the court issued several rulings. With respect to Great American’s motion, it ruled that Great American was entitled to reimbursement from Fidelity of the $1 million Great American paid in settlement on behalf of Hunter Storm, finding that “[t]here is no dispute that Great American paid $1 million on behalf of Hunter [Storm] to settle the Current/Low action.” The court also found that: (1) “the evidence presented shows that Hunter [Storm] had potential liability well in excess of policy limits at the time of the settlement”; (2) “Fidelity did not contribute to the settlement”; (3) “[a] primary insurer has a duty to settle a claim for policy limits if there is a substantial likelihood of recovery in excess of those limits”; and (4) “[u]nder the circumstances, Fidelity is estopped to claim that Hunter [Storm] and Great American did not act in good faith in agreeing to settle the claims against Hunter [Storm] by Current and Low for $1 million.”
With respect to Fidelity’s motions, the court denied the motions finding that the relief sought by Fidelity was inconsistent with both the Fidelity I and the JPI decisions. It also held that the SBCC decision did not collaterally estop Great American from seeking equitable subrogation from Fidelity because the issue decided in the SBCC decision was not identical to the issue in these motions. Subsequently, judgment for $1 million plus prejudgment interest was entered in favor of Great American against Fidelity. Notice of Entry of Judgment was given by mail on July 28, 2008. On August 15, 2008, Fidelity filed its notice of appeal.
I. Fidelity’s Cross-Appeal
While Fidelity’s notice of appeal seeks review of denial of its cross-motions for summary judgment/summary adjudication and for judgment on the pleadings, it presented no argument on those issues in its opening brief, raising them for the first time in its reply brief. We see no good cause for Fidelity’s failure to raise these points in its opening brief and will not consider them. (See Campos v. Anderson (1997) 57 Cal.App.4th 784, 794, fn. 3.) We therefore address only the merits of the grant of summary judgment to Great American.
II. Discussion
We are required here to negotiate, as was the trial court, the tangled thicket created by the multiple intertwined, but separately rooted, contractual relationships typically presented in construction-related litigation.
The three principals engaged in the construction enterprise (Hunter Storm, South Bay, and RSI) attempted to structure their obligations, inter se, through contracts providing for express indemnity in the event of third party claims. In addition to the direct contracts between the three principals, policies of primary and excess insurance, issued to each entity created independent contractual obligations, governed by somewhat differing principles, between each carrier and its insured (and additional insureds). Finally, we have the overlay of insurance law defining the obligations between the insurers, as well as rules of equity providing for subrogation of an insurer to the rights of its insured when it has satisfied a claim.
In a case also dealing with a construction site accident and its aftermath, Justice Sills aptly observed: “It is hard to imagine another set of legal terms with more soporific effect than indemnity, subrogation, contribution, co-obligation and joint tortfeasorship. Perhaps because the words describe legal relationships between multiple parties, they are vaguely reminiscent of complex mathematical equations which, after all, also describe relationships, except in numbers rather than words—and for most of us, they are about as easy to understand. Even lawyers find words like ‘indemnity’ and ‘subrogation’ ring of an obscure Martian dialect.” (Herrick Corp. v. Canadian Ins. Co. (1994) 29 Cal.App.4th 753, 756.)
As the history of this litigation recited above amply demonstrates, it is easy to lose one’s way in the thicket of these overlapping relationships. The trial judge attempts to find a path to ultimate resolution with the parties each vigorously urging a different course. Here the parties each contend with equal force that the court has ignored unambiguous guidance from this court, although they themselves arrive at quite different destinations based on their own interpretations of our directions.
A. Appealability
As a threshold matter, we address an issue that neither party raised—whether this appeal is premature and should therefore be dismissed. The trial court granted summary judgment in favor of Great American, and judgment was entered accordingly. Fidelity asserted in its opening brief that the judgment “terminates all claims with respect to [Great American].”
1. Still-Pending Claims
The state of the pleadings below is less than clear. Fidelity, in its opening brief, alleged that “Fireman’s Fund, Underwriters, South Bay and Hunter also filed cross-complaints against RSI and/or Great American. (AA, Vol. XVIII, FID004571).” (Italics added.) On December 30, 2009, we asked the parties for supplemental briefs addressing whether this appeal is premature in light of still pending cross-complaints, and if so, whether we should exercise our discretion to treat this as a writ petition. Both Fidelity and Great American responded that all issues between them had been resolved by grant of summary judgment to Great American, but both asked for writ review on the merits if we concluded otherwise.
It is now at least clear that neither Fidelity nor Hunter Storm has filed a cross-complaint. St. Paul and Underwriters each did file cross-complaints against Great American, both of which have been resolved—St. Paul’s by judgment on the pleadings (St. Paul Ins.) and Underwriters’ by settlement and dismissal. Both Fidelity and Great American seem to agree that the only active and unadjudicated pleadings are Great American’s complaint against Fireman’s Fund and Fireman’s Fund cross-complaint seeking declaratory relief, equitable indemnification, and equitable subrogation. These claims, however, are based, at least in part, on the RSI-South Bay contractual indemnification provisions.
In our prior decision in Fireman’s Fund, we noted that “Fireman’s Fund filed a cross-complaint seeking declaratory relief, equitable indemnification and equitable contribution against Great American and equitable subrogation against RSI.” (Italics added.)
The copy of the cross-complaint cited in the record by Fidelity does not show RSI as a party cross-defendant, but this is apparently not the operative pleading, and counsel assure us that RSI remains a named party to this cross-complaint.
Contrary to Fidelity’s statement in its opening brief, its named insured, Hunter Storm, was a plaintiff only in the related case, SBCC v. Roof Structures Inc. (Super. Ct. Alameda County, No. RG04144978). Our decision in the prior appeal in that case noted: “The complaint also contained a cause of action for equitable subrogation which alleged [South Bay and Hunter Storm] were entitled to be indemnified for all contributions they made to the settlement of the underlying negligence actions. That cause of action was abated and stayed and is not at issue in this appeal.” (SBCC, supra, A112825, italics added.) Counsel advised us at oral argument that this cause of action was resolved by an order of October 6, 2004. That order does not stay or abate any cause of action, but rather sustained a demurrer, without leave to amend, to an equitable subrogation claim against RSI by both South Bay and Hunter Storm for the entire aggregate settlement amount paid in the Current/Low litigation ($2,952,500) on behalf of both Hunter Storm and South Bay. The order was made on the basis that this claim involved the same primary right as the causes of action asserted in the cross-complaints by Fireman’s Fund and Underwriters. It would seem that the trial court, at least, believed that Hunter Storm’s claims against RSI were otherwise presented in the cross-complaints in the primary action.
2. Review on the Merits
The one final judgment rule generally requires dismissal of an appeal from a judgment that does not dispose of all causes of action set forth in the complaints. There is an exception “when the case involves multiple parties and a judgment is entered which leaves no issue to be determined as to one party.” (Justus v. Atchison (1977) 19 Cal.3d 564, 568, disapproved on another ground in Ochoa v. Superior Court (1985) 39 Cal.3d 159, 171; see, e.g., Wolfe v. Dublin Unified School Dist. (1997) 56 Cal.App.4th 126, 128.)
Are there issues yet to be determined involving Fidelity’s insured, Hunter Storm, and RSI, Great American’s named insured? The answer is that we simply do not know based on the incomplete information that we have been given. As best we can ascertain, the scope of RSI’s contractual indemnity obligations remains at issue in the still pending Fireman’s Fund cross-complaint. What is not clear is whether Hunter Storm’s contractual indemnity claims, assuming that they have been preserved and are not otherwise barred, are also implicated. While, for reasons we discuss in detail post, we uphold the grant of summary judgment on Great American’s claim as an excess insurer for Hunter Storm, nothing in our decision would bar Fidelity’s claim as a subrogated insurer on a claim by Hunter Storm for contractual indemnity from RSI. On such claims, Great American would have potential liability as an excess carrier for RSI that might be required to “drop down” to the extent that RSI’s primary coverage from St. Paul has been exhausted. If a possibility of recovery by Fidelity against Great American remains, only a single net judgment should be entered. (American Nat. Bank v. Stanfill (1988) 205 Cal.App.3d 1089, 1095; 7 Witkin, Cal. Procedure (5th ed. 2008) Judgments, § 38.) From the record before us, we are unable to determine whether such a possibility exists or not.
We nevertheless have discretion to treat appeals as petitions for writs of mandate. (See Black Diamond Asphalt, Inc. v. Superior Court (2003) 114 Cal.App.4th 109, 114; see also Lopez v. Superior Court (1996) 45 Cal.App.4th 705, 710, fn. 1.) Both parties ask us to review the merits, whether treated as an appeal or a writ proceeding. In light of the multiplicity of appeals in this matter, and the prospect of further proceedings (and appeals), and since the record and briefs include in substance the elements necessary to a proceeding for writ of mandate, we believe, or at least we hope, that review of the merits of the trial court’s rulings will promote judicial economy and efficiency. (See Black Diamond Asphalt, supra, 114 Cal.App.4th at pp. 114–115.)
A grant of summary adjudication is reviewable only by petition for extraordinary writ filed within 20 days after service of written notice of entry of the order, with an additional five days for mailing if the place of address is within California. (Code Civ. Proc., § 437c, subd. (m)(1).) That time limit is jurisdictional. (E.g., Bensimon v. Superior Court (2003) 113 Cal.App.4th 1257, 1259.) Here the notice of appeal was filed August 15, 2008, within 25 days of notice of entry of the order, and is therefore timely.
B. Summary Judgment Standard of Review
“On appeal from a summary judgment, an appellate court makes ‘an independent assessment of the correctness of the trial court’s ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law.’ [Citation.]” (Mitchell v. United National Ins. Co. (2005) 127 Cal.App.4th 457, 467.) Summary judgment is appropriate “if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) “[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, fn. omitted (Aguilar).) When, as here, the plaintiffs bear the burden of proving facts by a preponderance of the evidence and the defendants move for summary judgment, the defendants “must present evidence that would require a reasonable trier of fact not to find any underlying material fact more likely than not....” (Id. at p. 851.) On review of an order granting summary judgment, “we independently examine the record in order to determine whether triable issues of fact exist to reinstate the action.” (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142.) “All doubts as to whether there are any triable issues of fact are to be resolved in favor of the party opposing summary judgment.” (Ingham v. Luxor Cab Co. (2001) 93 Cal.App.4th 1045, 1049.)
All further statutory references are to the Code of Civil Procedure unless otherwise specified.
A triable issue exists if “the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar, supra, 25 Cal.4th at p. 850, fn. omitted.) If the party opposing summary judgment fails to present evidence to support its contention that a triable fact exists, then no triable issue of fact arises. (See § 437c, subd. (b)(3); Aguilar, at p. 849.) A trial court’s evidentiary rulings made in connection with a summary judgment motion are reviewed for abuse of discretion. (Walker v. Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1169.)
Fidelity interposed objections to certain of Great America’s Undisputed Material Facts, and to the evidence submitted in support. The trial court denied all but one. The court further overruled the majority of Fidelity’s objections to Great America’s evidence in support of its motion. Fidelity’s total discussion of the evidentiary rulings is contained in two footnotes in its opening brief and merely contends that two of the rulings were “inconsistent,” without further discussion or argument. We therefore treat the issue as waived. (See People v. Stanley (1995) 10 Cal.4th 764, 793.)
Where there are no triable issues of material fact, we will affirm summary judgment if correct on any legal theory. (Westoil Terminals Co., Inc. v. Industrial Indemnity Co. (2003) 110 Cal.App.4th 139, 145.)
C. The Undisputed Material Facts on the Insurance Coverage
It is undisputed that Fidelity provided a primary policy of insurance to Hunter Storm in the amount of $1 million, and that the claims made against it in the Current/Low litigation were covered under the policy. It is also undisputed that Great American provided to Hunter Storm, as its additional insured, a policy that provided for excess coverage only, requiring exhaustion of the primary coverage before Great American’s coverage obligation was triggered. Further, there was no dispute that Great American paid the sum of $1.95 million in settlement of the Current/Low litigation, and that Fidelity did not participate in the settlement.
St. Paul also provided a primary policy to Hunter Storm, as an additional insured, but it also appears undisputed that the $1 million limits of this coverage were exhausted. The fact that this coverage was to be primary to Fidelity’s policy under the terms of the contractual indemnity agreement is therefore irrelevant to the issues before us. Likewise, Great American does not dispute in this litigation that its excess policy was primary to Fidelity’s excess policy covering Hunter Storm.
The trial court found that “[t]here is no dispute that Great American paid $1 million on behalf of Hunter [Storm] to settle the Current/Low action,” citing Great American’s Undisputed Material Fact No. 46 which stated, “Check No. 029-838334 comprised Great American’s payment contribution of $1,000,000, on behalf of Hunter [Storm] and $952,500 on behalf of South Bay to settle the Current and Low action against these defendants.” Fidelity contends the payment of any amounts on Hunter Storm’s behalf is a disputed issue of material fact, as is the allocation of the amount of $1 million to settlement of the Hunter Storm claims.
Great American submitted in support of this fact: the declaration of its vice-president Ellen Biondo who handled the claim in the Current/Low litigation; the declaration of Carol Euwema, a claims adjuster retained by Great American in the Current/Low litigation; and the reporter’s transcript of the settlement agreement in the Current/Low matter. In opposition, Fidelity made evidentiary objections, and argued that Great American had submitted “no proof of any facts to support any liability or allocation of liability to Hunter. Hunter had no liability.” Fidelity also contended that this fact was “[i]rrelevant to a determination of Fidelity’s indemnity obligations.”
Fidelity’s objections to the Biondo and Euwema declarations were all overruled, with the exception of a relevance objection to Biondo’s recital of positions taken by St. Paul in connection with the Ramos settlement. Fidelity cited no evidence of its own in opposition on this issue.
The evidence submitted by Great American more than adequately establishes the fact that Great American paid a total of $1.95 million to settle the Current/Low litigation on behalf of both Hunter Storm and South Bay, and that it specifically allocated $1 million of this sum to settlement on behalf of Hunter Storm on the record in the trial court. As the trial court further found, the evidence clearly established that Hunter Storm had “potential liability well in excess of policy limits at the time of the settlement,” citing undisputed fact numbers 23–42 and the supporting evidence cited.
The essence of Fidelity’s argument here, as in prior aspects of this case, is that the contractual indemnity obligations owed by RSI to Hunter Storm are dispositive of the claims between the insurers. Fidelity’s position is that the court must first assess the relative liabilities of the RSI, South Bay, and the Hunter Storm and then apply the applicable insurance to those liabilities. This ignores the fact that as insurers, Fidelity and Great American each had direct duties to their insured, independent of any contractual relationships between the insured principals. Both Fidelity and Great American insured Hunter Storm, with Great American’s policy providing only excess coverage.
Fidelity did not dispute that its policy covered the Current/Low claims, and Fidelity in fact provided a defense, admitting “Fidelity did not deny coverage in any respect[;] it merely disputed the legal liability of Hunter.” Where coverage is not in dispute, a primary insurer has a duty of good faith and fair dealing “to settle a claim against its insured within policy limits whenever there is a substantial likelihood of a recovery in excess of those limits.” (Johansen v. California State Auto. Assn. Inter-Ins. Bureau (1975) 15 Cal.3d 9, 14–15 .) That duty arises whenever there is a substantial likelihood of a recovery beyond the limits; it is triggered by potential liability, not a finding of actual liability against the insured. The insurer must therefore settle the matter if the information available to it at the time shows a substantial likelihood that its insured will be liable for a judgment that exceeds its policy limits. (Ibid.)
The undisputed evidence shows that trial counsel for Hunter Storm from two separate law firms evaluated the evidence in the case and advised the insurers that Hunter Storm faced a substantial likelihood of a verdict in the Current/Low litigation well in excess of the limits of Fidelity’s $1 million primary policy. Great American’s coverage counsel prepared an extremely detailed case assessment which, while taking a more optimistic view than trial counsel about the prospects for a successful defense, recognized the substantial damage exposure Hunter Storm faced in the event the plaintiffs prevailed. Hunter Storm’s trial counsel also advised the insurers that it wanted the matter settled, and requested authority to settle the matter at $4.5 million. Fidelity presented no contrary evidence, and acknowledged, in its reply to Great American’s Statement of Undisputed Material Facts, that it was “Undisputed that all parties [in the Current/Low litigation] agreed the $4.5 million settlement demand was within a reasonable settlement range.” In evaluating the reasonableness of a settlement offer “the only permissible consideration [is] whether, in light of the victim’s injuries and the probable liability of the insured, [an] ultimate judgment is likely to exceed the amount of the settlement offer.” (Johansen supra, 15 Cal.3d at p. 16.) As the trial court found, “the evidence presented shows that Hunter [Storm] has potential liability well in excess of policy limits at the time of the settlement.” Fidelity consequently had a duty to Hunter Storm, as its primary insurer, to settle the Current/Low litigation at its policy limits of $1 million, regardless of what comparative fault Hunter Storm might actually have (or might not have) for the Current/Low injuries, and regardless of what rights Hunter Storm might ultimately have for indemnification from third parties.
The parties dispute the application of the decision of Division Three of this District in JPI, supra, 156 Cal.App.4th 1448, a decision relied upon by the trial court. In JPI, the court, addressing a scenario similar to that presented here, affirmed summary judgment against a primary insurer for a general contractor sued by the family of a subcontractor’s employee in a wrongful death action. (Id. at p. 1451.) Following a trial in which the general contractor, JPI, was found 20 percent liable, there was a postverdict settlement with the plaintiffs, and the excess carrier (also Great American) funded JPI’s share of the settlement amount after JPI’s primary insurer, Transcontinental, refused to participate. Transcontinental, contended, as does Fidelity here, that the contractual indemnity clause between JPI and its subcontractor controlled the priority of insurance between carriers, and that the subcontractor (RJS) and its insurers were therefore responsible for the entire sum. (Id. at p. 1455.) The court upheld the judgment for Great American, emphasizing the fundamental distinction under California insurance law “between primary and excess insurance coverage: ‘ “ ‘Primary coverage is insurance coverage whereby, under the terms of the policy, liability attaches immediately upon the happening of the occurrence that gives rise to liability. [Citation.] Primary insurers generally have the primary duty of defense. [¶] “Excess” or secondary coverage is coverage whereby, under the terms of the policy, liability attaches only after a predetermined amount of primary coverage has been exhausted.’ ” ’ [Citation.]” (Id. at p. 1460, bracketed material in original.)
The JPI court in turn followed the reasoning of Reliance Nat. Indemnity Co. v. General Star Indemnity Co. (1999) 72 Cal.App.4th 1063 (Reliance) in which an excess carrier prevailed against claims of a primary carrier for indemnification, based on its insured’s right to contractual indemnity, for litigation defense and settlement costs in an underlying personal injury action. In both JPI and Reliance, the courts noted that the claims did not involve the parties to the contractual indemnity agreement, and that, as in the instant case, the dispute before the court was “an action between primary and excess carriers as identified by their policies.” (JPI, supra, 156 Cal.App.4th at p. 1462; Reliance, supra, 72 Cal.App.4th at p. 1082.) Both courts distinguished our Supreme Court’s holding in Rossmoor, supra, 13 Cal.3d 622 which rejected “the proposition that the terms of the insurance contracts requiring proration in case of other insurance should control, rather than the right to indemnification that exists between the parties insured by the contracts.” (Rossmoor, supra, at p. 634.) In Rossmoor, the Supreme Court found that, under the circumstances presented, apportioning the loss between insurers pursuant to “other insurance clauses” would effectively negate an indemnity agreement that was negotiated as part of the consideration for the construction contract. (Id. at pp. 634–635.) The “key distinction” drawn in both JPI and Reliance was that Rossmoor involved a dispute between two primary carriers, sharing the same level of obligation on the risk as to the same insured, and that “ ‘Rossmoor did not purport to establish a general rule that a contractual indemnification agreement between an insured and a third party takes precedence over well-established general rules of primary and excess coverage in an action between insurers....’ ” (JPI, supra, 156 Cal.App.4th at p. 1462, ellipsis in original; Reliance, supra, 72 Cal.App.4th at p. 1081.)
We agree with the conclusion reached in JPI and Reliance that, in a dispute between insurers providing different levels of coverage for the same insured, it is appropriate to enforce the contractual terms of the insurance policies, applying the well-established rules of primary and excess coverage. Since Great American provided insurance to Hunter Storm that was only secondary and excess to that provided by Fidelity, its obligations arose only after the underlying coverage provided by Fidelity was exhausted. (See American Casualty Co. v. General Star Indemnity Co. (2005) 125 Cal.App.4th 1510, 1521.) “[E]quitable subrogation allows an insurer that paid coverage or defense costs to be placed in the insured’s position to pursue a full recovery from another insurer who was primarily responsible for the loss. [Citations.]” (Travelers Casualty & Surety Co. v. American Equity Ins. Co. (2001) 93 Cal.App.4th 1142, 1151–1152 (Travelers Casualty).) Great American, as Hunter Storm’s excess insurer, was therefore entitled to recover the limits of Fidelity’s primary policy—$1 million.
Both JPI and Reliance also observed that the equities favored the excess carrier over the primary, noting that, since the risks involved in providing primary coverage are different from those involved in issuing an excess policy, those differences are reflected in the premium costs. (Reliance, supra, 72 Cal.App.4th at pp. 1082–1083; JPI, supra, 156 Cal.App.4th at pp. 1464–1465.) A primary insurer calculates and accepts premiums with knowledge that it might be called upon to satisfy a full judgment, and an excess insurer does not. (Ibid.) “ ‘ “The policyholder pays for two kinds of liability coverage, each at a different rate. The premium charged by the primary insurer supports more localized claims adjustment facilities than those of the excess carrier. It takes into account costs of defense, including legal fees, which the primary insurer normally provides.” ’ [Citations.]” (Reliance, at pp. 1082–1083.) The question of relative premiums charged for the Fidelity and Great American policies was addressed only peripherally in the evidence presented below, and not at all in the briefs of the parties. We note, as did the court in JPI, that “[t]here is no evidence whatsoever that [Fidelity] set the premiums for the general liability coverage it provided to [Hunter Storm] on an understanding that its policy would be secondary to the General American policy.” (JPI, at pp. 1464–1465.)
The elements of an insurer’s cause of action for equitable subrogation are: “(a) the insured suffered a loss for which the defendant is liable...; (b) the claimed loss was one for which the insurer was not primarily liable; (c) the insurer has compensated the insured in whole or in part for the same loss for which the defendant is primarily liable; (d) the insurer has paid the claim of its insured to protect its own interest and not as a volunteer; (e) the insured has an existing, assignable cause of action against the defendant which the insured could have asserted for its own benefit had it not been compensated for its loss by the insurer; (f) the insurer has suffered damages caused by the act or omission upon which the liability of the defendant depends; (g) justice requires that the loss be entirely shifted from the insurer to the defendant, whose equitable position is inferior to that of the insurer; and (h) the insurer’s damages are in a liquidated sum, generally the amount paid to the insured. [Citations.]” (Fireman’s Fund Ins. Co. v. Maryland Casualty Co. (1998) 65 Cal.App.4th 1279, 1292.)
Fidelity participated in the defense of Hunter Storm, but no evidence was presented to as to the amounts it expended, and no argument has been made by Fidelity that this was a self-consuming, or “burning limits” policy, with the costs of defense reducing the indemnity coverage limits available. (See Powerine Oil Co., Inc. v. Superior Court (2005) 37 Cal.4th 377, 402.)
D. The Contractual Indemnity Issues.
Our determination that Great American was properly granted summary judgment on its complaint under general principles of insurance law does not, as Fidelity appears to contend, eviscerate the contractual indemnity obligations between the contracting principals under the construction contracts. Nor is our decision on this issue in conflict, as Fidelity alleges, with our prior decisions in the related appeals.
1. Collateral Estoppel
Fidelity contends that the trial court erred by failing to find that our unpublished decision in SBCC collaterally estopped Great American from pursuing equitable subrogation against Fidelity. It also asserts that the trial court improperly gave “preclusive effect” to our decision in Fidelity I. Neither argument has merit.
“Collateral estoppel forecloses relitigation of an issue that (1) is identical to one decided in a prior case[,] (2) involving the same party or parties or those in privity with them[,] and (3) which resulted in a final judgment on the merits.” (County of Los Angeles v. County of Los Angeles Assessment Appeals Bd. (1993) 13 Cal.App.4th 102, 108.) The doctrine of collateral estoppel has no application here. Contrary to Fidelity’s contention, the issues here are not identical. In SBCC we examined the application of the indemnity clause not from the perspective of liability for third party claims, but the extent to which the provision required reimbursement for direct costs (attorney fees) incurred in responding to third party claims. The cause of action in that complaint seeking indemnity for the Current/Low settlement payments was “abated” and was not before us. We found the obligation to indemnify for the fees arose from the “occurrence” of the underlying accident. The issue presented in the present appeal, however, is the priority of primary and excess insurers for the same insured—not the contractual obligations of the insured parties.
2. Law of the Case
Fidelity is correct that our decision in Fidelity I is law of the case. “ ‘The law of the case doctrine states that when, in deciding an appeal, an appellate court “states in its opinion a principle or rule of law necessary to the decision, that principle or rule becomes the law of the case and must be adhered to throughout its subsequent progress, both in the lower court and upon subsequent appeal....” ’ [Citation.]” (Cerna v. City of Oakland (2008) 161 Cal.App.4th 1340, 1354, ellipsis in original.) That doctrine, however, also has no bearing on the summary judgment issues we decide today. In Fidelity I (and in Fireman’s Fund) we addressed the interpretation of the indemnity provisions of the RSI subcontract, concluding in both cases that the scope of the contractual obligation of RSI to hold South Bay and/or Hunter Storm harmless was dependent upon assessment, as yet undetermined, of RSI’s negligence and whether Hunter Storm or South Bay were actively negligent. Our decision here does not preclude adjudication of those issues to the extent that they remain pending before the trial court.
In St. Paul Ins. we dealt with the obligations between Great American, as an excess insurer, and St. Paul and Underwriters as issuers of primary policies (to South Bay).
In Fidelity I we concluded that whatever indemnity obligations South Bay and RSI intended RSI to assume toward Hunter Storm derived solely from Paragraph I “Liability for Injury & Damages” of the RSI subcontract, and that RSI is obligated to indemnify Hunter Storm under that paragraph only if RSI is negligent. We further said that “[r]easonably read, this indemnity clause provides that RSI will indemnify Hunter Storm and South Bay for any damages RSI caused.... Considering the indemnity provision in the construction trade context in which the provision arises, the language manifests the intent of RSI and South Bay that RSI will indemnify Hunter Storm and/or South Bay for job site injuries ‘to any person’ when subcontractor RSI was ‘in any manner’ a cause of the injury. Said slightly differently, the clause reflects a mutual understanding that RSI will indemnify Hunter Storm and South Bay only to the extent of RSI’s negligence, not for injuries caused by South Bay or Hunter Storm’s negligence.... [¶]... [¶]... Indeed, Hunter Storm is not entitled to indemnity if it was solely negligent, and certainly not if it was actively or intentionally negligent in causing the Current/Low injuries. (See Travelers Casualty, supra, 93 Cal.App.4th at p. 1157; see also Rossmoor, supra, 13 Cal.3d at p. 629.)” We reversed summary judgment for Fidelity because, while Fidelity supported its motion with an expert opinion declaration that RSI’s conduct was a substantial factor in causing Current and Low’s injuries, Great American presented competing evidence that Hunter Storm’s active conduct was the cause of their injuries, and “[a]s yet there has been no definitive finding or admission that RSI was negligent.” That remains the case.
Great American contended at oral argument that JPI would bar an insurer from a subrogation claim under these circumstances. It does not. It is true that in JPI, the court also affirmed grant of summary judgment against the general contractor and in favor of the subcontractor on the claim of the general contractor (JPI) for express contractual indemnity. (JPI, supra, 156 Cal.App.4th at p. 1467.) As the court noted, its review was directed to the issues framed by the pleadings, and that the undisputed facts showed that the subcontractor in that case (RJS) and its insurers (including Great American) had accepted defense of the underlying action, and had satisfied the entire judgment. (Ibid.) The undisputed facts therefore showed that the subcontractor had already indemnified JPI in full. (Ibid.) That is not the case here.
Division Two of this court has distinguished Rossmoor as an action between insureds, and held that in a direct action between insurers at the same level on the same risk, the doctrine of equitable contribution would apply, rather than subrogation, requiring apportionment of the loss, regardless of contractual indemnity provisions between the insured principals. (Travelers Casualty, supra, 93 Cal.App.4th at pp. 1156–1158.) In contrast, the Second District has held that an indemnitor’s primary insurer could not seek contribution from the indemnitee’s primary insurer where the indemnity liability was adjudicated, and that the intent of the insured parties, as expressed in their contract, should control. (Hartford Casualty Ins. Co. v. Mt. Hawley Ins. Co. (2004) 123 Cal.App.4th 278, 292–293 [citing Couch on Insurance].) “In a variety of commercial relationships, such as... contractor-subcontractor, the contracts between the parties contain indemnification agreements in which one agrees to hold the other harmless for its own acts of negligence or that of its employees. Such contractual arrangements can nullify a right to contribution.” (15 Couch on Insurance (3d ed. 1999) § 218:19, p. 218-25.) That issue is not before us and we express no opinion on that question.
The fact that Fidelity’s priority has been determined to be subordinate, as between insurance carriers, to a first party excess policy also covering its insured does not serve to limit the contractual obligations of an indemnitor to the insured principal as an indemnitee. To hold otherwise would, as the Supreme Court observed in Rossmoor, effectively negate the indemnity agreement and “impose liability on [Fidelity] when [Hunter Storm] bargained with [RSI] to avoid that very result.” (Rossmoor, supra, 13 Cal.3d at p. 634.) “When the parties knowingly bargain for the protection at issue, the protection should be afforded.” (Id. at p. 633.) Our decision does nothing to abrogate that principal.
III. Disposition
The order granting summary judgment to Great American is affirmed. We express no opinions on the merits of any unajudicated issues still pending before the trial court.
We concur: Jones, P. J., Needham, J.