Opinion
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. RG03101684.
NEEDHAM, J.
St. Paul Fire and Marine Insurance Company (St. Paul) appeals from a judgment of dismissal entered after the court granted a motion for judgment on the pleadings filed by cross-defendant Great American Insurance Company (Great American). (Code Civ. Proc., § 438.) Taking judicial notice of a prior order denying St. Paul summary judgment, the court concluded that its cross-complaint did not state a cause of action for the recovery of defense costs paid on behalf of a mutual insured in an underlying lawsuit. We affirm.
Further statutory references are to the Code of Civil Procedure unless otherwise indicated.
I. Facts and Procedural History
St. Paul issued a $1 million primary general liability policy to Roof Structures, Inc. (RSI), the roofing subcontractor on a warehouse construction project in Fremont, California. Great American issued a $10 million excess general liability policy to RSI. Both policies named the owner of the warehouse, Hunter/Storm/Durham & 680 (Hunter/Storm), and the general contractor, South Bay Construction (South Bay), as additional insureds.
During construction of the warehouse in 1998, a portion of the roof collapsed and three RSI employees--Mickey Current, Robert Low and Daniel Ramos--fell to the ground. Ramos was killed and Current and Low were seriously injured. Ramos’s heirs filed an action for wrongful death against South Bay, while Current and Low filed a separate personal injury action against Hunter/Storm and South Bay. St. Paul assumed the defense of Hunter/Storm and South Bay in these lawsuits.
In January 2003, the Ramos action settled for $1.905 million, which was funded with $955,000 from the St. Paul policy and $950,00 from a $1 million primary policy issued to South Bay by Underwriters Insurance Company (Underwriters). In April 2003, the Current/Low action settled for $4 million, funded with the $45,000 that remained of St. Paul’s policy limits, the $50,000 that remained of Underwriters’s policy limits, $1,952,500 from the excess policy issued by Great American to RSI and $1,952,500 from Fireman’s Fund Insurance Company, which had issued a $25 million excess policy insuring South Bay. The insurers contributing to the settlements reserved their rights to seek contribution and indemnity from one another.
Great American filed a complaint for declaratory relief, equitable contribution and equitable subrogation against St. Paul and other insurers, seeking recovery for some or all of the amount it had paid to fund the Current/Low settlement. St. Paul filed a cross-complaint seeking declaratory relief and equitable subrogation against Great American and Underwriters. As to Great American, the cross-complaint alleged: (1) Great American was obligated to pay any liability in excess of St. Paul’s $1 million policy limits, (2) St. Paul had provided a defense to Hunter/Low and South Bay in the underlying actions, (3) the Ramos settlement eventually totaled $1.905 million and would have been sufficient to exhaust St. Paul’s policy limits, but Underwriters and Great American refused to fund or consent to a settlement that would have exhausted those limits, and had thus “forced” St. Paul to continue defending the Current/Low claims until a settlement in that case was reached; and (4) Great American had refused to contribute to the defense of the underlying claims even though the claims could not reasonably be settled within the limits of St. Paul’s primary policy.
Most of the claims and defenses of the insurers hinged upon an indemnity clause in the subcontract signed by RSI and South Bay, which required RSI to indemnify South Bay and Hunter/Storm for certain acts. The effect of that indemnity clause is not an issue in this appeal, which involves the allocation of costs between RSI’s own insurers. Although we need not discuss it here, we have addressed the effect of the South Bay-RSI indemnity clause in our unpublished opinions in the related appeals in Great American Insurance Company of New York v. Fidelity and Guaranty Insurance Company (A112817), S.B.C.C. v. Roof Structures, Inc. (A112825) and Great American Insurance Company of New York v. Fireman’s Fund Insurance Company (A117186).
St. Paul moved for summary judgment on its claims. (§ 437c.) The hearing was held before the Honorable Steven A. Brick, who denied the motion. In his written order, Judge Brick acknowledged that Great American had taken certain positions during settlement negotiations that were “unsupported by California law. . . . Nonetheless, it is undisputed that when the ‘Ramos’ action settled, the portion of that settlement funded by St. Paul did not exhaust its policy limits. Accordingly, Great American’s duty to defend was not triggered until the ‘Current and Low’ action was settled several months later, at which point defense costs ceased.”
Great American then filed a motion for judgment on the pleadings, asking the court to take judicial notice of Judge Brick’s prior order denying summary judgment. It argued in its motion that St. Paul could not state a cause of action for declaratory relief or equitable subrogation based on Great American’s alleged duty to pay a portion of defense costs when the prior order established that Great American had no duty to defend and thus no duty to pay such costs. St. Paul opposed the request for judicial notice on the ground that a court record cannot be considered for the truth of its contents. It further argued that taking judicial notice of Judge Brick’s prior order would impermissibly elevate an interim order denying summary judgment into a final judgment on the merits.
The motion for judgment on the pleadings was heard by Judge Kenneth Burr, who took judicial notice of Judge Brick’s prior order determining that Great American had no duty to defend under its excess policy until St. Paul had exhausted the limits of its primary policy. In his written order, Judge Burr explained: “The Court agrees with case law holding that a judge’s factual findings, even when made after a contested adversary hearing, are not indisputably true, and cannot be judicially noticed. [Citations.] However, in this case Great American seeks judicial notice of Judge Brick’s ruling that St. Paul was not entitled to reimbursement for defense costs incurred between the time of the settlement in Ramos and the time of the settlement in the Current/Low action because Great American’s duty to defend was not triggered until the Current/Low action was settled. The Court can properly take judicial notice of the fact that a ruling has been made. [Citation.]
“The Court finds that Great American is entitled to judgment on the pleadings against the claims in St. Paul’s cross-complaint because the only basis for denying the motion is the possibility that the Court will issue an order at trial that contradicts Judge Brick’s ruling. St. Paul’s allegations in the First and Second Causes of Action in its Cross-Complaint are incompatible with the ruling that Great American’s duty to defend was not triggered until the settlement in the Current/Low action. A judge of the superior court ordinarily does not have the power to overturn, enjoin, or declare void the orders of another judge. People v. Gonzalez (1996) 12 Cal.4th 804, 815. Even if this Court had the power to overturn the prior ruling, it would not do so without some persuasive reason beyond mere disagreement with the correctness of the order. St. Paul has not provided any persuasive reason for the Court to deviate from the previous order, which was issued after a noticed hearing with full briefing from all affected parties. To the contrary, the Court’s interest in efficient resolution of disputes, and its desire to avoid inconsistent rulings, fully support an order granting judgment on the pleadings at this time. [Citation.].”
St. Paul filed a motion to vacate the order granting judgment on the pleadings, a motion to amend its cross-complaint, a motion for new trial and a motion for clarification of the ruling. (See generally §§ 438, subd. (a)(h), 657, 663.) The court denied the motions and entered a judgment in favor of Great American. St. Paul appeals.
II. Discussion
We review an order granting a motion for judgment on the pleadings in the same manner as an order sustaining a general demurer. We examine the language of the pleadings de novo, together with matters subject to judicial notice, to determine whether the facts alleged are sufficient to constitute a cause of action. (O’Neil v. General Security Corp. (1992) 4 Cal.App.4th 587, 594, fn. 1; Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 877 (Cantu).) If the motion is granted without leave to amend, we review that determination for abuse of discretion. (Cantu at p. 879, fn. 9.)
Section 438 allows a cross-defendant to move for judgment on the pleadings on the ground that the cross-complaint “does not state facts sufficient to constitute a cause of action against that [cross-]defendant. . . .” (§ 438, subd. (c)(1)(B)(ii).) The grounds for such a motion “shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice. Where the motion is based on a matter of which the court may take judicial notice . . . the matter shall be specified in the notice of motion, or in the supporting points and authorities, except as the court may otherwise permit.” (§ 438, subd. (d).)
Judicial notice may be taken of state court records, including orders that have been made by the court. (Evid. Code, § 452, subd. (d).) But hearsay statements within those records cannot be deemed true simply because they are contained within a court file. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1564 (Sosinsky).) A court may therefore take judicial notice that a prior order was entered, but it may not take judicial notice of the truth of factual findings made therein. (See Kilroy v. State of California (2004) 119 Cal.App.4th 140, 145; Sosinsky, at pp. 1564-1565, 1568-1570.) “[T]he taking of judicial notice that the judge believed A (i.e., that the judge ruled in favor of A on a particular factual dispute) is different from the taking of judicial notice that A’s testimony must necessarily have been true simply because the judge believed A and not B. Indeed, if A’s testimony consisted of ‘facts. . . that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy’ (Evid. Code, § 452, subd. (h)), there would have been no need for a trial on the dispute between A and B in the first place.” (Sosinsky,at p. 1565.)
St. Paul’s cross-complaint against Great American sought to recover defense costs that it had expended on behalf of Hunter/Storm and South Bay in the underlying lawsuits. An excess insurer such as Great American generally has no duty to pay defense costs until the primary insurance has been exhausted. (Community Redevelopment Agency v. Aetna Casualty & Surety Co. (1996) 50 Cal.App.4th 329, 338-340 (Community Redevelopment).) In granting Great American’s motion for judgment on the pleadings, Judge Burr took judicial notice of Judge Brick’s prior order denying St. Paul’s motion for summary judgment and, in particular, his ruling that Great American did not have a duty to defend because St. Paul’s policy limits had not been exhausted by the Ramos settlement. St. Paul argues that in so doing, Judge Burr erroneously took judicial notice of the truth of the facts underlying the ruling on the duty to defend.
We disagree. Judge Burr did not take judicial notice of the truth of any factual findings made by Judge Brick, but of the fact that a particular ruling had been made on an issue of law—namely, that Great American was not required to provide a defense under its excess policy until St. Paul’s primary policy had been exhausted. Having taken judicial notice of the existence of the prior ruling that Great American had no duty to defend, Judge Burr correctly invoked the rule that one trial judge generally cannot reconsider and overrule an order of another trial judge. (People v. Gonzalez, supra, 12 Cal.4th at p. 815.) Great American was entitled to judgment in its favor unless there was some basis for disregarding the general rule that precludes overruling a prior order by a different trial judge. “ ‘For one superior court judge, no matter how well intentioned, even if correct as a matter of law, to nullify a duly made, erroneous ruling of another superior court judge places the second judge in the role of a one-judge appellate court.’ Th[is] rule also discourages forum shopping, conserves judicial resources, prevents one judge from interfering with a case ongoing before another judge and prevents a second judge from ignoring or arbitrarily rejecting the order of the previous judge which can amount to a violation of due process.” (People v. Riva (2003) 112 Cal.App.4th 981, 991, footnotes omitted; see also Bradley v. Duncan (9th Cir. 2002) 315 F.3d 1091, 1098; Wyoming Pacific Oil Co. v. Preston (1958) 50 Cal.2d 736, 739-740, superseded by statute on other grounds as stated in Watts v. Crawford (1995) 10 Cal.4th 743, 761.)
This principle is distinct from the doctrines of law of the case and res judicata. Law of the case applies when an appellate court states an opinion or principle necessary to its decision, which is then binding upon the lower court and the parties in any further proceeding or subsequent appeal. (People v. Barragan (2004) 32 Cal.4th 236, 246.) Res judicata prevents parties from relitigating matters resolved in a previous proceeding and requires a final judgment on the merits. (Citizens for Open Access etc. Tide, Inc. v. Seadrift Assn. (1998) 60 Cal.App.4th 1053, 1065.) Neither applies to an interim order by a trial court denying a motion for summary judgment.
St. Paul argues that Judge Burr abused his discretion by taking judicial notice of an interim order granting summary judgment from which there was no right of appeal. We disagree. Under Evidence Code section 452, “Judicial notice may be taken of . . . . [¶] . . . [¶] (d) Records of (1) any court of this state. . . .” However, “The trial court shall take judicial notice of any matter specified in Section 452 if a party requests it and: (a) Gives each adverse party sufficient notice of the requests, through the pleadings or otherwise, to enable such adverse party to prepare to meet the request; and (b) furnishes the court with sufficient information to enable it to take judicial notice of the matter.” (Evid. Code, § 453, italics added.) Great American met these procedural requirements.
We also reject St. Paul’s suggestion that in taking judicial notice of the prior order denying summary judgment, the court gave preclusive effect to an interim order and ran afoul of the rule that the denial of summary judgment to one party does not entitle the other to judgment as a matter of law. The court did not grant Great American’s motion because it determined the prior order was binding per se or because judgment had been previously denied to St. Paul. Rather, it properly concluded there was no basis for overruling a prior order by a different judge--an order that proved to be dispositive when evaluating Great American’s entitlement to judgment.
Even if we were to conclude that Judge Burr should not have taken judicial notice of Judge Brick’s prior order, judgment on the pleadings was appropriately granted based on the four corners of St. Paul’s cross-complaint. That pleading alleged that two insurance policies issued to RSI were in effect during the period when the underlying accident occurred: a $1 million primary policy issued by St. Paul and a $10 million excess policy issued by Great American. Although the cross-complaint does not quote the specific policy language regarding each carrier’s duty to defend, an excess insurer generally has no duty to defend or pay defense costs until the primary policy exhausts. (See Signal Companies, Inc. v. Harbor Ins. Co. (1980) 27 Cal.3d 359, 367-368 (Signal); Community Redevelopment, supra, 50 Cal.App.4th at pp. 338-340; Olympic Ins. Co. v. Employers Surplus Lines Ins. Co. (1981) 126 Cal.App.3d 593, 600-602.) As counsel for St. Paul acknowledged at oral argument, paragraph 18 of the cross-complaint states that the Ramos settlement did not exhaust the $1 million limit of the primary policy, even though the total amount of the settlement funded by it and Underwriters was greater than those limits.
In relevant part, paragraph 18 of the cross-complaint states: “The Ramos settlement eventually totaled $1,905,000 and was sufficient to exhaust the policy limits of the St. Paul policy, at which time St. Paul’s duty to provide a defense in the Current and Low action should have been and in fact was extinguished. Notwithstanding, . . . Great American purposefully and with the specific intent to compel and manipulate St. Paul to continue to pay the entirety of the defense costs, refused to fund and/or consent to a settlement of the Ramos action which exhausted St. Paul’s [policy] limits and unjustly and without proper cause forced St. Paul to maintain some limits on its primary policy and continue to pay the entirety of the defense costs. Furthermore, from in or about September 2002 and continuing into 2003, Great American failed to undertake defense of the underlying actions at such time that such actions could not reasonably be settled within the limits of St. Paul’s primary coverage, such that Great American has waived its policy conditions and is bound by the claims handling decisions of St. Paul in accordance with the decision in Diamond Heights Homeowners Assn. v. National American Ins. Co. (1991) 227 Cal.App.3d 563.”
St. Paul also suggests its cross-complaint stated a cause of action notwithstanding its failure to exhaust its policy limits in the Ramos settlement. It notes that a primary insurer such as itself may negotiate a good faith settlement that invades excess coverage (Diamond Heights Homeowners Assn. v. National American Ins. Co. (1991) 227 Cal.App.3d 563, 578 (Diamond Heights)), and from this principle reasons that it was entitled to contribution for defense costs. St. Paul frames the issue as “how the principles of equity should operate in instances in which an excess insurer unjustifiably prevents a primary insurer from properly funding the underlying settlement.”
In Signal, supra, 27 Cal.3d at p. 369, the Supreme Court did suggest that a “compelling equitable consideration” might require an excess insurer to contribute to defense costs incurred by a primary insurer. But it concluded that such a situation was not presented where the primary carrier had assumed the defense pursuant to its contractual obligation to defend, had incurred its defense costs before the settlement of the underlying action, and had failed to negotiate any agreement with the excess carrier to pay defense costs as a term of that settlement. (Id. at pp. 369-370.) “[N]o equitable basis appears for shifting to [the excess carrier] costs which [the primary carrier] had previously incurred primarily on its own behalf, in discharge of its own contractual obligations.” (Id. at p. 370.)
Although the cross-complaint in this action alleges that Great American “refused to fund and/or consent to a settlement of the Ramos action which exhausted St. Paul’s limits,” it does not allege facts supporting a conclusion that Great American had a legal or contractual right to control St. Paul’s adjustment of the claim in any way. Nor does the cross-complaint state any other facts giving rise to an equitable claim trumping the general rule that an excess insurer has no obligation to provide a defense before primary coverage is exhausted. St. Paul’s citation of Diamond Heights, supra, 227 Cal.App.3d 563, which stands for the proposition that a primary insurer may reach a settlement that invades excess coverage, does not support St. Paul’s theory that its contribution of most but not all of its policy limits triggered a duty on Great American’s part to pay defense costs.
Moreover, we find no abuse of discretion in granting the motion for judgment on the pleadings without leave to amend. (See Baughman v. State of California (1995) 38 Cal.App.4th 182, 187.) St. Paul had the burden of establishing that it could amend the cross-complaint to state a cause of action. At oral argument, counsel indicated that St. Paul could provide more specific allegations concerning the manner in which Great American interfered with St. Paul’s negotiation of the Ramos settlement, and could allege the specific language in the insurance policies concerning the duty to defend. But counsel did not explain what these more specific allegations would be, and the language in the insurance policies themselves does not assist St. Paul’s claim.
The St. Paul primary policy provided: “Right and duty to defend. We’ll have the right and duty to defend any claim or suit for covered injury or damage . . . made or brought against any protected person. We’ll do so even if any of the allegations of any such claim or suit are groundless, false or fraudulent. But we have no duty to perform other acts or services. And our duty to defend claims or suits ends when we have used up the limits of coverage that apply with the payment of judgments, settlements or medical expenses.” (Italics added.) The Great American policy provided: “If there is no ‘underlying insurance’ obligated to do so, we shall have the right and duty to defend any ‘suit’ against the ‘insured’ seeking damages because of ‘injury,’ even if the allegations of the ‘suit’ are groundless.” (Italics added.) “Underlying Insurance” was defined as “the liability insurance coverage provided under policies shown in the Schedule of Underlying Insurance, for the limits and periods indicated.” St. Paul’s primary policy was listed on Great American’s schedule of underlying insurance.
The policies are contained in the appellate record and St. Paul’s counsel agreed at oral argument that they include the language quoted above. We take judicial notice of the policy language as a fact not reasonably subject to dispute for the limited purpose of determining whether the court should have granted leave to amend the cross-complaint; i.e., whether inclusion of the policy language would have enabled St. Paul to state a claim, as it suggested. (See Evid. Code, §§ 452, subd. (h), 459.)
This language makes it clear that St. Paul was contractually obligated to defend the underlying lawsuits until its coverage was exhausted. It is equally clear from Great American’s policy that it had the duty to defend only if there was no underlying insurance obligated to do so. Even if St. Paul were given the opportunity to include this specific policy language in its cross-complaint, it would not be able to state a cause of action. (Community Redevelopment, supra, 50 Cal.App.4th at pp. 338-340.)
Finally, we are not persuaded by St. Paul’s argument that the court should have granted its motion for new trial based on insufficient evidence and errors in law. (See § 657, pars. 6. & 7.) As we have explained, the order granting judgment on the pleadings was legally correct and supported by the record.
III. Disposition
The judgment is affirmed. Costs on appeal are awarded to respondent Great American.
We concur. JONES, P. J., REARDON, J.
Judge of the Superior Court of Alameda County, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.