Title: Essex Ins. v. Five Star Dye etc.

State: california

Issuer: California Supreme Court

Document:

1 
Filed 7/6/06 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
ESSEX INSURANCE COMPANY, 
) 
 
 
) 
 
Plaintiff, Cross-defendant,  
) 
 
and Appellant, 
) 
 
 
) 
S131992 
 
v. 
) 
 
 
) 
Ct.App. 2/5 B167295 
FIVE STAR DYE HOUSE, INC., 
) 
 
) 
Los Angeles County 
 
Defendant, Cross-complainant, )  
Super. Ct. No. BC 156517 
 
and Respondent. 
) 
____________________________________ ) 
 
In Brandt v. Superior Court (1985) 37 Cal.3d 813 (Brandt), this court held 
that in a tort action against an insurance company for breach of the duty of good 
faith and fair dealing, an insured may recover as damages those attorney fees that 
are incurred in the same action and are attributable to the attorney’s efforts to 
recover policy benefits that the insurer has wrongfully withheld.  We reasoned that 
when an insurer’s tortious conduct consists of depriving its insured of policy 
benefits, the attorney fees that the insured reasonably and necessarily incurs to 
obtain those policy benefits constitute an economic loss proximately caused by the 
insurer’s tort, and thus those attorney fees (now commonly referred to as Brandt 
fees) are recoverable as tort damages.  (Id. at pp. 817-819.) 
The issue here is this:  When an insured assigns a claim for bad faith 
against the insurer, and the assignee brings a tort action against the insurer that 
 
2 
includes a claim for wrongfully withheld policy benefits, may the assignee recover 
Brandt fees?  Our answer is “yes.” 
I.  FACTS AND PROCEDURAL BACKGROUND 
Luis Sanchez, doing business as L.A. Machinery Moving (hereafter 
Sanchez), was in the trucking business, specifically, transporting commercial 
machinery.  In June 1994, Sanchez contracted to deliver two commercial dryers to 
Five Star Dye House, Inc. (Five Star), a designer jeans manufacturer that uses 
dryers in the manufacturing process.  During transportation of the dryers, one fell 
while on Sanchez’s truck and was damaged.  Five Star refused to accept delivery 
of the damaged dryer. 
Five Star sued Sanchez for negligence (the underlying action), seeking as 
damages the profits it lost while the damaged dryer was being repaired.  Sanchez 
tendered defense of the action to his liability insurance carrier, Essex Insurance 
Company (Essex).  Essex denied coverage, however, and refused to defend 
Sanchez in the action.  Sanchez undertook a defense using his own funds; the trial 
resulted in a judgment against him for $1.35 million, plus costs. 
Sanchez then assigned to Five Star all of his claims and causes of action 
against Essex.1  In exchange, Five Star agreed to delay execution on the judgment 
in the underlying action until the claims against Essex for the judgment amount 
were exhausted.  Notwithstanding the assignment, Sanchez remained liable for the 
full judgment amount, plus interest.2 
                                              
1  
Not before us is the validity of the underlying assignment.  Therefore, for 
purposes of analysis, we assume its validity.  
2  
The assignment states:  “Luis Sanchez, dba L.A. Machinery Movers 
(‘Assignor’), conveys and assigns to Five Star Dye House, Inc., (‘Assignee’), all 
of its rights, remedies, titles and/or interest in and to any and all claims and/or 
causes of action against Essex Insurance Company (‘Essex’), arising from the 
 
(Footnote continued on next page.) 
 
3 
Essex then filed this action in superior court for declaratory relief against 
both Five Star and Sanchez.  Essex sought a declaration that it did not have a duty 
to defend Sanchez in the underlying action.  Under the assignment from Sanchez, 
Five Star cross-complained against Essex for, among other claims, breach of 
contract and tortious breach of the covenant of good faith and fair dealing.  During 
the course of the litigation, Sanchez was dismissed as a defendant in the 
declaratory judgment action, based on his assignment of all claims to Five Star. 
The trial court found the existence of an insurance contract between 
Sanchez and Essex, potential coverage under that policy for Five Star’s claim 
against Sanchez, and bad faith by Essex in not defending Sanchez in the 
underlying action.  The court awarded Five Star $1.6 million in damages against 
Essex, but it denied Five Star’s request for Brandt fees. 
The Court of Appeal affirmed the trial court’s judgment against Essex, but 
it reversed as to the denial of attorney fees.  The Court of Appeal held that when 
an insured assigns a bad faith cause of action against an insurer, the assignee 
receives the right to recover the policy benefits in full, including Brandt fees.  The 
court expressly disagreed with another Court of Appeal decision, Xebec 
                                                                                                                                      
 
 
(Footnote continued from previous page.) 
 
facts and circumstances regarding the lawsuit filed in the Superior Court of the 
State of California for the County of Los Angeles, bearing Case No. BC 119424, 
entitled Five Star Dye House, Inc. v. Rosco Machine Company, et al., (‘Five Star 
Lawsuit’), including but not limited to, claims and\or causes of action for Breach 
of Contract, Breach of the Covenant of Good Faith and Fair Dealing, Fraud and 
Declaratory Relief arising from Essex’ failure to provide a defense or indemnity to 
Assignor arising from the Five Star Lawsuit . . . .  In exchange for this assignment, 
Assignee agrees to defer collection of the judgment against Assignor until such 
time as all efforts to collect the judgment against Essex and/or any insurance 
broker and/or agent . . . have been exhausted.” 
 
4 
Development Partners, Ltd. v. National Union Fire Ins. Co. (1993) 12 
Cal.App.4th 501, 572 (Xebec), which held to the contrary. 
We granted Essex’s petition for review to determine whether assignment of 
a tort action against an insurer for wrongfully withholding policy benefits includes 
the right to recover Brandt fees. 
II.  LEGAL BACKGROUND 
A.  The American Rule and Brandt  
Embodied in Code of Civil Procedure section 1021, the “American rule” 
states that except as provided by statute or agreement, the parties to litigation must 
pay their own attorney fees.  In addition to its various statutory exceptions (see, 
e.g., Civ. Code, § 1717), the American rule is subject to common law exceptions 
that this court has created.  (Trope v. Katz (1995) 11 Cal.4th 274, 279.)  Brandt, 
supra, 37 Cal.3d 813, is the source of one such exception. 
In Brandt, an insured sued the insurer for breach of the implied covenant of 
good faith and fair dealing, seeking damages that included attorney fees.  (Brandt, 
supra, 37 Cal.3d at p. 816.)  Citing the American rule and Code of Civil Procedure 
section 1021, the trial court struck the portion of the complaint seeking attorney 
fees.  (Brandt, supra, 37 Cal.3d at p. 816.)  We held that when an insurer denies 
coverage in bad faith, the insured can recover attorney fees in an action to recover 
the policy benefits.  (Id. at p. 817.) 
After observing that an insurer’s breach of the covenant of good faith and 
fair dealing is a tortious act, we reasoned in Brandt:  “ ‘When such a breach 
occurs, the insurer is “liable for any damages which are the proximate result of 
that breach.”  [Citation.]’  [Citation.]  [¶]  When an insurer’s tortious conduct 
reasonably compels the insured to retain an attorney to obtain the benefits due 
under a policy, it follows that the insurer should be liable in a tort action for that 
 
5 
expense.  The attorney’s fees are an economic loss—damages—proximately 
caused by the tort.  [Citation.]  These fees must be distinguished from recovery of 
attorney’s fees qua attorney’s fees, such as those attributable to the bringing of the 
bad faith action itself.  What we consider here is attorney’s fees that are 
recoverable as damages resulting from a tort in the same way that medical fees 
would be part of the damages in a personal injury action.”  (Brandt, supra, 37 
Cal.3d at p. 817.)  
In a tort action for wrongful denial of policy benefits, Brandt allows the 
insured to recover as tort damages only the attorney fees incurred to obtain the 
policy benefits wrongfully denied.  (Brandt, supra, 37 Cal.3d at p. 819.)  But 
attorney fees expended to obtain damages exceeding the policy limit or to recover 
other types of damages are not recoverable as Brandt fees.  (Ibid.; see Cassim v. 
Allstate Ins. Co. (2004) 33 Cal.4th 780, 811-812 [attorney fees to obtain emotional 
distress damages and punitive damages not recoverable under Brandt].)  This 
follows from the rationale of Brandt:  The tort of bad faith against the insured 
entitles the insured to recover the policy benefits in full, undiminished by attorney 
fees, but not to recover attorney fees in general.  Allowing recovery of attorney 
fees incurred to obtain damages beyond the policy limit or to obtain punitive 
damages would allow the insured to recover attorney fees as attorney fees, 
violating the American rule, embodied in Code of Civil Procedure section 1021, 
that parties generally must pay their own attorney fees.  “Rather, Brandt merely 
entitles the insured to all of the benefits due under the policy, undiminished by the 
expenses incurred in retaining an attorney to recover under the policy.”  (Cassim v. 
Allstate Ins. Co., supra, at p. 815 (conc. & dis. opn. of Baxter, J.).) 
This court has in various decisions reaffirmed Brandt’s rule awarding 
attorney fees to an insured who is injured by the bad faith conduct of the insurer.  
(Cassim v. Allstate Ins. Co., supra, 33 Cal.4th at p. 806, fn. 10; White v. Western 
 
6 
Title Ins. Co. (1985) 40 Cal.3d 870, 890; see also Track Mortgage Group, Inc. v. 
Crusader Ins. Co. (2002) 98 Cal.App.4th 857, 867; Campbell v. Cal-Gard Surety 
Services, Inc. (1998) 62 Cal.App.4th 563, 571-572.)  The Brandt rule is now a 
well-settled but narrow exception to the general rule that each party to litigation 
must pay its own attorney fees. 
B.  The General Rule of Assignability 
California, as set forth both in case law and by statute, maintains a policy 
encouraging the free transferability of all types of property.  (See Civ. Code, 
§§ 954, 1044, 1458; Farmland Irrigation Co. v. Dopplmaier (1957) 48 Cal.2d 
208, 222; Robert H. Jacobs, Inc. v. Westoaks Realtors, Inc. (1984) 159 
Cal.App.3d 637, 645.)3  “[I]t is a fundamental principle of law that one of the 
chief incidents of ownership in property is the right to transfer it.”  (Bias v. Ohio 
Farmers Indemnity Co. (1938) 28 Cal.App.2d 14, 16.) 
This “chief incident of ownership” applies equally to tangible and 
intangible forms of property, including causes of action.  Originally codified in 
1872, section 954 states:  “A thing in action, arising out of the violation of a right 
of property, or out of an obligation, may be transferred by the owner.”  An 
assignment is a commonly used method of transferring a cause of action. 
Although the assignability of causes of action is derived from the common 
law, section 954 had the effect of liberalizing restrictions on the types of actions 
that may be assigned to a third party.  (Wikstrom v. Yolo Fliers Club (1929) 206 
Cal. 461, 464.)  We summarized the resulting state of the law as to the 
assignability of claims in Reichert v. General Ins. Co. (1968) 68 Cal.2d 822 
(Reichert).  In Reichert, the plaintiff purchased a 325-unit motel and received 
                                              
3  
Unless otherwise stated, all further statutory references are to the Civil 
Code. 
 
7 
assignments of multiple fire insurance policies for the premises.  (Id. at pp. 825-
826.)  Later, a fire caused significant damage to the motel.  (Id. at p. 826.)  After 
the insurance companies failed to indemnify the plaintiff for the damages, the 
plaintiff lost possession of the motel in bankruptcy.  (Id. at pp. 826-827.)  When 
the plaintiff sued the insurance companies for the resulting loss, they demurred to 
the complaint on the ground that the plaintiff’s causes of action had passed to the 
trustee in bankruptcy.  (Id. at pp. 828-829.)  Under bankruptcy law, the trustee in 
bankruptcy received all causes of action that the bankrupt could have assigned.  
(Id. at p. 829, citing 11 U.S.C. § 110.)  Thus, whether the plaintiff’s causes of 
action against the insurance companies were assignable was the central question in 
Reichert.  (Reichert, supra, at pp. 829-830.) 
This court in Reichert defined when a cause of action is assignable:  “As a 
general proposition it can be said ‘ “that the only causes or rights of action which 
are not transferable or assignable in any sense are those which are founded upon 
wrongs of a purely personal nature, such as slander, assault and battery, negligent 
personal injuries, criminal conversation, seduction, breach of marriage promise, 
malicious prosecution, and others of like nature.  All other demands, claims and 
rights of action whatever are generally held to be transferable.” ’ ”  (Reichert, 
supra, 68 Cal.2d at p. 834, quoting Wikstrom v. Yolo Fliers Club, supra, 206 Cal. 
at p. 463.)  We concluded that the plaintiff’s causes of action against the insurance 
companies for breach of their duties under the insurance policies were assignable, 
and thus they passed to the trustee in bankruptcy.  (Reichert, supra, at pp. 830, 
835-837.) 
Actions for bad faith against insurance companies can introduce 
problematic elements into this seemingly bright-line rule defining assignability of 
causes of actions, as shown by this court’s decision in Murphy v. Allstate Ins. Co. 
(1976) 17 Cal.3d 937 (Murphy).  There, the plaintiff sought to enforce a judgment 
 
8 
obtained in an earlier tort action by bringing a direct action against the tortfeasor’s 
insurance company, alleging breach of the insurer’s duty to the insured (the 
tortfeasor) by refusing to settle within policy limits.  (Murphy, supra, at pp. 939-
940.)  The trial court granted judgment on the pleadings for the defendant 
insurance company, and the plaintiff appealed.  (Id. at p. 939.) 
The plaintiff argued that the action was authorized by Insurance Code 
section 11580, subdivision (b)(2), or, alternatively, by former Code of Civil 
Procedure section 720.  (Murphy, supra, 17 Cal.3d at p. 940.)  This court found 
that the plaintiff could not pursue the claim under Insurance Code section 11580, 
subdivision (b)(2).  That provision merely made the judgment creditor a third 
party beneficiary of the insurance contract, allowing the judgment creditor to 
enforce only those contract provisions that were designed to benefit injured 
claimants.  The duty to settle and the covenant of good faith and fair dealing, 
however, were designed to benefit the insured, not injured third party claimants.  
(Id. at pp. 942-944.) 
This court in Murphy next considered former Code of Civil Procedure 
section 720, which then provided:  “ ‘If it appears that a person or corporation, 
alleged to have property of the judgment debtor, or to be indebted to him, claims 
an interest in the property adverse to him, or denies the debt, the judgment creditor 
may maintain an action against such person or corporation for the recovery of such 
interest or debt . . . .’ ”  (Murphy, supra, 17 Cal.3d at p. 945, fn. omitted; see now 
Code Civ. Proc., § 708.210 [“If a third person has possession or control of 
property in which the judgment debtor has an interest or is indebted to the 
judgment debtor, the judgment creditor may bring an action against the third 
person to have the interest or debt applied to the satisfaction of the money 
judgment.”].)  Under this provision, the judgment creditor may assert only those 
causes of action belonging to the judgment debtor that are assignable.  (Murphy, 
 
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supra, 17 Cal.3d at pp. 945-946.)  Thus, this court in Murphy addressed the 
question whether the insured’s causes of action against the insurer for breach of 
the duty to settle and breach of the covenant of good faith and fair dealing were 
assignable.  (Id. at pp. 945-946.) 
Under the particular facts at issue, we concluded that although the cause of 
action itself was assignable, it potentially included damages that were not 
assignable and therefore not recoverable in an action under former section 720 of 
the Code of Civil Procedure.  (Murphy, supra, 17 Cal.3d at p. 946.)  “The insured 
may assign his cause of action for breach of the duty to settle without consent of 
the insurance carrier, even when the policy provisions provide the contrary.  
[Citation.]  However, part of the damage arises from the personal tort aspect of the 
bad faith cause of action.  [Citation.]  And because a purely personal tort cause of 
action is not assignable in California, it must be concluded that damage for 
emotional distress is not assignable.  [Citations.]  The same is true of a claim for 
punitive damage.”  (Murphy, supra, 17 Cal.3d at p. 942.) 
This court in Murphy described the bad faith action against the insurer as a 
“hybrid cause of action,” one comprised of both assignable and nonassignable 
components.  (Murphy, supra, 17 Cal.3d at p. 946.)  Because the cause of action 
could not be split, allowing the injured claimant to proceed under former section 
720 of the Code of Civil Procedure would deprive the insured of any opportunity 
to recover the nonassignable damages (emotional distress damages and punitive 
damages) and thereby “defeat the very purpose of the cause of action.”  (Murphy, 
supra, at p. 946.)  Although we concluded in Murphy that the action was barred, 
we suggested how an assignment might be used in this situation to protect the 
interests of both the insured and the claimant:  “Requiring assignment before the 
claimant may proceed would of course insure notice to the insured that the 
claimant wished to proceed against the insurer.  At that point the insured would 
 
10 
have the choice of partially assigning and then joining in the action, or of 
bargaining for a release from liability in excess of coverage.  The release would 
permit the insured to protect himself from continued exposure to personal liability.  
Further, because the judgment creditor would then both own and control the cause 
of action against the insurer, he could attempt to satisfy his judgment thereby.  
Finally, the insured could protect his right to nonassignable claims for punitive, 
emotional and personal injury damage.”  (Id. at pp. 946-947.) 
C.  Conflicting Court of Appeal Decisions 
In Xebec, supra, 12 Cal.App.4th 501, Xebec Corporation entered into an 
agreement with Xebec Development Partners (XDP), whereby XDP would 
provide nearly $14 million to Xebec Corporation for research and development, 
and Xebec Corporation in exchange would assign to XDP the rights to new 
technology.  (Id. at p. 517.)  Later, XDP sued Xebec Corporation and two of its 
officers for misappropriating the funds earmarked for research and development.  
(Ibid.)  National Union Fire Insurance Company (National Union) claimed it had 
not received timely notice of the lawsuit and on this basis declined to defend the 
Xebec Corporation officers in the suit, which resulted in a stipulated arbitration 
award against Xebec Corporation and the two officers, on which judgment was 
then entered, in excess of $9 million.  (Id. at pp. 521-523.)  The arbitration 
settlement agreement included provisions under which Xebec Corporation 
assigned to XDP its rights against National Union.  (Id. at p. 523.)  Under this 
assignment, XDP sued National Union for refusing in bad faith to defend the 
officers of Xebec Corporation in the original lawsuit.  (Id. at p. 524.) 
The action was tried to a jury, which returned a general verdict against 
National Union for more than $7 million, and the trial court awarded XDP 
attorney fees under Brandt, supra, 37 Cal.3d 813.  (Xebec, supra, 12 Cal.App.4th 
 
11 
at pp. 526, 571.)  In a lengthy opinion dealing with a variety of issues arising from 
the complicated underlying factual situation, the Xebec Court of Appeal reversed 
the trial court’s ruling as to the award of Brandt fees to XDP, devoting just over 
one page to that issue.  (Id. at pp. 571-572.) 
The Court of Appeal in Xebec observed that XDP was “a third party 
claimant” and a “stranger to the policy.”  (Xebec, supra, 12 Cal.App.4th at p. 572.)  
As an assignee of the insured, XDP “could assert only those rights the insureds 
had had, and it could assert the rights only in the stead of the insureds.”  (Ibid.)  
Because none of the insureds had incurred attorney fees to compel payment of 
policy benefits, the Court of Appeal concluded that XDP could not assert their 
rights under Brandt, nor could it assert a right to Brandt fees on its own behalf 
because “the fees it thus incurred cannot be construed as tort damages to XDP, 
because National Union had no duty to XDP to pay policy benefits to anyone.”  
(Ibid., italics in original.) 
In this case, the Court of Appeal expressly disagreed with that analysis.  It 
focused on this court’s language in Murphy, supra, 17 Cal.3d at page 942, and in 
Reichert, supra, 68 Cal.2d at page 834, articulating the principle that all tort 
claims are assignable under section 954 except those of a purely personal nature.  
The Court of Appeal here reasoned that Brandt fees constitute an economic loss 
and are not personal in nature, and therefore under section 954 the right to recover 
Brandt fees is assignable.  It rejected Essex’s argument that because Brandt fees 
are tort damages, only fees incurred by the insured are recoverable.  It observed 
that the right assigned by Sanchez was the right to recover the policy benefits in 
full, “undiminished by the attorney fees incurred in bringing the actions to recover 
those benefits,” and that “[t]he identity of the party incurring attorney fees to 
vindicate the insured’s rights under the insurance policy is irrelevant . . . .” 
 
12 
III.  ANALYSIS 
We start from the proposition that assignability is the rule.  (§ 954.)  From 
that general rule we except those tort causes of actions “ ‘ “founded upon wrongs 
of a purely personal nature.” ’ ”  (Reichert, supra, 68 Cal.2d at p. 834.)  Actions 
for bad faith against an insurer have generally been held to be assignable 
(Communale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 661-662), 
including claims for breach of the duty to defend (Hamilton v. Maryland Casualty 
Co. (2002) 27 Cal.4th 718, 728).  Although some damages potentially recoverable 
in a bad faith action, including damages for emotional distress and punitive 
damages, are not assignable (Murphy, supra, 17 Cal.3d at p. 942), the cause of 
action itself remains freely assignable as to all other damages (id. at p. 946). 
Here, the claim that Sanchez assigned to Five Star is based on Essex’s 
tortious breach of its contract obligation under the policy to defend its insured, 
Sanchez, in the lawsuit brought against him by Five Star.  In suing on this 
assigned claim, Five Star has not sought damages for emotional distress or 
punitive damages, or damages for injury to reputation or other personal interests.  
What Five Star has sought to recover as tort damages is the monetary value of the 
policy benefits wrongfully withheld by Essex. 
As this court has explained, “[w]hen an insurer’s tortious conduct 
reasonably compels the insured to retain an attorney to obtain the benefits due 
under a policy,” the fees incurred for those attorney services “are an economic 
loss—damages—proximately caused by the tort.”  (Brandt, supra, 37 Cal.3d at 
p. 817.)  Those attorney fees do not possess any of the personal aspects that 
preclude assignment of other tort damages, such as damages for emotional 
distress.  They are not damages arising “from the personal tort aspect of the bad 
faith cause of action.”  (Murphy, supra, 17 Cal.3d at p. 942.) 
 
13 
We reject Essex’s argument that because Brandt fees are tort damages, they 
are recoverable only if incurred by the insured personally, rather than by the 
assignee.  “As a general rule, the assignee of a chose in action stands in the shoes 
of his assignor, taking his rights and remedies . . . .”  (Salaman v. Bolt (1977) 74 
Cal.App.3d 907, 919.)  Had Sanchez brought the bad faith action against Essex, 
his right to recover Brandt fees would be unquestioned.  As the assignee of 
Sanchez’s claim against Essex, Five Star stands in his shoes, and so may assert his 
right to recover any Brandt fees incurred in prosecuting the assigned claim.  We 
agree with the Court of Appeal here that the right that Sanchez assigned to Five 
Star was the “right to recover the policy benefits in full, undiminished by the 
attorney fees incurred in bringing the action to recover those benefits.”  Were we 
to accept Essex’s argument, Sanchez would no longer be assigning the right to 
recover the policy benefits in full. 
Essex also argues that allowing Five Star, an assignee, to recover Brandt 
fees from it would not serve to make the insured whole, which is the essential 
purpose of Brandt fees, because, under the terms of the assignment from Sanchez 
to Five Star, the amount that Five Star recovers as Brandt fees will not reduce 
Sanchez’s liability on the judgment in the underlying action.  We disagree.  In 
exchange for the assignment, Five Star agreed to defer collection of the judgment 
against Sanchez until “all efforts to collect the judgment against Essex . . . have 
been exhausted.”  (See fn. 2, ante.)  Thus, all sums recovered from Essex, 
including Brandt fees, will be credited against the judgment in the underlying 
action, directly reducing Sanchez’s liability to Five Star. 
Disallowing recovery of Brandt fees in cases such as this would result in a 
windfall for the insurer, whose liability for tortious conduct would be significantly 
reduced because of the fortuitous circumstance of the assignment of the bad faith 
claim.  As we have recognized, recoverable Brandt fees may exceed the contract 
 
14 
benefits wrongfully withheld.  (Cassim v. Allstate Ins. Co., supra, 33 Cal.4th at 
p. 809.)  Disallowing recovery of Brandt fees incurred by assignees would also 
tend to discourage assignment of bad faith claims against insurance companies, 
contrary to the public policy favoring transferability of causes of action. 
IV.  CONCLUSION 
We conclude that an insured’s assignment of a cause of action against an 
insurance company for tortious breach of the covenant of good faith and fair 
dealing by wrongfully denying benefits due under an insurance policy carries with 
it the right to recover Brandt fees that the assignee incurs to recover the policy 
benefits in the lawsuit against the insurance company.4 
The Court of Appeal’s judgment is affirmed.  
 
 
 
 
 
 
 
 
KENNARD, J. 
WE CONCUR: 
 
GEORGE, C. J. 
BAXTER, J. 
WERDEGAR, J. 
CHIN, J. 
MORENO, J. 
CORRIGAN, J. 
 
                                              
4  
Xebec Development Partners, Ltd. v. National Union Fire Ins. Co., supra, 
12 Cal.App.4th 501, is disapproved insofar as it is inconsistent with this 
conclusion. 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Essex Insurance Company v. Five Star Dye House, Inc. 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 125 Cal.App.4th 1569 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S131992 
Date Filed: July 6, 2006 
__________________________________________________________________________________ 
 
Court: Superior 
County: Los Angeles 
Judge: Kenneth R. Freeman 
 
__________________________________________________________________________________ 
 
Attorneys for Appellant: 
 
Carroll, Burdick & McDonough, David M. Rice, Laurie J. Hepler, Troy M. Yoshino, Don Willenburg, 
John D. Boyle, Donna P. Arlow; Murchison & Cumming, Jean M. Lawler, Edmund G. Farrell and Bryan 
M. Weiss for Plaintiff, Cross-defendant and Appellant. 
 
Wiley Rein & Fielding, Laura A. Foggan, Gary P. Seligman; Sinnott, Dito, Moura & Puebla, Randolph P. 
Sinnott and John J. Moura for Complex Insurance Claims Litigation Association as Amicus Curiae on 
behalf of Plaintiff, Cross-defendant and Appellant. 
 
 
__________________________________________________________________________________ 
 
Attorneys for Respondent: 
 
Dodell Law Corporation, Herbert Dodell and Gerald J. Miller for Defendant, Cross-complainant and 
Respondent. 
 
Gianelli & Morris, Robert S. Gianelli, Sherril Nell Babcock; Ernst & Mattison, Don A. Ernst and Raymond 
E. Mattison for Consumer Attorneys of California as Amicus Curiae on behalf of Defendant, Cross-
complainant and Respondent. 
 
 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Edmund Farrell 
Muchison & Cumming 
801 South Grand Avenue, 9th Floor 
Los Angeles, CA  90017 
(213) 630-1087 
 
Herbert Dodell 
Dodell Law Corporation 
12121 Wilshire Boulevard, Suite 600 
Los Angeles, CA  90025 
(310) 824-1515