Filed 2/10/21 Gonzalez v. Soares CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

FRANCISCO GONZALEZ,

Plaintiff and Appellant,

v.

JOSE SOARES, as Trustee, etc., et al.,

Defendants and Respondents.

F077672

(Super. Ct. No. 2003946)

OPINION

APPEAL from a judgment of the Superior Court of Stanislaus County. 

Timothy W. Salter, Judge.

Perez, Williams, Medina & Rodriguez and Antonio Rodriguez, Jr., for Plaintiff

and Appellant.

Law Offices of Matthew G. Salazar, Craig A. Caldwell; Hayes, Scott, Bonino, 

Ellingson, Guslani, Simonson & Clause and Mark G. Bonino for Defendants and 

Respondents.

-ooOoo-
2.

Plaintiff sued defendants to recover for injuries he sustained in a fire. Defendants 

asserted they were plaintiff’s employers, and his action was barred by the exclusive 

remedy provisions of the workers’ compensation law. The trial court tried that issue first, 

agreed with defendants, and entered judgment in their favor. We find no error in the trial 

court’s decision and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff filed this action against “Jose Soares, individually and dba Joe D. Soares 

and Jose D. Soares Dairy; Teresa Soares; J&T Soares 2006 Trust;” and Does. (Some 

capitalization omitted.) By later amendment, he identified two of the Doe defendants as 

Jose D. Soares as trustee for the J&T Soares 2006 Trust and Teresa Soares as trustee for 

the J&T Soares 2006 Trust. In a single cause of action labeled “Premises Liability,”

plaintiff alleged that, on August 1, 2013, he was residing in a home “negligently owned, 

maintained, managed and operated” by defendants, when a fire in the home resulted in 

severe burn injuries and loss of personal property. Defendants’ amended answer to the 

complaint denied the allegations of the complaint, and asserted as an affirmative defense 

that, at the times alleged in the complaint, plaintiff was in the course and scope of his 

employment with defendants, and plaintiff’s claim was barred because defendants were 

entitled to the exclusive remedy protection of workers’ compensation law.

The trial court conducted the first phase of a bifurcated trial, which addressed 

defendants’ affirmative defense that plaintiff’s claim was barred by the exclusive remedy 

under workers’ compensation law.1 The parties stipulated to a number of facts, 

including: On August 1, 2013, plaintiff was employed by Jose and Teresa2to work at a 

1 Apparently, prior to trial, plaintiff dismissed Jose Soares, individually and dba (doing 

business as) Jose D. Soares Dairy, and Jose D. Soares Dairy as defendants in the case. The trial 

proceeded against Teresa individually, and Jose and Teresa as trustees of the J&T Soares 2006 

Trust.

2 We refer to the parties by their first names for clarity and convenience, because some of 

them share a last name or have multiple last names. No disrespect is intended.
3.

dairy they operated as a sole proprietorship; at that time, plaintiff was living in a

mobilehome on the dairy premises; plaintiff was in the mobilehome when it caught fire 

and he suffered burn injuries; title to the mobilehome and the premises was held by Jose 

and Teresa as trustees of the J&T Soares 2006 Trust, a revocable living trust. The parties 

also stipulated that: As a result of his injuries, plaintiff filed a workers’ compensation 

claim against Jose Soares Dairy, Jose Soares dba Jose Soares Dairy, Teresa Soares, and 

Jose D. Soares Dairy; plaintiff’s injuries were sustained while he was in the course and 

scope of his employment with Jose and Teresa; the only policy of workers’ compensation 

insurance in effect at the time was a policy with Zenith Insurance Company (Zenith); and 

Zenith filed a notice of lien in this civil action, asserting a lien on any settlement or 

judgment in favor of plaintiff and against anyone other than Jose Soares dba Jose Soares 

Dairy. Certain documents from the workers’ compensation proceeding were also 

admitted at the trial.

After trial, the trial court issued a tentative decision, to which plaintiff objected.

The trial court then issued an amended decision. It found the parties stipulated in the 

workers’ compensation proceeding that plaintiff’s employer was Jose Soares dba Jose 

Soares Dairy; other potential employers were then dismissed, and plaintiff’s injury was 

found compensable. The trial court concluded defendants adequately raised the exclusive 

workers’ compensation remedy as an affirmative defense in the answer. It found Teresa, 

as an individual, established the defense by showing she was plaintiff’s employer, along 

with Jose, and plaintiff’s injury occurred in the course of his employment. The trial court 

concluded the Zenith policy of workers’ compensation insurance covered Teresa because 

it insured the sole proprietorship dairy, of which both Jose and Teresa were the owners.

Regarding the liability of Jose and Teresa as trustees, the trial court found there 

was no distinction, under California law, between property owned by a revocable trust 

and property owned by the settlor of the trust during the lifetime of the settlor. It 

concluded ownership of the mobilehome by the trust did not deprive the employer of the 
4.

protection of the workers’ compensation exclusive remedy. Consequently, it held Jose 

and Teresa were immune to civil liability for plaintiff’s injuries because plaintiff’s claim 

was barred by the exclusive remedy provisions of the workers’ compensation law.3 The 

trial court entered judgment in favor of Jose, as trustee of the J&T Soares 2006 Trust, and 

in favor of Teresa, individually and as trustee of the trust. Plaintiff appeals from the 

judgment.

DISCUSSION

I. Pleading the Exclusive Remedy of Workers’ Compensation

Plaintiff contends defendants did not adequately plead the affirmative defense that 

the workers’ compensation remedy was the exclusive remedy for plaintiff’s claims, 

because the affirmative defense in the answer mentioned only Labor Code section 3601,4

which did not apply in this case. At trial, defendants asserted the defense was adequately 

alleged, but requested that, if the trial court found the pleading inadequate, defendants be 

allowed to amend to add a reference to section 3602. Plaintiff stated he had no objection 

and requested his own amendment of the complaint. After posttrial briefing, the trial 

court found the defense was alleged in defendants’ answer, had been “argued and 

litigated throughout [the] matter,” and therefore had been properly raised in the action.

In addition to a general or specific denial of the complaint’s material allegations, 

the answer to a complaint must contain “[a] statement of any new matter constituting a 

defense.” (Code Civ. Proc., § 431.30, subd. (b).) “The defenses shall be separately 

stated, and the several defenses shall refer to the causes of action which they are intended 

to answer, in a manner by which they may be intelligibly distinguished.” (Code Civ. 

Proc., § 431.30, subd. (g).) Normally, a challenge to the sufficiency of the pleading of a 

3 The trial court also concluded plaintiff’s property damage claims were not barred. Those 

claims were later settled by the parties and are not at issue in this appeal.

4 All further statutory references are to the Labor Code unless otherwise indicated.
5.

defense in the answer is raised by demurrer. (Code Civ. Proc., § 430.20.) It presents a 

question of law for the court. (Ferraris v. Levy (1963) 223 Cal.App.2d 408, 412.)

When a party completely fails to plead an affirmative defense in its answer, it is 

deemed to have waived the defense. (California Academy of Sciences v. County of 

Fresno (1987) 192 Cal.App.3d 1436, 1442.) When the pleading of the defense is merely 

defective, however, the “allegations must be liberally construed, with a view to 

substantial justice between the parties.” (Code Civ. Proc., § 452.) “ ‘[T]he question is 

whether the pleading as a whole apprises the adversary of the factual basis of the 

[defense].’ ” (Jackson v. Superior Court (1994) 30 Cal.App.4th 936, 942.) No “ ‘defect 

in a pleading is to be regarded unless it affects substantial rights.’ [Citation.] The 

primary function of a pleading is to give the other party notice so that it may prepare its 

case [citation], and a defect in a pleading that otherwise properly notifies a party cannot 

be said to affect substantial rights.” (Harris v. City of Santa Monica (2013) 56 Cal.4th 

203, 240.)

“[G]enerally speaking, a defendant in a civil action who claims to be one of that 

class of persons protected from an action at law by the provisions of the Workers’

Compensation Act bears the burden of pleading and proving, as an affirmative defense to 

the action, the existence of the conditions of compensation set forth in the statute which 

are necessary to its application.” (Doney v. Tambouratgis (1979) 23 Cal.3d 91, 96.) 

“Those conditions are set forth in Labor Code section 3600 ....” (Ibid. at fn. 7.) 

Section 3600 provides: “Liability for the compensation provided by this division, in lieu 

of any other liability whatsoever to any person ... , shall, without regard to negligence, 

exist against an employer for any injury sustained by his or her employees arising out of 

and in the course of the employment,” if specified conditions are met. (§ 3600, 

subd. (a).)

Sections 3601 and 3602 reiterate that workers’ compensation is the exclusive 

remedy for an employee’s injuries, when the conditions for compensation exist. 
6.

Section 3601 provides, in part: “Where the conditions of compensation set forth in

Section 3600 concur, the right to recover such compensation, pursuant to the provisions 

of this division is, except as specifically provided in this section, the exclusive remedy for 

injury or death of an employee against any other employee of the employer acting within 

the scope of his or her employment,” with specified exceptions. (§ 3601, subd. (a), italics 

added.) Under section 3602, “[w]here the conditions of compensation set forth in

Section 3600 concur, the right to recover compensation is, except as specifically provided 

in this section and Sections 3706 and 4558, the sole and exclusive remedy of the 

employee or his or her dependents against the employer.” (§ 3602, subd. (a), italics 

added.)

In their original answer and in their amended answer, defendants alleged as an 

affirmative defense, under the heading “Workers Compensation - Labor Code - Exclusive 

Remedy”:

“At all times alleged in the complaint, the plaintiff was in the course and scope of 

his employment with defendant, and therefore defendant is entitled to the 

exclusive remedy protections of the Labor Code including, but not limited to, 

Labor Code § 3601, thereby barring all of the claims herein.” (Boldface omitted.)

Plaintiff contends that, because his claim was against his employers rather than 

against a co-employee, section 3601 did not apply, and no other section was invoked. 

Liberally construed, however, the basis of the affirmative defense was identified as the 

exclusive remedy of workers’ compensation found in the Labor Code, in section 3601 

and others. The defense alleged plaintiff was in the course of his employment with 

defendants when the events alleged in the complaint occurred. Although sections 3600 

and 3602 appear to be the applicable Labor Code sections, rather than section 3601, they 

were both within one section of section 3601, and both pertained to the exclusive remedy 

of the workers’ compensation statutes.

Plaintiff has not cited any authority requiring that defendants’ answer cite the 

particular code section on which their defense was based. In Hata v. Los Angeles County 
7.

Harbor/UCLA Medical Center (1995) 31 Cal.App.4th 1791 (disapproved on another 

ground in Quigley v. Garden Valley Fire Protection Dist. (2019) 7 Cal.5th 798, 815, 

fn. 8), the answer alleged the plaintiff’s claims were “ ‘barred by the terms of California 

Government Code §§ 854-856.6.’ ” (Hata, at p. 1804.) The court found this language 

sufficient to plead the bar of the immunity granted in Government Code section 854.8. It 

concluded the plaintiff waived any objection that the pleading was defective by failing to 

demur to the answer or to object to introduction of the immunity defense under that 

section at trial; if the issue had been raised, the trial court likely would have allowed 

amendment. (Hata, at pp. 1804–1805.) Further, the defense was adequately pled. The 

section relied on was included in the sections cited in the affirmative defense, and, in 

light of the claims alleged in the complaint, it gave the plaintiff sufficient notice that the 

defendant was relying on the specific immunity defense of Government Code 

section 854.8. (Hata, at p. 1805.) The court noted that Code of Civil Procedure 

section 458 requires that, when pleading the statute of limitations, the statutory section

and subdivision relied on must be specifically stated. (Hata, at p. 1806.) Nothing in that 

statute, however, authorized the extension of the rule to any other situation, and the 

plaintiff had not cited any other legal authority requiring identification of the particular 

code section the defendant relied on. (Id. at pp. 1805, 1806.)

In Jessen v. Mentor Corp. (2008) 158 Cal.App.4th 1480, the defendant pled as an 

affirmative defense that the plaintiff’s recovery was barred “ ‘based upon the doctrine of 

federal pre-emption and/or pre-emption by the Medical Device Amendments to the Food, 

Drug and Cosmetic Act.’ ” (Id. at p. 1483, fn. 3.) The defendant was not “required to 

plead a specific code section to raise preemption as a defense to Jessen’s claims.” (Ibid.) 

Additionally, it was not credible that the plaintiff’s experienced attorney did not receive 

sufficient notice of this preemption defense because the defendant failed to include a 

code section. (Ibid.)
8.

Plaintiff has cited no authority requiring defendants to allege the specific code 

section on which they based their affirmative defense that plaintiff’s claim was barred by 

the exclusive remedy provisions of the workers’ compensation law. Plaintiff did not 

demur to defendants’ answer on the ground of uncertainty; if he had, the trial court likely 

would have granted leave to amend to add the appropriate code sections. In the course of 

litigation, defendants moved for summary judgment, asserting that defendants were 

“entitled to the Exclusive Remedy protection of ... § 3600 et seq.,” and quoting from 

sections 3600 and 3602. Plaintiff’s opposition to the motion for summary judgment 

acknowledged that the issue raised in the motion was whether his action was “barred by 

the Exclusive Remedy Rule of ... § 3600 et seq.,” and in particular by section 3602, and 

he argued the issue on the merits.

Based on the provision in Code of Civil Procedure section 431.30, subdivision (g), 

that “[t]he defenses shall be separately stated,” plaintiff argues that each code section was 

required to be set out in a separate defense. The defense, however, was that plaintiff’s 

claim in this civil action was barred by the exclusive remedy provisions of the workers’ 

compensation law. While different aspects of the remedy are set out in different code 

sections, and the exclusive nature of the remedy is repeated in multiple sections, the bar 

of the workers’ compensation remedy constitutes but one defense for pleading purposes.

Plaintiff has not established any error in the trial court’s ruling. The affirmative 

defense asserted the exclusivity of the workers’ compensation remedy as a bar to 

plaintiff’s claims. Defendants were not required to allege a particular code section in the 

defense. Plaintiff also has not established any prejudice. Plaintiff’s opposition to 

defendants’ motion for summary judgment illustrates he was aware, prior to trial, that

defendants based their defense on sections 3600 and 3602. He had ample opportunity to 

prepare to meet the issue at trial. Additionally, at trial, defendants asked that, if the trial 

court deemed the defense inadequately alleged, they be granted leave to amend to insert a 

reference to section 3602. Plaintiff had no objection to that request.
9.

We conclude the trial court correctly determined the affirmative defense was 

sufficiently alleged in the amended answer.

II. Application of Exclusive Remedy Defense to Teresa

Under section 3600, compensation under the workers’ compensation law is an 

employee’s exclusive remedy for a work-related injury when the following conditions are 

met:

“(1) Where, at the time of the injury, both the employer and the employee are 

subject to the compensation provisions of this division.

“(2) Where, at the time of the injury, the employee is performing service growing 

out of and incidental to his or her employment and is acting within the course of 

his or her employment.

“(3) Where the injury is proximately caused by the employment, either with or 

without negligence.” (§ 3600, subd. (a).)5

The workers’ compensation remedy does not apply, however, if the “employer 

fails to secure the payment of compensation.” (§ 3706.) A private employer may secure 

the payment of compensation by obtaining a policy of workers’ compensation insurance 

or a certificate of consent to self-insure. (§ 3700.) Defendants raised the defense of the 

exclusive workers’ compensation remedy and bore the burden of proving that the 

conditions for compensation under that scheme were met. (Doney v. Tambouratgis,

supra, 23 Cal.3d at p. 96.)

The evidence at trial included records of the workers’ compensation proceedings. 

The first amended application for adjudication of claim named Jose Soares Dairy, Jose 

Soares, individually and dba Jose Soares Dairy, Teresa Soares, and Jose and Teresa 

Soares Dairy, as plaintiff’s employer; it identified Zenith as the insurer. Zenith filed a 

petition for joinder of the Uninsured Employers Benefits Trust Fund. It asserted it 

5 The statute sets out a number of additional conditions, none of which are in issue in this 

case.
10.

insured Jose Soares dba Jose Soares Dairy, but did not insure the others listed. Zenith 

stated the other entities did not appear to be insured and asked that the Uninsured 

Employers Benefits Trust Fund be joined as a defendant for the other entities. The 

request was granted.

In the workers’ compensation proceeding, the parties stipulated “that the employer 

in this matter is the listed insured on [the Zenith policy] (Jose Soares DBA Jose Soares 

Dairy). All other named Defendants are hereby dismissed without prejudice.” The 

stipulation was signed on behalf of Jose and Teresa, individually. The decision in the 

workers’ compensation proceeding concluded plaintiff was in the course and scope of 

employment when he was injured by the fire, and therefore he was entitled to workers’ 

compensation benefits.

In this civil action, the parties stipulated that, at the time of his injury, plaintiff was 

employed by Jose and Teresa to work at the dairy, and Jose and Teresa were operating 

the dairy as a sole proprietorship. They also stipulated that the only policy of workers’ 

compensation insurance in effect at the time was the Zenith policy. Thus, plaintiff’s 

exclusive remedy against Teresa was a workers’ compensation award only if the Zenith 

policy insured her against workers’ compensation liability.

A. Rules of contract interpretation

Determining whether Teresa was covered by the Zenith policy requires 

interpretation of the provisions of that policy. “Ordinary rules of contract interpretation 

apply to insurance policies.” (Hervey v. Mercury Casualty Co. (2010) 185 Cal.App.4th 

954, 961 (Hervey).) We interpret a contract de novo if the interpretation does not turn on 

the credibility of extrinsic evidence. (City of Manhattan Beach v. Superior Court (1996) 

13 Cal.4th 232, 238.)

A contract must be construed as a whole, giving effect to all of its provisions, if 

reasonably possible or practicable. (City of Atascadero v. Merrill Lynch, Pierce, Fenner 

& Smith, Inc. (1998) 68 Cal.App.4th 445, 473.) The fundamental goal of contractual 
11.

interpretation is to give effect to the mutual intention of the parties at the time the 

contract was formed. (Civ. Code, § 1636.) “If contractual language is clear and explicit, 

it governs. [Citation.] On the other hand, ‘[i]f the terms of a promise are in any respect 

ambiguous or uncertain, it must be interpreted in the sense in which the promisor 

believed, at the time of making it, that the promisee understood it.’ [Citations.] This 

rule, as applied to a promise of coverage in an insurance policy, protects not the 

subjective beliefs of the insurer but, rather, ‘the objectively reasonable expectations of the 

insured.’ ” (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264–1265.) 

Additionally, parol evidence is admissible to aid in interpreting an insurance policy if the 

terms are ambiguous. (Hervey, supra, 185 Cal.App.4th at p. 962.)

B. Interpretation of Zenith policy

In the General Section of the policy, under the heading “Who Is Insured,” the 

Zenith policy provided: “You are insured if you are an employer named in Item 1 of the 

Information Page. If that employer is a partnership, and if you are one of its partners, you 

are insured, but only in your capacity as an employer of the partnership’s employees.” 

Item 1 on the Information Page identified the insured as Jose Soares dba: Jose Soares 

Dairy. Item 1 also identified the “entity” as an “individual.” (Capitalization omitted.) 

The undisputed evidence at trial was that Jose and Teresa jointly owned the dairy and 

employed plaintiff to work there.

Defendants successfully argued in the trial court that an endorsement to the policy 

created an ambiguity. They cited endorsement No. 14, the Sole Proprietor Exclusion 

Endorsement (the endorsement). It identified the named insured as Jose Soares, then 

provided:

“It is agreed that such insurance as is afforded by the policy DOES NOT 

APPLY TO INJURY, including DEATH resulting therefrom, sustained by 

the insured, a SOLE PROPRIETOR:”
12.

Immediately below this language, the endorsement listed the names of Teresa 

Soares and Jose Soares, each followed by the title “OWNER.” At the bottom of the same 

page, the insured was identified as Jose Soares Dairy.6

The evidence at trial indicated Jose and Teresa married in 1981 and had owned the 

dairy together for approximately 35 years at the time of trial in 2017. They renewed their 

workers’ compensation policy annually. Before the 2013 workers’ compensation policy 

went into effect, the dairy’s secretary/bookkeeper, Manuela Avila (who was also Jose’s 

niece), sent payroll information to the insurance broker. The broker prepared a written 

proposal, which indicated it was prepared for Jose and Teresa. Jose, Teresa, and Avila 

met with the broker, and Jose and Teresa chose the coverage to buy. The broker 

presented the workers’ compensation policy as one written for Jose and Teresa. Jose 

testified that it was his intention, when he purchased workers’ compensation insurance 

for the dairy, that the policy would cover both him and Teresa. Both Jose and Teresa 

testified they could not read English.

“The California Workers’ Compensation Act (Act) provides an elaborate and 

complete scheme for the adjudication of claims by employees against employers for 

injuries arising out of the course and scope of employment. [Citations.] The workers’ 

compensation statute has long been held to provide the exclusive remedy against an 

employer for work-related death or injury with a few statutory and judicially created 

exceptions.” (Rymer v. Hagler (1989) 211 Cal.App.3d 1171, 1177.) “The underlying 

purpose of the Act is to provide employees a quick, simple, and readily accessible 

method of claiming and receiving compensation for work-related injuries. [Citation.] 

The statute was intended to require adequate insurance coverage against the liability to 

pay or furnish compensation.” (Id. at p. 1183.)

6 The same footer, identifying the insured as Jose Soares Dairy, appears at the bottom of 

many of the pages of the policy.
13.

“In general, ‘when a worker is entitled to workers’ compensation benefits for an 

injury, those benefits constitute the worker’s exclusive remedy against his or her 

employer for injuries sustained in the course of employment. [Citation.]’ [Citation.] 

‘[T]he legal theory supporting such exclusive remedy provisions is a presumed 

“compensation bargain,” pursuant to which the employer assumes liability for industrial 

personal injury or death without regard to fault in exchange for limitations on the amount 

of that liability. The employee is afforded relatively swift and certain payment of 

benefits to cure or relieve the effects of industrial injury without having to prove fault 

but, in exchange, gives up the wider range of damages potentially available in tort.’ ” 

(Employers Mutual Liability Ins. Co. v. Tutor-Saliba Corp. (1998) 17 Cal.4th 632, 637.) 

The workers’ compensation system serves four purposes: “(1) to ensure that the cost of 

industrial injuries will be part of the cost of goods rather than a burden on society, (2) to 

guarantee prompt, limited compensation for an employee’s work injuries, regardless of 

fault, as an inevitable cost of production, (3) to spur increased industrial safety, and (4) in 

return, to insulate the employer from tort liability for his employees’ injuries.” (S.G. 

Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 354.)

In this case, plaintiff was employed by Jose and Teresa, a married couple who 

owned and operated the dairy known as Jose Soares Dairy. Through the dairy’s 

secretary/bookkeeper, Jose and Teresa provided the insurance broker with payroll 

information regarding the dairy’s employees, which enabled the broker to prepare a 

proposal for them for the workers’ compensation coverage. After receiving the proposal, 

they purchased a policy of workers’ compensation insurance. It is undisputed that the 

workers’ compensation policy compensated plaintiff for his work-related injury. It 

served the purposes of the workers’ compensation statutes: providing prompt 

compensation for plaintiff’s injuries, regardless of fault, and passing the cost on as part of 

the cost of production of the dairy’s products.
14.

As the trial court recognized, the policy presented an ambiguity as to the identity 

of the insured. The policy was issued to cover the workers’ compensation obligation to 

the employees of the dairy business, but the named insured was identified as an 

individual. The dairy, however, was not owned and operated by an individual. As the 

insurer acknowledged in the endorsement, the dairy was owned by both spouses, Jose and 

Teresa.

We must construe the insurance policy to protect the objectively reasonable 

expectations of the insured. (Hervey, supra, 185 Cal.App.4th at p. 961.) When a married 

couple who jointly own a business seek a policy of workers’ compensation insurance to 

cover their potential liability to the employees of the business, a reasonable insured

would expect the policy provided to cover the entire liability of the business, protecting 

both of the business owners. A reasonable insured would not expect the policy to single 

out one spouse for coverage, leaving the other civilly liable for the employees’ injuries 

and for any penalties imposed for failure to maintain insurance as required by the 

workers’ compensation law.

The named insured designated in the policy was “Jose Soares [¶] dba: Jose Soares 

Dairy.” (Some capitalization omitted.) The dairy was a family business. At the time 

Jose and Teresa purchased the Zenith policy, Jose ran the business with the help of their 

sons; Teresa was primarily a homemaker but still sometimes went to the office and 

signed checks, went to meetings, and helped her husband manage the business. The 

name of the insured on the Information Page of the policy included “Jose Soares Dairy”

(some capitalization omitted), one of the names under which the dairy operated. 

Additionally, throughout the policy, the insured was repeatedly referred to as “Jose 

Soares Dairy.” These references would lead a reasonable person to believe Jose Soares 

Dairy was insured under the policy. Although the named insured was listed as “Jose 

Soares [¶] dba: Jose Soares Dairy” (some capitalization omitted), to the average insured 

lacking legal training, the significance of the “dba” designation would not be apparent. 
15.

Reference to the name of the dairy in the designation of the insured throughout the policy 

would lead to a reasonable expectation that the entire workers’ compensation liability of 

Jose Soares Dairy—the business jointly owned by Jose and Teresa—was covered by the 

policy.

Plaintiff cites cases for the proposition that each employer must carry workers’ 

compensation insurance, and if any employer is not insured or permissibly self-insured, 

that employer may be held civilly liable for its employees’ injuries. The cases cited are 

inapposite.

In Strickland v. Foster (1985) 165 Cal.App.3d 114, a truck driver was employed 

by Foster, who was in the business of furnishing trucks and drivers to other businesses. 

(Id. at p. 116.) The driver was working for Logex Trucking Company at the time he was 

injured and died. The truck driver’s widow (the plaintiff), obtained a workers’ 

compensation death benefit award jointly and severally against Logex’s insurer and 

against Foster, who was not insured. (Ibid.) The plaintiff also sued Foster in a judicial 

action. (Id. at p. 117.) The court concluded the plaintiff was entitled to sue Foster, an 

uninsured employer, despite the workers’ compensation award and despite any recovery 

against Logex. (Id. at pp. 117–118.) It held that, in a case of dual employment, each 

employer must secure payment of workers’ compensation. (Id. at pp. 118–119.)

In Huffman v. City of Poway (2000) 84 Cal.App.4th 975, the plaintiff was an actor 

who was injured while working on a play coproduced by two entities, Reunion 

Productions and Arts Alive! Foundation (AAF). (Id. at p. 979.) The plaintiff had 

received workers’ compensation benefits from the self-insured city, which owned the 

facility where the plaintiff was injured, and which the plaintiff claimed was his coemployer. (Id. at pp. 981, fn. 6, 983.) The plaintiff sued AAF for damages, but the jury 

found he was employed by a joint venture of Reunion and AAF, and the trial court 

concluded workers’ compensation was the plaintiff’s only remedy against AAF. (Id. at

p. 984.)
16.

The court noted section 3706 provided an exception to the exclusivity of the 

workers’ compensation remedy, which applied when the employer failed to secure the 

payment of such compensation. (Huffman v. City of Poway, supra, 84 Cal.App.4th at

p. 984.) AAF did not have either a policy of workers’ compensation insurance or a 

certificate of consent to self-insure, as required by section 3700. (Huffman, at pp. 984–

985.) Consequently, workers’ compensation benefits were not the plaintiff’s exclusive 

remedy against AAF, and AAF could still be sued for damages as an uninsured employer. 

(Id. at p. 987.)

In Hernandez v. Chavez Roofing, Inc. (1991) 235 Cal.App.3d 1092, the plaintiffs’ 

decedent was killed while working for his employer, a roofing subcontractor who had no 

contractor’s license or workers’ compensation insurance. (Id. at pp. 1093–1094.) The 

plaintiffs sued the subcontractor for wrongful death. The subcontractor argued that, 

under section 2750.5, an unlicensed subcontractor and its employees are deemed to be 

employees of the general contractor for workers’ compensation purposes. (Hernandez, at

p. 1095.) Therefore, it concluded, the plaintiffs’ exclusive remedy was workers’ 

compensation benefits, and only the general contractor, who was insured, was liable for 

those. (Ibid.) The court rejected that argument. “In effect [the subcontractor] wants us 

to declare that a violation of the law requiring a contractor’s license can protect an 

employer from the consequences of a violation of the law requiring workers’ 

compensation insurance. Under this approach more culpability means less liability.” 

(Ibid.) Instead, it concluded: “Section 2750.5 can create a dual employment relationship 

whereby a worker may be an employee of both a general contractor and a subcontractor. 

[Citation.] The price that must be paid by each employer for immunity from tort liability 

is the purchase of a workers’ compensation policy. [Citation.] [The subcontractor] chose 

not to pay that price, so it should not be immune from liability.” (Ibid.)

In Zimmerman v. Industrial Acc. Com. (1931) 119 Cal.App. 253, Zimmerman, an 

individual doing business as Royal Paint and Wall Paper Company, was the insured 
17.

under a policy of workers’ compensation insurance. (Id. at p. 254.) He took on a partner, 

Stern, and they continued to operate the business under the same name, without 

informing the insurer of the newly added partner or making any change in the insurance 

policy. (Ibid.) An employee of the business was subsequently injured at work and 

applied for workers’ compensation benefits. (Id. at pp. 254–255.) The Industrial 

Accident Commission (predecessor of the Workers’ Compensation Appeals Board)

7

found Zimmerman’s act of taking on a partner voided the workers’ compensation policy 

as to him. (Id. at p. 255.) The reviewing court held that Zimmerman was covered by the 

policy for his workers’ compensation liability to the employee; he was the named insured 

under the policy, and continued to operate the business under that name, even after 

adding a partner. (Ibid.) The partner, however, was uninsured; “the policy designated ... 

Zimmerman, an individual, as the insured; and under no possible theory, therefore, can 

the fact that Stern afterwards entered into a partnership with Zimmerman operate as a 

matter of law to extend the terms of the insurance contract to cover Stern, individually or 

otherwise.” (Ibid.)

Strickland, Huffman, and Hernandez involved cases of dual employment; the 

employee was found to be employed by two separate businesses, each of which had an 

obligation to obtain either a policy of workers’ compensation insurance or a certificate of 

consent to self-insure in order to comply with the workers’ compensation law. Here, 

there was no dual employment. Plaintiff was employed by only one business, which was 

owned by a married couple.

Zimmerman is also distinguishable. The workers’ compensation policy was issued 

to the individual owner of the business employing the injured worker. At the time, there 

was only one owner and neither he nor the insurer had any intention of insuring a partner 

or partnership that did not then exist. After the addition of the partner, the insured 

7 See Ramirez v. Workers’ Comp. Appeals Bd. (2017) 10 Cal.App.5th 205, 220, fn. 7.
18.

individual did not inform the insurer of that addition or request coverage for the partner 

or the partnership. The court found no basis for extending coverage beyond what was 

intended by the owner and the insurer at the time the policy was issued.

Here, the dairy business was at all times owned by both Jose and Teresa. It went 

by the name Jose Soares Dairy. At the time the Zenith policy was issued, the insurer 

knew the dairy was owned by both spouses, as indicated in the endorsement. The 

exemplar of Zenith’s invoice for policy premiums listed as the insured “Jose Soares” and 

“Jose Soares Dairy.” (Capitalization omitted.) The combination of the inclusion of the 

name “Jose Soares Dairy” in many of the designations of the named insured in the policy, 

the insurer’s subsequent conduct in sending premium invoices listing both Jose Soares 

and Jose Soares Dairy as the insured, and the acknowledgement in the endorsement that 

the dairy had two owners was sufficient to cause a reasonable person to believe the 

Zenith policy satisfied the obligation of both of the dairy’s owners to insure the dairy 

with workers’ compensation coverage for the benefit of its employees.

We conclude the trial court did not err in determining Teresa’s liability for 

workers’ compensation benefits was within the coverage of the Zenith policy. 

Consequently, workers’ compensation was plaintiff’s exclusive remedy against both Jose 

and Teresa for his injuries sustained in the mobilehome fire.

III. Application of Exclusive Remedy Defense to Trustees

In addition to suing Teresa individually, plaintiff also sued Jose and Teresa as 

trustees of the J&T Soares 2006 Trust, based on allegations of premises liability. The 

parties stipulated that title to the mobilehome and the premises where plaintiff was 

injured was held in the names of Jose and Teresa, as trustees of the J&T Soares 2006 

Trust, a revocable living trust, and Jose and Teresa were the only trustees of that trust. 

The trial court found Jose and Teresa as trustees could not be held civilly liable to 

plaintiff for his injuries separately from Jose and Teresa as individuals, because there was 

no legal distinction between the two.
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“Under California law, a revocable inter vivos trust is recognized as simply ‘a 

probate avoidance device, but does not prevent creditors of the settlors—who are often 

also the trustees and the sole beneficiaries during their lifetimes—from reaching trust 

property.’ ” (Zanelli v. McGrath (2008) 166 Cal.App.4th 615, 633.) “If the settlor 

retains the power to revoke the trust in whole or in part, the trust property is subject to the 

claims of creditors of the settlor to the extent of the power of revocation during the 

lifetime of the settlor.” (Prob. Code, § 18200.) This rule recognizes “that when property 

is held in this type of trust, the settlor and lifetime beneficiary ‘ “has the equivalent of full 

ownership of the property.” ’ ” (Zanelli, at p. 633.) Thus, “at least for most purposes 

‘[t]here is no distinction in California law between property owned by the revocable trust 

and property owned by the settlor of such a revocable trust during the lifetime of the 

settlor.’ ” (Carolina Casualty Ins. Co. v. L.M. Ross Law Group, LLP (2010) 

184 Cal.App.4th 196, 208.)

To establish that the trust could not be held liable to plaintiff separately from Jose 

and Teresa as individuals, the burden was on defendants to demonstrate that the trust was 

of the type subject to the rule. They were required to establish the trust was revocable 

and Jose and Teresa were the settlors.

The parties stipulated that Jose and Teresa were the sole trustees of the J&T 

Soares 2006 Trust, a revocable living trust. They also stipulated the mobilehome and 

premises were assets of the trust. Plaintiff contends defendants failed to demonstrate they 

were the settlors of the trust.

At trial, there was testimony that Jose and Teresa married in 1981. They 

subsequently started the dairy business8and jointly owned it thereafter. They were the 

only owners of the dairy business. Jose testified he purchased the property where the fire 

8 Teresa testified she and Jose had owned the dairy for 34 or 35 years at the time of trial in 

2017, which indicates they owed it from approximately 1982 or 1983.
20.

occurred in 2009 or 2010. Consistent with the stipulation that the mobilehome and the 

premises were assets of the trust, Jose testified some of his and Teresa’s property was 

held in a family trust. Some of the property of the dairy business, such as motor vehicles, 

was not held in the trust. Avila’s deposition testimony that the dairy business owned 

about 15 mobilehomes was also admitted.

We conclude there was substantial evidence supporting the trial court’s inference 

that Jose and Teresa owned the dairy business and its assets, and placed some of those 

assets, including the mobilehome where the fire occurred and the premises on which it 

was located, in the J&T Soares 2006 Trust. The trust was stipulated to be a revocable 

living trust. The trial court properly treated the trust property as property owned by the 

settlors, Jose and Teresa.

Because substantial evidence supports the finding that the trust is of the type that 

cannot be held liable, separately from Jose and Teresa individually, for the condition of 

the mobilehome and the premises held in the trust at the time of plaintiff’s injury, the trial 

court correctly found that workers’ compensation was plaintiff’s exclusive remedy 

against Jose and Teresa, individually and as trustees of the J&T Soares 2006 Trust.

DISPOSITION

The judgment is affirmed. Defendants are entitled to their costs on appeal.

HILL, P.J.

WE CONCUR:

POOCHIGIAN, J.

DETJEN, J.