1

Filed 9/22/21; Certified for Publication 10/15/21 (order attached)

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

THE TRAVELERS INDEMNITY 

COMPANY OF CONNECTICUT,

Plaintiff and Appellant,

v.

NAVIGATORS SPECIALTY 

INSURANCE COMPANY et al.,

Defendants and Respondents.

 D078852

 (Super. Ct. No. CV275515)

APPEAL from a judgment of the Superior Court of Santa Clara County, 

Mary E. Arand, Judge. Reversed and remanded.

The Aguilera Law Group, A. Eric Aguilera, Raymond E. Brown and 

Lindsee B. Falcone for Plaintiff and Appellant.

Morison & Prough, Prough Law, Michael D. Prough and Dean C. 

Burnick for Defendant and Respondent Mt. Hawley Insurance Company.

Gordon Rees Scully Mansukhani, Matthew G. Kleiner, George P. 

Soares and Tiffany Chiu for Defendant and Respondent Navigators Specialty 

Insurance Company.
2

The Travelers Indemnity Company of Connecticut (Travelers) appeals 

from an order sustaining the demurrers filed by Navigators Specialty 

Insurance Company (Navigators) and Mt. Hawley Insurance Company (Mt. 

Hawley) to the third amended complaint. Travelers contends that the trial 

court incorrectly concluded that the causes of action for equitable 

contribution and equitable indemnity fail to state a claim. Travelers also 

argues that, in the event we contend that the trial court properly sustained 

the demurrers, we should order that Travelers be given leave to amend its 

complaint to plead a claim for equitable subrogation. 

We conclude that the trial court erred in sustaining the demurrers to

both the equitable contribution and equitable indemnity causes of action. 

Accordingly, we reverse the judgment and remand for further proceedings. 

I.

FACTUAL AND PROCEDURAL BACKGROUND

In the instant action, Travelers seeks to recover from other insurance 

carriers some or all of the amounts it paid to defend TF McGuckin, Inc., 

(TFM) in an underlying construction defect litigation. 

A. The Underlying Construction Defect Action and Travelers’ Agreement to 

Provide a Defense to TFM Subject to a Reservation of Rights

As alleged by Travelers,1 the underlying construction defect litigation 

was filed on December 15, 2010, in a complaint entitled Corvin Business

Center Owners’ Association, et al. v. Corvin Commercial Condominiums, LLC, 

et al., Santa Clara County Superior Court, Case No. 110CV189732 (the 

construction defect action). TFM was allegedly the “general

1 As this appeal is from an order sustaining demurrers, we necessarily 

base our factual recitation on the facts as they are alleged in Travelers’ 

operative third amended complaint, along with any documents subject to 

judicial notice. 
3

contractor/developer” of a condominium construction project that contained 

construction defects. 

Travelers alleges that, as part of the condominium construction project, 

TFM entered into agreements with subcontractors. Among those 

subcontractors were F&F Steel and Stairway, Inc. (F&F) and Calvac Inc. dba 

Calvac Paving (Calvac). According to Travelers, each of TFM’s agreements 

with its subcontractors contained a provision which required the 

subcontractor to defend and indemnify TFM with respect to any claim or 

liability arising out of that subcontractor’s work on the construction project.

Further, as Travelers alleged, the agreements between TFM and its 

subcontractors required each subcontractor to maintain general liability 

insurance and to name TFM as an additional insured on the subcontractors’ 

insurance policies. Navigators allegedly issued general liability insurance 

policies to F&F that met this requirement. Travelers allegedly issued such 

insurance policies to Calvac. 

After the construction defect action was filed, Travelers conducted an 

investigation and decided to provide TFM with a defense subject to a 

reservation of rights.2 Travelers’ agreement to provide a defense was based 

on its conclusion that “the damage alleged to the Project actually or 

potentially falls within the scope of the indemnity and defense obligations of 

the subcontractors, and each of them, as set forth in their subcontract 

agreements with [TFM].” Therefore, “[s]ubject to a reservation of rights and 

based on a good faith and reasonable belief that it had a duty to do so, 

2 At the time it filed its third amended complaint in June 2018, Travelers 

had allegedly paid over $498,000 to defend TFM. According to the parties, 

TFM was dismissed with prejudice from the construction defect action in 

2017, and Travelers is no longer paying any defense costs to TFM. 
4

[Travelers] agreed to provide [TFM] with a defense to the Construction Defect 

Action pursuant to policies issued to [Calvac].” 

B. Travelers Files the Instant Action Against Navigators and Mt. Hawley

In January 2015, Travelers filed the instant action to recover from 

various third parties some or all of the defense costs that it paid to defend 

TFM in the construction defect action. Travelers’ first amended complaint 

added Navigators and Mt. Hawley as defendants. Mt. Hawley was named as 

a defendant because it allegedly issued insurance policies to TFM.3 

Navigators was added as a defendant because it allegedly issued insurance 

policies to F&F. 

Travelers’ first amended complaint (and subsequently, identically, its 

second amended complaint) alleged three causes of action against Navigators

and Mt. Hawley: declaratory relief, equitable contribution, and equitable 

indemnity. Specifically, Travelers alleged that both Mt. Hawley and 

Navigators had a duty to defend TFM in the construction defect litigation 

based on their applicable insurance policies but failed to comply or fully 

comply with that obligation. Therefore, Travelers sought a declaration that 

TFM’s defense costs should be equitably apportioned between it, Mt. Hawley,

and Navigators. Travelers also sought an order requiring that Mt. Hawley 

and Navigators be required to reimburse an equitable share of the defense 

costs already paid by Travelers, either under the principle of equitable 

3 The only information Travelers alleged about the insurance policies Mt. 

Hawley issued to TFM was as follows: “[Travelers] is informed and believes, 

and thereupon alleges, that Mt. Hawley insured [TFM] via policy number 

MGL0141639 and MGL0149236, for the periods of 1/22/05 - 1/22/06 and 

1/22/06 - 1/22/07, and is informed and believes, and thereupon alleges that 

Mt. Hawley has a duty to defend [TFM] against the Construction Defect 

Action pursuant to the terms and conditions of such policy.”
5

contribution, or in the alternative, the principle of equitable indemnity. In 

the equitable contribution cause of action, Travelers alleged, “To the extent 

that [Travelers] pays or is required to pay more than its equitable share of 

any sums attributable to [TFM’s] defense against the Construction Defect 

Action, [Travelers] is entitled to recover from Insurer Defendants, and each of 

them, who paid less than their equitable share.” In the cause of action for 

equitable indemnity, Travelers alleged that “Insurer Defendants . . . are 

primarily and/or exclusively liable for the defense costs of [TFM], and thus in 

equity are required to reimburse [Travelers] for their equitable share of said 

defense costs.” 

C. Travelers Files a Third Amended Complaint

In March 2018, Travelers filed a motion for leave to file a third 

amended complaint. Travelers explained that recently-obtained evidence 

called into question whether the insurance policies it issued to Calvac gave 

rise to a duty to defend TFM in the construction defect action, and that 

Travelers had been “deceived into providing a defense for [TFM].” 

Specifically, Travelers obtained evidence showing that TFM and Calvac had 

signed a new subcontractor agreement only after the construction defect 

action was filed, but that the agreement was fraudulently backdated to make 

it appear that it was entered into at the time of the construction project.

Travelers explained that the subcontractor agreement between Calvac and 

TFM in existence prior to the filing of the construction defect action did not 

require Calvac to obtain additional insured coverage for TFM. According to 

Travelers, the backdating of the agreement was significant because 

Travelers’ insurance policies state that coverage for TFM as an additional 

insured “is not triggered . . . unless there is a prior written agreement 

requiring Calvac to obtain such coverage.” (Bolding omitted.) Travelers
6

believed that because there was not a “prior written agreement,” it never had 

any duty to provide a defense to TFM in the construction defect action. 

Travelers sought to amend its complaint to reflect the theory that because it 

never had any duty to defend TFM, it was “entitled to full reimbursement of 

what it paid to defend the [construction defect] action.” (Italics added.)

The trial court granted leave to amend. In the third amended 

complaint, the equitable contribution and equitable indemnity causes of 

action remained the same as in the previous versions of the complaint. 

Specifically, Travelers sought an order, through those causes of action, that 

Navigators and Mt. Hawley be required to reimburse an equitable share of 

TFM’s defense costs that were paid by Travelers. However, to reflect its new 

theory that it never owed any duty to defend TFM, the third amended 

complaint contained an amended declaratory relief cause of action. 

The first subpart of the declaratory relief cause of action in the third 

amended complaint identified the following issues in dispute for which a 

declaration was sought:

“a. Insurer Defendants had and have a duty to defend [TFM] 

against the claims, demands, actions and causes of action 

asserted against [TFM] in the Construction Defect Action;

“b. Insurer Defendants had and have an equitable duty and 

responsibility to pay the entire costs of defense incurred on behalf 

of [TFM]; [¶] and 

“c. The fees and costs associated with the defense of [TFM] 

should be equitably apportioned between and among the Insurer 

Defendants, under applicable law and equitable principles.”

(Italics added.) 

The second subpart of the declaratory relief cause of action identified

the following issues in dispute:
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“a. [Travelers] did not have a duty to defend [TFM] against the 

claims, demands, actions and causes of action asserted against 

[TFM] in the Construction Defect Action;

“b. [Travelers] did not have an equitable duty and responsibility 

to pay any portion of the costs of defense incurred on behalf of 

[TFM]; and

“c. The fees and costs of defending [TFM] have been and are 

being borne disproportionately by [Travelers].” (Italics added.)

The third amended complaint also added a sentence to its general 

allegations to reflect Travelers’ newly developed belief that it did not owe any

duty to defend. Specifically, Travelers stated that although it had agreed, 

subject to a reservation of rights, to provide TFM with a defense, 

“[s]ubsequent facts revealed, however, that [Travelers’] belief that it owed a 

duty to defend [TFM] was erroneous and in actuality [Travelers] owed no 

such duty.” 

D. Navigators’ and Mt. Hawley’s Demurrers to the Third Amended 

Complaint

Navigators and Mt. Hawley both filed demurrers to the third amended 

complaint.

First, with respect to the declaratory relief cause of action, both 

Navigators and Mt. Hawley argued, among other things, that declaratory 

relief regarding the duty to defend was no longer a viable cause of action 

because the construction defect action had ended and Travelers was no longer 

providing a defense to TFM. According to both demurrers, any dispute over 

reimbursement was more properly addressed through Travelers’ claims for 

monetary damages.

Next, with respect to the equitable indemnity cause of action, both 

Navigators and Mt. Hawley took the position that under the governing case 

law, relief based on a theory of equitable indemnity is only available between 
8

insurance carriers when one carrier seeks reimbursement for payments made 

in a settlement or to satisfy a judgment on behalf of an insured, not payments 

made for defense costs.4

Finally, with respect to the cause of action for equitable contribution, 

Navigators and Mt. Hawley took divergent approaches. 

Navigators argued that based on Travelers’ allegation that it never 

owed a duty to provide a defense to TFM, “Travelers cannot recover under an 

equitable contribution theory because according to its own complaint, it did 

not insure the same insured ([TFM]) nor the same risk ([TFM’s] liability for 

construction defects) as the defendants.” For this argument, Navigators 

relied on the principle that “a claim for equitable contribution requires: (1) 

the insurers must share the same level of obligation; (2) on the same risk, (3) 

for the same insured.” 

Mt. Hawley, on the other hand, based its demurrer to the equitable 

contribution cause of action solely on an argument premised on the content of 

the relevant insurance policies issued by Mt. Hawley and Travelers. 

Specifically, Mt. Hawley argued that if the trial court took judicial notice of 

those policies, it would conclude that any coverage provided to TFM by Mt. 

Hawley was excess coverage, and that any coverage provided by Travelers, on 

the other hand, was primary coverage.5 Therefore, according to Mt. Hawley, 

4 Mt. Hawley also argued that the equitable indemnity cause of action 

against it failed on the merits based on the content of insurance policies that 

it requested the trial court judicially notice. Mt. Hawley’s specific arguments 

premised on the content of the insurance policies are similar to those we 

explain in more detail in connection with Mt. Hawley’s demurrer to the 

equitable contribution cause of action.

5 “Primary coverage provides immediate coverage upon the ‘occurrence’ 
9

Travelers could not obtain equitable contribution from Mt. Hawley because 

they “are not insurers co-obliged to share a common burden at the same level 

of liability for [TFM’s] defense in the [construction defect] action,” and “their 

respective policies thus do not cover the same risk.” 

Also relying on the content of the insurance policies, Mt. Hawley 

explained that, for two reasons, Travelers’ allegation regarding its recent 

discovery of the backdated subcontractor agreement between Calvac and 

TFM would not mean that Mt. Hawley was responsible, instead of Travelers, 

for the defense costs paid by Travelers on behalf of TFM. First, pointing to a 

provision of its own insurance policies, Mt. Hawley argued that if, as 

Travelers alleged, TFM failed to enter into a written agreement with Calvac 

requiring it to designate TFM as an additional insured under Calvac’s 

insurance policy with Travelers, such failure would mean that TFM breached 

of a ‘loss’ or the ‘happening’ of an ‘event’ giving rise to liability. . . . It is 

defined as ‘insurance coverage whereby, under the terms of the policy, liability 

attaches immediately upon the happening of the occurrence that gives rise to 

liability. [Citation.]’ . . . In the context of liability insurance, a primary 

insurer generally has the primary duty to defend and to indemnify the 

insured, unless otherwise excused or excluded by specific policy language. . . . 

Excess insurance provides coverage after other identified insurance is no 

longer on the risk. ‘Excess’ coverage means ‘coverage whereby, under the 

terms of the policy, liability attaches only after a predetermined amount of 

primary coverage has been exhausted.’ ” (Fireman’s Fund Ins. Co. v. 

Maryland Casualty Co. (1998) 65 Cal.App.4th 1279, 1304 (Fireman’s Fund).) 

“As a general rule, there is no contribution between a primary and an excess 

carrier. [Citations.] However, where different insurance carriers cover 

differing risks and liabilities, they may proceed against each other for 

reimbursement by subrogation rather than by contribution.” (Reliance Nat. 

Indemnity Co. v. General Star Indemnity Co. (1999) 72 Cal.App.4th 1063, 

1078.) As we will explain, because the insurance policies are not before us in 

our review of the ruling on Mt. Hawley’s demurrer, we express no view on the 

accuracy of Mt. Hawley’s representation that it provided excess coverage to 

TFM and Travelers provided primary coverage.
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a condition of coverage in Mt. Hawley’s insurance policies. Mt. Hawley would 

therefore not be legally obligated to provide any coverage to TFM, leaving no 

basis on which Travelers could recover from Mt. Hawley under a theory of 

equitable contribution. Second, Mt. Hawley argued that Travelers’ discovery 

of facts negating Travelers’ duty to defend TFM would operate to extinguish 

Travelers’ duty to defend only prospectively. Thus, Mt. Hawley’s coverage

would remain excess to Travelers’ primary coverage during the entire time 

that Travelers provided a defense to TFM, and Travelers would have no basis 

to obtain equitable contribution from Mt. Hawley.

The trial court sustained both demurrers. The trial court agreed with 

Navigators and Mt. Hawley that (1) the declaratory relief cause of action 

failed because the underlying action was concluded and because the 

declaratory relief cause of action was improperly duplicative of the other 

relief sought by Travelers; and (2) the cause of action for equitable indemnity 

failed because defense costs paid by an insurance carrier cannot be the basis 

for an equitable indemnity cause of action.6 

With respect to the equitable contribution cause of action, the trial 

court denied Mt. Hawley’s request to take judicial notice of the relevant 

insurance policies, explaining that it would be improper to take judicial 

notice of the policies because Travelers “raises issues as to the authenticity of 

6 In sustaining the demurrers to the declaratory relief cause of action, 

the trial court also found meritorious an argument that Mt. Hawley made 

with respect to the issue presented for resolution in the declaratory relief 

cause of action. The trial court stated, “Mt. Hawley also argues that 

[Travelers] seeks inappropriate relief by requesting the Court declare it did 

not have a duty to defend [TFM] in the underlying action. This argument is 

persuasive. It is well-settled law that insurers have a duty to defend 

potentially covered claims until evidence to the contrary is presented. . . . 

Moreover, an insurer’s duty to defend can only be discharged prospectively.” 
11

the policies and Mt. Hawley’s interpretation of them.” The trial court 

accordingly did not rely upon any of the arguments made by Mt. Hawley

regarding the equitable contribution cause of action. Instead, the trial court 

sustained both Mt. Hawley’s and Navigators’ demurrers to the equitable 

contribution cause of action by relying on the argument made by Navigators. 

The trial court explained, 

“ ‘Equitable contribution is the right to recover from a coobligor who shares a liability with the party seeking 

contribution.’ (North American Capacity Ins. Co. v. Claremont 

Liability Ins. Co. (2009) 177 Cal.App.4th 272, 295.) Thus, to state 

a cause of action for equitable contribution, the co-obligor must 

share the same liability and same risk as the party seeking 

reimbursement. (Fireman’s Fund Ins. Co. v. Maryland Casualty 

Co. (1998) 65 Cal.App.4th 1279, 1289.)

“Here, [Mt. Hawley and Navigators] argue that [Travelers]

failed to plead it has the same liability and risk as them because 

[Travelers] affirmatively alleges it did not have a duty to defend 

[TFM]. This argument is persuasive.

“Throughout the [third amended complaint], [Travelers] 

alleges it did not have a duty to defend [TFM] but [Mt. Hawley 

and Navigators] did under their respective insurance policies. 

Accepting those allegations as true, it follows that [Travelers] does 

not have the same liability as [Mt. Hawley and Navigators]. 

Therefore, [Travelers] cannot state a claim for equitable 

contribution.” (Italics added.)7

7 In discussing the equitable indemnity cause of action, the trial court 

reiterated that Travelers was bound by the allegation that it did not owe a 

duty to defend TFM, characterizing Travelers’ allegation as factual:

“[Travelers] is very clear that it owes no duty to [TFM] yet hints here that the 

exact opposite, that it does owe a duty, may be true. While a plaintiff can 

plead inconsistent causes of action, a plaintiff cannot ‘blow hot and cold as to 

the facts positively stated. [Citations.]’ (Manti v. Gunari (1970) 5 Cal.App.3d 

442, 449; see Steiner v. Rowley (1950) 35 Cal.2d 713, 718-719 [a plaintiff 
12

The trial court sustained the demurrers without leave to amend and 

entered judgments of dismissal in favor of Navigators and Mt. Hawley. 

Travelers appeals from the judgments. 

II.

DISCUSSION

In this appeal, Travelers challenges the trial court’s order sustaining 

the demurrers of both Mt. Hawley and Navigators with respect to the causes 

of action for equitable contribution and equitable indemnity. Travelers does 

not challenge the trial court’s order insofar as it sustained Mt. Hawley’s and 

Navigators’ demurrers to the cause of action for declaratory relief.

A. Legal Standards for Appellate Review of an Order Sustaining a 

Demurrer

We begin with the legal standards governing an appeal from an order 

sustaining a demurrer. “ ‘On appeal from an order of dismissal after an order 

sustaining a demurrer, the standard of review is de novo: we exercise 

our independent judgment about whether the complaint states a cause of 

action as a matter of law.’ ” (Villafana v. County of San Diego (2020) 57 

Cal.App.5th 1012, 1016.) In reviewing the complaint, “we must assume the 

truth of all facts properly pleaded by the plaintiffs, as well as those that are 

judicially noticeable.” (Howard Jarvis Taxpayers Assn. v. City of La 

Habra (2001) 25 Cal.4th 809, 814.) We may affirm on any basis stated in the 

demurrer, regardless of the ground on which the trial court based its ruling. 

(Carman v. Alvord (1982) 31 Cal.3d 318, 324.)

B. The Trial Court Properly Denied Mt. Hawley’s Request to Take Judicial 

Notice of the Relevant Insurance Policies

cannot plead facts that are inherently contradictory and incapable of being 

reconciled].) Travelers specifically pleads that it lacked any duty to [TFM], 

and then tries to claim that it did.” 
13

As a preliminary matter, we first consider whether, as Mt. Hawley 

argued in the trial court and continues to maintain on appeal, the trial court 

should have taken judicial notice of the relevant insurance policies and 

should have sustained the demurrer based on the content of those policies. 

“We apply the abuse of discretion standard in reviewing a trial court’s ruling 

denying a request for judicial notice (i.e., we affirm the ruling unless the 

information provided to the trial court was so persuasive that no reasonable 

judge would have denied the request for judicial notice).” (CREED-21 v. City 

of San Diego (2015) 234 Cal.App.4th 488, 520; see also Physicians Committee 

for Responsible Medicine v. Los Angeles Unified School Dist. (2019) 43 

Cal.App.5th 175, 182 [applying an abuse of discretion standard of review to 

the trial court’s ruling on a request to take judicial notice in the context of an 

order sustaining a demurrer].)

Mt. Hawley requested judicial notice pursuant to Evidence Code 

sections 451 and 452, without further specifying the relevant subdivisions of 

those code sections.8 Mt. Hawley did, however, rely on a quotation from 

8 Evidence Code section 451 lists categories of items for which “[j]udicial 

notice shall be taken.” (Italics added.) The insurance policies at issue here 

plainly do not fall within any of the categories for which mandatory judicial 

notice is required. Evidence Code section 452 lists categories of items for 

which the court may take judicial notice. These categories comprise: 

“(a) The decisional, constitutional, and statutory law of any state 

of the United States and the resolutions and private acts of the 

Congress of the United States and of the Legislature of this state.

[¶] (b) Regulations and legislative enactments issued by or under 

the authority of the United States or any public entity in the 

United States. [¶] (c) Official acts of the legislative, executive, 

and judicial departments of the United States and of any state of 

the United States. [¶] (d) Records of (1) any court of this state or 

(2) any court of record of the United States or of any state of the 

United States. [¶] (e) Rules of court of (1) any court of this state 
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Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743. Scott

stated, “Where, as here, judicial notice is requested of a legally 

operative document—like a contract—the court may take notice not only of 

the fact of the document and its recording or publication, but also facts that 

clearly derive from its legal effect,” and that “whether the fact derives from 

the legal effect of a document or from a statement within the document, the 

fact may be judicially noticed where, as here, the fact is not reasonably 

subject to dispute.” (Id. at p. 754, italics omitted.) Scott is inapposite because 

the document being judicially noticed in that case was a government

document and was accordingly governed by Evidence Code section 452, 

subdivision (c), under which judicial notice may be taken of “[o]fficial acts of 

the legislative, executive, and judicial departments of the United States and 

of any state of the United States.” (Scott, at p. 752.) Scott does not provide 

authority allowing a court to take judicial notice of a contract between private 

parties. 

In the absence of any specific reference to any statutory subdivision in 

sections 451 or 452 of the Evidence Code, we infer that Mt. Hawley may have 

intended to seek judicial notice under Evidence Code section 452, subdivision 

(h), which permits a court to take judicial notice of “[f]acts and propositions 

that are not reasonably subject to dispute and are capable of immediate and 

or (2) any court of record of the United States or of any state of 

the United States. [¶] (f) The law of an organization of nations 

and of foreign nations and public entities in foreign nations. [¶] 

(g) Facts and propositions that are of such common knowledge 

within the territorial jurisdiction of the court that they cannot 

reasonably be the subject of dispute. [¶] (h) Facts and 

propositions that are not reasonably subject to dispute and are 

capable of immediate and accurate determination by resort to 

sources of reasonably indisputable accuracy.” 
15

accurate determination by resort to sources of reasonably indisputable 

accuracy.” However, case law holds that “the existence of a contract between 

private parties cannot be established by judicial notice under Evidence Code 

section 452, subdivision (h).” (Gould v. Maryland Sound Industries, 

Inc. (1995) 31 Cal.App.4th 1137, 1145.) The existence and terms of a private 

agreement are not facts that are not reasonably subject to dispute and that 

can be determined by indisputable accuracy. For that reason, when a party 

opposes the court’s consideration of an insurance policy in the context of a 

demurrer, it is proper for the court to decline to consider the content of the 

policy. (See Pastoria v. Nationwide Ins. (2003) 112 Cal.App.4th 1490, 1495, 

fn. 4 [the court would not take judicial notice of an insurance policy when the 

authenticity of the document was disputed and plaintiffs did not agree that 

the court could consider it]; Fiorito v. Superior Court (1990) 226 Cal.App.3d 

433, 438 [the trial court erred in considering “ ‘reconstructed’ ” insurance 

policies attached to an unverified complaint when the defendants generally 

denied all the allegations of the complaint because “[a] demurrer is not the 

proper vehicle for determining the truth of disputed facts”].) Here, Travelers 

strenuously objected to the trial court’s consideration of the insurance policies 

that were the subject of Mt. Hawley’s request for judicial notice.9

9 Mt. Hawley points out that the insurance policies were accompanied by 

certification pages from representatives of Travelers or Mt. Hawley, declaring 

that the policies were true and correct copies of business records. Although 

those certifications might constitute an adequate evidentiary basis for 

authenticating the documents if they were presented to the court as part of a 

fact-based proceeding, such as a summary judgment motion, they do not 

exempt Mt. Hawley from the fundamental rule that private agreements are 

generally not proper subjects of judicial notice when the opposing party 

protests. 
16

We therefore conclude that there was no basis in Evidence Code 

sections 451 or 452 for the trial court to have taken judicial notice of the 

insurance policies identified by Mt. Hawley. As the insurance policies were

not properly before the trial court, and accordingly are not properly before us, 

we do not consider any of Mt. Hawley’s appellate arguments that depend on 

the content of those documents. 

C. The Trial Court Erred in Sustaining the Demurrers to the Equitable 

Contribution Cause of Action

We now turn to the first of the two causes of action at issue in this 

appeal: equitable contribution. Having concluded that none of Mt. Hawley’s 

arguments that depend on the content of the relevant insurance policies are 

properly before us, we focus solely on determining whether, as the trial court 

ruled, there is merit to the argument made below by Navigators in support of 

the demurrer.10

As noted, Navigators argued, and the trial court held, that the 

allegations in Travelers’ third amended complaint established that Travelers 

could not state a claim for equitable contribution. Specifically, the trial court 

focused on Travelers’ allegation that, due to the purportedly backdated 

subcontractor agreement between TFM and Calvac, Travelers never had a 

duty to provide a defense to TFM. 

The trial court’s ruling was based on the general principle that “the 

doctrine of equitable contribution applies to insurers who share the same

level of obligation on the same risk as to the same insured.” (Fireman’s Fund, 

10 With respect to the equitable contribution cause of action, although Mt. 

Hawley’s demurrer did not advance the argument made by Navigators in the 

trial court, Mt. Hawley now contends in its appellate briefing that the 

argument has merit and we should affirm the trial court’s ruling on that 

basis. 
17

supra, 65 Cal.App.4th at p. 1294, fn. 4.) More specifically, “[i]n the insurance 

context, the right to contribution arises when several insurers are obligated 

to indemnify or defend the same loss or claim, and one insurer has paid more 

than its share of the loss or defended the action without any participation by 

the others. Where multiple insurance carriers insure the same insured and 

cover the same risk, each insurer has independent standing to assert a cause 

of action against its coinsurers for equitable contribution when it has 

undertaken the defense or indemnification of the common insured. Equitable 

contribution permits reimbursement to the insurer that paid on the loss for 

the excess it paid over its proportionate share of the obligation, on the theory 

that the debt it paid was equally and concurrently owed by the other insurers 

and should be shared by them pro rata in proportion to their respective 

coverage of the risk. The purpose of this rule of equity is to accomplish 

substantial justice by equalizing the common burden shared by coinsurers, 

and to prevent one insurer from profiting at the expense of others.” (Id. at 

p. 1293.) Following these principles, trial court observed that Travelers 

would not have a valid claim for equitable contribution if it was not among 

the insurance carriers obligated to provide a defense to TFM in the 

construction defect action.

Travelers does not take issue with these fundamental principles. 

Instead, it argues that the trial court erred in relying upon the allegations of 

the third amended complaint to establish that equitable contribution was not 

available to Travelers. The trial court stated, “Throughout the [third 

amended complaint], [Travelers] alleges it did not have a duty to defend 

[TFM] but [Mt. Hawley and Navigators] did under their respective insurance 

policies. Accepting those allegations as true, it follows that [Travelers] does 
18

not have the same liability as [Mt. Hawley and Navigators]. Therefore, 

[Travelers] cannot state a claim for equitable contribution.” (Italics added.) 

Travelers argues that the trial court’s analysis was flawed for two 

reasons. First, the third amended complaint did adequately plead all the 

necessary elements of a cause of action for equitable contribution because it 

alleged Travelers paid TFM’s defense costs under a good faith belief it had a 

duty to do so. Second, although the third amended complaint pled, in the 

alternative, that Travelers never owed any duty to pay any defense costs to 

TFM and should be fully reimbursed by Mt. Hawley and Navigators, that is 

an alternative allegation regarding the legal significance of certain facts, 

which cannot serve to defeat Travelers’ properly pleaded cause of action for 

equitable contribution. As we will explain, Travelers’ position has merit.

First, the third amended complaint, on its face, set forth allegations 

that stated a cause of action for equitable contribution against Mt. Hawley 

and Navigators. In the “General Allegations” section of the third amended 

complaint, Travelers alleged, “Subject to a reservation of rights and based on 

a good faith and reasonable belief that it had a duty to do so, [Travelers] 

agreed to provide [TFM] with a defense to the Construction Defect Action 

pursuant to policies issued to [Calvac]. . . . To date, [Travelers] has incurred 

in excess of $498,000 in attorneys’ fees, costs and/or expert fees providing 

[TFM] with a defense to the Construction Defect Action.” In the equitable 

contribution section of the third amended complaint, Travelers alleged, 

“32. [Travelers] contends that, with respect to the Construction 

Defect Action, each Insurer Defendant is obligated to contribute 

to [TFM’s] defense.

“33. To date, Insurer Defendants have failed to contribute a full 

and equitable share of the costs incurred and continuing to be 

incurred in the defense of [TFM] against the Construction Defect 

Action.
19

“34. To the extent that [Travelers] paid more than its equitable 

share of any sums attributable to [TFM’s] defense against the 

Construction Defect Action, [Travelers] is entitled to recover from 

Insurer Defendants, and each of them, who paid less than their 

equitable share.” 

These allegations adequately pled a cause of action for equitable 

contribution because they alleged that “several insurers are obligated to 

indemnify or defend the same loss or claim, and one insurer has paid more 

than its share of the loss or defended the action without any participation by 

the others.” (Fireman’s Fund, supra, 65 Cal.App.4th at p. 1293.)11 

Despite the existence of these allegations stating a claim for equitable 

contribution, the trial court concluded that based on other allegations in the 

third amended complaint, which the trial court “[a]ccept[ed] . . . as true,” 

Travelers could not prevail on its claim for equitable contribution. Although 

the trial court did not specify the portions of the third amended complaint 

that it was “[a]ccepting . . . as true,” it is evident that the trial court was 

referring to two sets of allegations that Travelers added to the third amended 

complaint. First, in the “General Allegations” section, Travelers added a 

sentence stating, “Subsequent facts revealed, however, that [Travelers’] belief 

that it owed a duty to defend [TFM] was erroneous and in actuality 

[Travelers] owed no such duty.”12 (Italics added.) Second, the declaratory 

11 The allegations are substantively the same as the allegations contained 

in the first and second amended complaints. 

12 The sentence (italicized below) appears in the following context in 

paragraph 14 of the third amended complaint: “Subject to a reservation of 

rights and based on a good faith and reasonable belief that it had a duty to do 

so, [Travelers] agreed to provide [TFM] with a defense to the Construction 

Defect Action pursuant to policies issued to [Calvac]. Subsequent facts 

revealed, however, that [Travelers’] belief that it owed a duty to defend [TFM]
20

relief cause of action was substantially changed in the third amended 

complaint, in that it sought a declaration on the issue of whether Mt. Hawley 

and Navigators were obligated to pay all of TFM’s defense costs, and 

Travelers was obligated to pay none of them. Among other things, the 

declaratory relief cause of action alleged: “[Travelers] did not have a duty to 

defend [TFM] against the claims, demands, actions and causes of action 

asserted against [TFM] in the Construction Defect Action”; “[Travelers] did 

not have an equitable duty and responsibility to pay any portion of the costs of 

defense incurred on behalf of [TFM]”; and “Insurer Defendants had and have 

an equitable duty and responsibility to pay the entire costs of defense 

incurred on behalf of [TFM].” (Italics added.) The trial court reasoned that 

if, as Travelers alleged in these portions of the third amended complaint, it 

was not obligated to pay any of TFM’s defense costs due to Travelers’ 

contention that it never had a duty to defend TFM, then “[Travelers] does not 

have the same liability as [Mt. Hawley and Navigators]” and “[t]herefore, 

[Travelers] cannot state a claim for equitable contribution.” As we will 

explain, the trial court’s reasoning was flawed.

Although a court must “treat[ ] [a] demurrer as admitting all material 

facts properly pleaded,” it “does not, however, assume the truth of 

contentions, deductions or conclusions of law.” (Aubry v. Tri-City Hospital 

Dist. (1992) 2 Cal.4th 962, 967.) The trial court assumed that Travelers’ 

allegation that it owed no duty to defend TFM was a factual allegation. 

Accordingly, the trial court concluded it was obligated to accept that 

was erroneous and in actuality [Travelers] owed no such duty. To date, 

[Travelers] has incurred in excess of $498,000 in attorneys’ fees, costs and/or 

expert fees providing [TFM] with a defense to the Construction Defect 

Action.” (Italics added.) 
21

allegation as true for the purpose of ruling on the demurrers. However, the 

trial court’s approach was faulty because Travelers’ allegation that it owed no 

duty to defend TFM was a legal allegation that was to be resolved in the 

course of the litigation, not a factual allegation that should be treated as true 

for the purpose of a demurrer. (Feldman v. Illinois Union Ins. Co. (2011) 198 

Cal.App.4th 1495, 1500 (Feldman) [“whether the policy provides a potential 

for coverage and a duty to defend calls for interpretation of an insurance 

policy and thus is a question of law”].) “Whether an insurer owes an insured 

a duty to defend a third party’s lawsuit depends, in the first instance, on a 

comparison of the allegations of the third party’s complaint and the terms of 

the insured’s policy.” (Albert v. Truck Ins. Exchange (2018) 23 Cal.App.5th 

367, 377-378.) Thus, in ruling on the demurrers, the trial court should not 

have assumed the truth of Travelers’ legal allegation that it lacked a duty to 

defend TFM, as that legal issue had not yet been determined. (Cf. American 

States Ins. Co. v. National Fire Ins. Co. of Hartford (2011) 202 Cal.App.4th 

692, 703, fn. 5 [in an action in which one insurer sought to recover from 

another insurer for defense and indemnity costs paid to their mutual insured, 

the court explained that although the “[plaintiff insurance carrier’s] 

complaint alleges [the defendant insurance carrier] was primarily liable for 

the damages that occurred during [the defendant insurance carrier’s] policy 

period, . . . on demurrer a court does not accept as true contentions, 

deductions or conclusions of law”].)

Indeed, it is clear from the appellate briefing that there is an 

unresolved dispute regarding the legal effect of Travelers’ recent discovery of 

the purportedly backdated subcontractor agreement between TFM and 

Calvac. Although Travelers stated in its declaratory relief cause of action 

that it believed recently discovered facts about the purportedly backdated 
22

agreement had the legal effect of negating its duty to pay any of TFM’s 

defense costs, Mt. Hawley makes very clear that it disagrees as a matter of 

law.13 Citing Scottsdale Insurance Co. v. MV Transportation (2005) 36 

Cal.4th 643 at pages 655-657, and Amato v. Mercury Casualty Co. (1993) 18 

Cal.App.4th 1784 at pages 1790-1793, Mt. Hawley argues, “The new facts 

Travelers allegedly uncovered, years later, cannot retroactively operate to 

defeat its duty to defend. . . . [¶] California law is settled that an insurer 

must defend its insured on the premise that the allegations and extrinsic 

facts tendered to it are true, until and unless it can definitively prove 

otherwise. An insurer later acquiring facts that defeat the duty to defend 

may terminate the duty prospectively, only. . . . So Travelers did, 

indisputably, owe a duty to defend TFM at all times that it was defending. 

Any contrary assertion is contrary to law.” (Second italics added.)14

13 Navigators’ briefing does not address the issue of whether it believes 

Travelers may retroactively be determined to have had no duty to defend. 

Instead, Navigators focuses solely on the fact that Travelers has taken that 

position, arguing that for the purpose of the demurrers, Travelers should be 

held to it.

14 As the issue is not presented in this appeal, we do not comment on the 

merits of the dispute between Travelers and Mt. Hawley as to whether, under 

the applicable law, there could be a set of facts based on which Travelers 

could establish, on a retroactive basis, that it did not owe a duty to defend 

TFM. Moreover, we make no comment on whether, as the trial court 

assumed in its ruling, Travelers would be barred from pursuing an equitable 

contribution cause of action against Mt. Hawley or Navigators were it to be 

determined that even though Travelers paid $498,000 toward TFM’s defense 

costs, in hindsight Travelers never owed a duty to defend TFM. (Cf. Herrick 

Corp. v. Canadian Ins. Co. (1994) 29 Cal.App.4th 753, 762-763 [in an action 

in which one insurer sought equitable contribution from another insurer for 

the payment of defense costs, because it was unnecessary to reach the issue, 

the court stated, “[w]e express no opinion as to the effect, if any, on [the 
23

Mt. Hawley and Navigators attempt to defend the trial court’s 

approach by characterizing Travelers’ allegations as either a “judicial 

admission” (as argued by Mt. Hawley) or the pleading of “contradictory and 

antagonistic facts” (as argued by Navigators). However, neither of those 

descriptions apply here. 

First, as we have explained, Travelers’ allegation that it had no duty to 

defend TFM was not a factual allegation, but rather was an allegation as to 

what it believed to be the legal effect of its recent discovery of the purportedly 

backdated subcontractor agreement. (Feldman, supra, 198 Cal.App.4th at 

p. 1500.) Thus, there is no merit to Navigators’ contention that Travelers 

should be prevented from alleging “contradictory and antagonistic facts” as to 

whether it had a duty to defend TFM.15

plaintiff insurer’s] claim [for contribution] by its having proclaimed, after it 

had spent almost three years defending [the insured], that it had no duty to 

do so.”].)

15 We note that Navigators bases its argument on the purported principle 

that there is a “bar on inconsistent pleading . . . where . . . the facts pled are 

‘contradictory or antagonistic,’ ” for which it cites Steiner v. Rowley (1950) 35 

Cal.2d 713, 718-719. Our Supreme Court more fully discussed the rule 

regarding contradictory or antagonistic factual allegations in Faulkner v. 

California Toll Bridge Authority (1953) 40 Cal.2d 317, clarifying that the rule 

described in Steiner pertains to verified complaints. As our Supreme Court 

stated, “[A]lthough a plaintiff may plead inconsistent counts or causes of 

action in his complaint [citation] even where, as here, it be verified, if there

are no contradictory or antagonistic facts [citations], we are in accord with 

the view . . . that the rule was not ‘intended to sanction the statement in a 

verified complaint of certain facts as constituting a transaction in one count 

or cause of action, and in another count or cause of action a statement of 

contradictory or antagonistic facts as constituting the same transaction. In 

short, the rule does not permit the pleader to blow both hot and cold in the 

same complaint on the subject of facts of which he purports to speak with 

knowledge under oath.’ ” (Faulkner, at p. 328; see also Alfaro v. Community 

Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 
24

Second, the requirements for establishing a judicial admission are not 

present here. A judicial admission is “ ‘a waiver of proof of a fact by 

conceding its truth, and it has the effect of removing the matter from the 

issues.’ ” (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 

1264, 1271.) “To be considered a binding judicial admission, ‘the declaration 

or utterance must be one of fact and not a legal conclusion, contention, or 

argument.’ ” (Eisen v. Tavangarian (2019) 36 Cal.App.5th 626, 637.) “[A] 

mere conclusion, or a ‘mixed factual-legal conclusion’ in a complaint, is not 

considered a binding judicial admission.” (Castillo v. Barrera (2007) 146 

Cal.App.4th 1317, 1324.) Here, as we have explained, Travelers’ allegation 

that it did not have a duty to defend TFM is not a factual allegation. 

Accordingly, it cannot be treated as a judicial admission. Moreover, “[a] 

judicial admission is . . . conclusive both as to the admitting party and as to 

that party’s opponent. . . . Thus, if a factual allegation is treated as a judicial 

admission, then neither party may attempt to contradict it—the admitted 

fact is effectively conceded by both sides.” (Barsegian v. Kessler & 

Kessler (2013) 215 Cal.App.4th 446, 452.) Applying this principle, it is clear 

that Travelers did not make a judicial admission. As we have explained, far 

from conceding that Travelers owed no duty to defend TFM, Mt. Hawley 

1356, 1381-1382 [“A plaintiff may plead inconsistent counts or causes of 

action in a verified complaint, but this rule does not entitle a party to 

describe the same transaction as including contradictory or antagonistic 

facts,” and “[i]n such circumstances, we may accept as true the more specific 

allegations.”].) Travelers’ third amended complaint was not verified, and 

thus the rule cited by Navigators prohibiting the pleading of contradictory or 

antagonistic facts does not apply. “[M]odern rules of pleading generally 

permit plaintiffs to ‘set forth alternative theories in varied and inconsistent 

counts.’ ” (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388.)
25

takes the opposite position, contending that Travelers owed a duty to defend, 

which cannot be extinguished on a retroactive basis. 

In sum, because Travelers is not bound by its allegation that it owed no 

duty to defend TFM, the trial court erred in sustaining the demurrers to the 

equitable contribution cause of action. 

D. The Trial Court Erred in Sustaining the Demurrers to the Equitable 

Indemnity Cause of Action

Next, we consider Travelers’ contention that the trial court erred in 

sustaining the demurrers to the equitable indemnity cause of action. 

The respondents’ briefs present two arguments to support the 

contention that the equitable indemnity cause of action fails as a matter of 

law. We consider each in turn.

1. A Cause of Action for Equitable Indemnity Is Available As 

Between Insurers Even Though They Are Not Joint Tortfeasors

First, Mt. Hawley contends that the concept of equitable indemnity is 

inapplicable in an action, such as this, in which one insurer sues another 

insurer for reimbursement of amounts paid to an insured. Mt. Hawley 

argues that the doctrine has no role here because “[e]quitable indemnity is a 

tort concept, whereby several tort defendants that each breached some legal 

(not contractual) duty to the tort plaintiff may seek to shift or share their 

respective liabilities for any judgment or settlement. . . . Here, there is no 

plaintiff who asserted tort claims against both or either of Travelers and Mt. 

Hawley (and there is no judgment or settlement paid by Travelers that is to 

be equitably shifted). These two insurance companies are not joint 

tortfeasors, nor alleged to be tortfeasors at all.” In support, Mt. Hawley cites 

Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 

Cal.App.4th 1036, 1040 (Stop Loss), which stated that “[i]t is well-settled in 

California that equitable indemnity is only available among tortfeasors who 
26

are jointly and severally liable for the plaintiff’s injury.” (Italics omitted.) As 

part of the same argument, noting that an insurer’s obligation to pay defense 

costs to its insured is contractual, Mt. Hawley argues that the doctrine of 

equitable indemnity does not apply because “courts have repeatedly rejected 

attempts to extend the doctrine of equitable indemnity to defendants’ 

separate contractual duties owed to a common plaintiff.” 

However, the case law that Mt. Hawley relies upon for its argument 

arises exclusively in contexts other than disputes between insurance carriers. 

(Stop Loss, supra, 143 Cal.App.4th at pp. 1039-1040 [an insurance broker, 

sued by an insured for breach of contract and negligence, filed a crosscomplaint for equitable indemnity against a medical group that allegedly 

failed to submit accurate and timely claims information]; State Ready Mix, 

Inc. v. Moffatt & Nichol (2015) 232 Cal.App.4th 1227, 1231 [equitable 

indemnity claim by concrete supplier against civil engineer]; BFGC Architects 

Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 

848, 852 [equitable indemnity claim by architect against general contractors]; 

Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1158-1159 

[explaining the doctrine of equitable indemnity in the context of a claim made 

by a property owner against a public utility company].) Because none of the 

cited case law arises in the context of a dispute between insurance carriers, it 

is inapposite. (See Skanska USA Civil West California District Inc. v. 

National Interstate Ins. Company (S.D.Cal., Sept. 3, 2020, No. 20-CV-367-

WQH-AHG) 2020 WL 5294713, at pp. *6-*7 [rejecting the argument that 

“equitable indemnity only applies to joint tortfeasors, not to claims based on 

an insurance contract,” because the authority cited in support, including Stop 

Loss, did not “address an action between insurers” and “California courts 
27

have not foreclosed the possibility of an equitable indemnity claim in an 

action between insurers”].)16

Case law and commentators recognize that an equitable indemnity

claim may be asserted in a dispute between insurance carriers, even though 

they are not joint tortfeasors. In the context of litigation between insurers, 

“[a]lthough courts often use the terms ‘equitable contribution,’ ‘equitable 

indemnity’ and ‘equitable subrogation’ interchangeably, they are really 

separate remedies that apply in discrete situations. . . . [¶] . . . [¶] . . .

Equitable contribution is a loss-sharing procedure. It lies where several 

insurers insure the same risk at the same level (e.g., all primary insurers) 

and one pays the entire loss. That insurer may seek equitable contribution 

from the others to obtain reimbursement for a portion of what it has paid. . . . 

[¶] . . . Equitable indemnity is a loss-shifting procedure. ‘Equitable 

indemnity applies in cases in which one party pays a debt for which another 

is primarily liable and which in equity and good conscience should have been 

paid by the latter party.’ ” (Croskey et al., Cal. Practice Guide: Insurance 

Litigation (The Rutter Group 2021) ¶ 8:65.1, pp. 8-26 to 8-27, quoting United 

Services Auto. Assn. v. Alaska Ins. Co. (2001) 94 Cal.App.4th 638, 644-645.) 

A useful summary of the applicable California law was recently 

provided by a federal district court. “The case law discussing the three 

principles of contribution, indemnification and subrogation in the insurance 

context is surprisingly muddled; courts have often confused the principles, 

thereby providing a fertile supply of quotations for parties seeking to utilize 

any one of the three concepts as the need arises. As one California appellate 

16 We may cite and rely upon unpublished federal court decisions as 

persuasive authority. (Allen v. City of Sacramento (2015) 234 Cal.App.4th 41, 

64, fn. 4.)
28

court noted, ‘[i]t is hard to imagine another set of legal terms with more 

soporific effect than indemnity, subrogation, [and] contribution . . . .’ . . . 

Nevertheless, distinguishing between these three equitable theories of 

recovery is of import because, depending on the facts involved in a particular 

action, a claim brought under the wrong theory may fail as a matter of law. 

For example, ‘the right to contribution arises when several insurers are 

obligated to indemnify or defend the same loss or claim, and one insurer has 

paid more than its share of the loss or defended the action without any 

participation by the others.’ . . . On the other hand, ‘[e]quitable subrogation 

enables one insurer who has paid a debt for which another insurer is 

primarily liable to sue from the perspective of the insured under the policy on 

the argument that the second insurer has failed to pay.’ . . . ‘Equitable 

indemnification is similar to equitable subrogation in that it also enables an 

insurer that has paid an obligation which was entirely the responsibility of a 

co-insurer to place the complete burden for the loss on that other party,’ but 

‘[t]he party seeking reimbursement through indemnification . . . does so in his 

own right (as with a contribution claim).’ ” (Travelers Indemnity Company of 

Connecticut v. Hudson Insurance Company (E.D.Cal. 2020) 442 F.Supp.3d 

1259, 1268-1269 (Hudson), citations omitted.)17

17 In applying California law, federal courts have come to differing 

conclusions on the issue of whether a claim for equitable indemnity—like a 

claim for equitable contribution—is unavailable between carriers who do not 

share the same level of obligation on the same risk to the same insured. 

(Compare American Alternative Ins. Corp. v. Hudson Specialty Ins. 

Co. (C.D.Cal. 2013) 938 F.Supp.2d 908, 917-918 [an equitable indemnity

claim is not available to an excess carrier against a primary carrier] and 

Fireman’s Fund Ins. Co. v. Commerce & Industry Ins. Co. (N.D.Cal., Nov. 7, 

2000, No. C-98-1060VRW) 2000 WL 1721080, at p. *5 [same] with Hudson, 

supra, 442 F.Supp.3d at pp. 1269-1270 [excess carrier may pursue a claim for 
29

Consistent with this summary, case law holds that “an insurer may 

settle a claim against its insured without prejudice to its right to seek 

equitable indemnity from other insurers potentially liable on the same risk on 

the ground that, although the settling insurer’s policy does not provide 

coverage, there is coverage under the other policies.” (Mitchell, Silberberg & 

Knupp v. Yosemite Ins. Co. (1997) 58 Cal.App.4th 389, 394 (Mitchell, 

Silberberg & Knupp), first italics added; see also Pines of La Jolla 

Homeowners Assn. v. Industrial Indemnity (1992) 5 Cal.App.4th 714, 725-726 

[“an insurer who has potential liability in the underlying lawsuit is entitled 

to settle any claim alleged against it without prejudice to its right to seek 

equitable subrogation or indemnity from other insurers alleged to have full or 

partial liability for the underlying claim,” (italics added)]; Mt. Hawley Ins. Co. 

v. Golden Eagle Ins. Corp. (C.D.Cal. 2009) 645 F.Supp.2d 878, 886 [citing 

Mitchell, Silberberg & Knupp in explaining the availability of equitable 

indemnity as a cause of action between insurance carriers].)

Based on the above, we reject Mt. Hawley’s contention that equitable 

indemnity is limited to joint tortfeasors and therefore cannot be an 

appropriate cause of action between insurance carriers when one carrier 

seeks reimbursement of the amounts it has paid to an insured. 

equitable indemnity against a primary carrier]; Continental Casualty Co. v. 

St. Paul Surplus Lines Ins. Co. (E.D.Cal., Sept. 17, 2014, No. 2:07-CV-01744-

TLN-EFB) 2014 WL 4661087, at p. *18 [same]; and Lexington Ins. Co. v. 

Sentry Select Ins. Co. (E.D.Cal., June 5, 2009, No. CV F 08-1539LJO GSA) 

2009 WL 1586938, at p. *19 [same].) We are unaware of any California 

authority directly on point, and the parties have pointed to none. Although it 

could eventually become necessary in this action for the trial court to address 

that issue, it is not presently presented, and we therefore do not express any 

view on the matter. 
30

2. A Cause of Action for Equitable Indemnity May Be Based on the 

Payment of Defense Costs to an Insured

Respondents’ second argument, advanced by both Mt. Hawley and 

Navigators, is also the ground that the trial court gave for sustaining the

demurrers to the equitable indemnity cause of action. Specifically, as 

Navigators expresses the argument, Travelers fails to state a claim for 

equitable indemnity because “a cause of action for equitable indemnity does 

not accrue until the indemnitee suffers loss through payment of an adverse 

judgment or settlement.” (Italics added.) For their argument, the parties rely 

on our Supreme Court’s statement that “ ‘a fundamental prerequisite to an 

action for partial or total equitable indemnity is an actual monetary loss 

through payment of a judgment or settlement’ ” (Western Steamship Lines, 

Inc. v. San Pedro Peninsula Hospital (1994) 8 Cal.4th 100, 110, italics added), 

as well as other cases illustrating that principle. Based on this case law, Mt. 

Hawley sums up the argument: “No case has extended the doctrine to 

defense costs . . . that an insurance company paid on behalf of a defendant in 

an underlying lawsuit.” (Italics added.) 

We reject the argument because none of the case law cited by Mt. 

Hawley or Navigators arose in the context of an equitable indemnification 

claim made by one insurance carrier against another. There is no reason,

outside of the context of insurance coverage litigation between general 

liability carriers, for a judicial opinion to mention the payment of defense 

costs when describing the types of payments that can give rise to a claim for 

equitable indemnity. We therefore assign no significance to the fact that 

none of the cases cited by Navigators and Mt. Hawley state that a claim for 

equitable indemnity may be based on an insurance carrier’s payment of 

defense costs that it believes another insurance carrier should have paid.
31

Equitable indemnification is available to an insurer who “ ‘has paid an 

obligation which was entirely the responsibility of a co-insurer.’ ” (Hudson, 

supra, 442 F.Supp.3d at p. 1269, italics added.) The duty to pay defense costs 

is reasonably classified as the “obligation” of an insurance carrier under a 

general liability policy, just like the duty to indemnify the insured for the cost 

of a settlement or a judgment. (Buss v. Superior Court (1997) 16 Cal.4th 35, 

45-46 [discussing a general liability insurer’s duty to defend and duty to 

indemnify the insured].) If a claim for equitable indemnity can be based on a 

carrier’s obligation to pay a settlement on behalf of an insured (Mitchell, 

Silberberg & Knupp, supra, 58 Cal.App.4th at p. 394), we perceive no reason 

why paying defense costs would not also be sufficient to give rise to a claim 

for equitable indemnity, as long as the carrier believes that another carrier 

should have been the party to make those payments. 

Following this principle, Travelers’ third amended complaint properly 

states a cause of action for equitable indemnity because it alleges that 

“Insurer Defendants . . . are primarily and/or exclusively liable for the 

defense costs of [TFM], and thus in equity are required to reimburse 

[Travelers] for their equitable share of said defense costs.” 

E. Conclusion

In sum, we conclude that the trial court erred in sustaining Mt. 

Hawley’s and Navigators’ demurrers to the causes of action for equitable 

contribution and equitable indemnity.18 Because we reverse the order 

18 As another argument in support of the trial court’s order sustaining its 

demurrer, Navigators contends that the equities do not support the relief 

sought in Travelers’ third amended complaint because “Navigators should 

not have to pay Travelers for [TFM’s] wrongdoing. Equitable principles 

require, in the instant case, that relief be sought from the party that engaged 

in the alleged fraud, which is [TFM].” We do not reach this issue, which 
32

sustaining the demurrers, we need not, and do not, consider Travelers’

alternative argument that the trial court should be ordered to grant 

Travelers leave to amend to assert a cause of action for equitable 

subrogation.

depends on the development of facts beyond those pled in the third amended 

complaint.
33

DISPOSITION

The judgment in favor of Mt. Hawley and Navigators is reversed, and 

the matter is remanded for proceedings consistent with this opinion. 

IRION, J.

I CONCUR:

HUFFMAN, Acting P. J.

I CONCUR IN THE RESULT:

O'ROURKE, J.
1

Filed 10/15/21

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

THE TRAVELERS INDEMNITY 

COMPANY OF CONNECTICUT,

Plaintiff and Appellant,

v.

NAVIGATORS SPECIALTY 

INSURANCE COMPANY et al.,

Defendants and Respondents.

 D078852

 (Super. Ct. No. CV275515)

ORDER CERTIFYING 

OPINION FOR PUBLICATION

THE COURT:

The opinion in this case filed September 22, 2021 was not certified for 

publication. It appearing the opinion meets the standards for publication 

specified in California Rules of Court, rule 8.1105(c), the request pursuant to 

rule 8.1120(a) for publication is GRANTED.

IT IS HEREBY CERTIFIED that the opinion meets the standards for 

publication specified in California Rules of Court, rule 8.1105(c); and 
2

ORDERED that the words “Not to Be Published in the Official Reports” 

appearing on page one of said opinion be deleted and the opinion herein be 

published in the Official Reports.

HUFFMAN, Acting P. J.

Copies to: All parties