Filed 9/20/21 (see concurring opinion)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

NEDE MGMT., INC., et al.,

Plaintiffs and Appellants,

v.

ASPEN AMERICAN INSURANCE

COMPANY et al.,

Defendants and Respondents.

 B307470

 (Los Angeles County

 Super. Ct. No. 19STCV05442)

APPEAL from a judgment of the Superior Court of 

Los Angeles County. Patricia D. Nieto, Judge. Affirmed as 

modified.

Action Legal Team, Michael N. Sofris; Stillman & 

Associates and Philip H. Stillman for Plaintiffs and Appellants.

BHC Law Group, David Borovsky; Greines, Martin, Stein 

& Richland, Robert A. Olson and Eleanor S. Ruth for Defendants 

and Respondents.

_______________________
2

The Darwish family1 controlled a property in Los Angeles 

where a fire occurred, killing one person and injuring others. 

The victims sued. The Darwish family’s insurer Aspen American 

Insurance Co. (Aspen) and managing underwriter Deans & 

Homer (D&H) defended the action, which ultimately settled

without any out-of-pocket payment from the Darwish family. 

They nevertheless sued Aspen and D&H in this action, alleging a 

single claim for declaratory relief. They sought a declaration that 

a conflict of interest existed in the underlying case between them 

and Aspen and D&H, so they were entitled to so-called “Cumis” 

counsel2 pursuant to Civil Code section 2860 (section 2860). 

The trial court sustained a demurrer without leave to 

amend and entered judgment for Aspen and D&H, holding no 

conflict existed as a matter of law, so the Darwish family failed to 

state a claim for declaratory relief. We conclude the demurrer 

was the incorrect procedural vehicle to resolve the Darwish 

family’s declaratory judgment claim against Aspen and D&H. 

However, the Darwish family suffered no prejudice because the 

second amended complaint (SAC) did not allege a conflict of 

interest entitling them to independent counsel pursuant to 

section 2860 as a matter of law. We will therefore modify the 

judgment to declare the rights adverse to the Darwish family and 

affirm. 

1 We use the shorthand “Darwish family” to refer to plaintiffs 

Eden, David, and Barbara Darwish, and Eden’s company Nede 

Mgmt., Inc. (Nede). We use their first names where necessary for 

clarity.

2 San Diego Fed. Credit Union v. Cumis Ins. Society (1984) 

162 Cal.App.3d 358, 375 (Cumis).
3

The trial court also granted a motion to strike D&H as a 

defendant. That ruling is moot, so we need not address it.

BACKGROUND

We take the facts from the operative SAC, which we 

assume are true. (Centex Homes v. St. Paul Fire & Marine Ins. 

Co. (2015) 237 Cal.App.4th 23, 26 (Centex Homes I).) We also 

assume the numerous attachments to the complaint are true, and 

they take precedence over any conflicting allegations in the SAC. 

(Brakke v. Economic Concepts, Inc. (2013) 213 Cal.App.4th 761, 

767.)

Allegations

On July 4, 2015, a fire occurred on a property covered by 

the insurance policy at issue. A squatter died. Two tenants, two 

surviving squatters, and the estate of the deceased squatter sued 

the Darwish family and their corporate entities, including Nede.

The lawsuit alleged claims for wrongful death, negligence, 

premises liability, and conversion (the Hall action). 

David and Barbara tendered their defense in the Hall 

action to D&H and Aspen. D&H assumed control of the action 

and hired attorney Gary Fields as counsel for the Darwish family. 

Fields’ representation was subject to two reservations of rights: 

Aspen would not pay any judgment exceeding the $1 million 

policy limit and would not pay punitive damages. 

The Darwish family alleged Fields “failed and refused to 

properly defend” them, outlining specific examples of his faulty 

representation. They believed his poor representation of them 

created a conflict of interest between them and Aspen that 

required Aspen to provide them independent counsel pursuant to 

section 2860. Specifically, they alleged a conflict of interest arose 

from Fields’ coverage and settlement decisions adverse to them; 
4

the manner in which Fields defended the action; and Fields’ 

failure to defend against punitive damages. This alleged conflict 

was reflected in Fields’ failure to communicate an initial 

settlement demand within policy limits and failure to fully 

investigate the case. 

Aspen and D&H denied the request for independent 

counsel for David and Barbara. In their view, the reservation of 

rights limited to damages exceeding policy limits and punitive 

damages did not create a conflict of interest that triggered a right 

to independent counsel. 

Aspen did, however, approve independent counsel for Nede 

for a time. Nede was not a named insured, so the approval was 

subject to a reservation of rights that Nede was deemed an 

insured under the policy in its role as the building’s property 

manager. Aspen also denied any obligation to pay damages 

arising from any act or omission by Nede in any capacity other 

than as property manager. 

Nede retained separate counsel. According to the SAC, 

Aspen’s counsel interfered with that independent representation 

in various ways. Nonetheless, Aspen paid Nede’s counsel’s 

invoices, subject to reductions. A little less than a year after 

approval, Aspen terminated approval for Nede’s separate counsel 

because it had revoked its reservation of rights. 

The Hall action eventually settled. Although not expressly 

alleged in the SAC, there appears to be no dispute the Darwish 

family paid nothing out of pocket for the settlement. 

Procedural History

The Darwish family sued Aspen and D&H, alleging a single 

claim for declaratory relief seeking a declaration of their rights 

pursuant to section 2860. In the operative SAC, they alleged an 
5

actual conflict of interest existed between them and insurerappointed counsel, so they sought a declaration they were 

entitled to independent counsel at Aspen’s expense for the 

periods prior to December 2017 and after September 10, 2018. 

Aspen and D&H demurred to the SAC. The trial court 

sustained the demurrer without leave to amend. The court 

viewed the declaratory relief claim as “wholly derivative” of an 

unpled substantive claim under section 2860. The substantive 

claim failed because Aspen’s reservations of rights for punitive 

damages and for claims in excess of policy limits did not trigger 

the right to independent counsel under section 2860. The court

also held the allegations that insurer-appointed counsel 

improperly litigated the Hall action did not create the type of 

conflict of interest triggering section 2860. 

As for Nede, Aspen was entitled to withdraw its reservation 

of rights, and nothing alleged in the SAC entitled Nede to 

independent counsel after that time. 

The court also held any fee dispute had to be resolved in 

arbitration per section 2860, subdivision (c). 

D&H had also filed a motion to strike D&H as a defendant. 

After the court sustained the demurrer, it noted the motion to 

strike was moot but granted it anyway. It held the SAC did not 

sufficiently allege D&H was an insurer, and section 2860 on its 

face applies only to insurers. 

DISCUSSION

I. Standard of Review

We independently review the sustaining of a demurrer. 

(Centex Homes I, supra, 237 Cal.App.4th at p. 28.) We assume 

the truth of properly pleaded facts, and we give the complaint a 

reasonable interpretation, reading it as a whole. (Ibid.) We 
6

review the denial of leave to amend for abuse of discretion, 

asking whether there is “a reasonable possibility that the 

complaint can be cured by amendment.” (Ibid.)

II. The Demurrer Was Improperly Sustained But the 

Darwish Family Suffered No Prejudice

Before turning to section 2860, we address the Darwish 

family’s argument that the trial court’s order must be reversed 

because the SAC sufficiently alleged a controversy subject to 

declaratory relief, “regardless of whether the plaintiff is entitled 

to the requested relief.” Citing Ball v. FleetBoston Financial 

Corp. (2008) 164 Cal.App.4th 794 (Ball), the trial court disagreed, 

viewing the declaratory relief claim as “wholly derivative” of a 

substantive claim under section 2860, and “if the underlying 

substantive claim fails, the demurrer may properly be sustained.” 

As we explain, the trial court’s reasoning sustaining the 

demurrer was incorrect, but the error was not prejudicial because 

Aspen and D&H were entitled to judgment as a matter of law. 

(See Robertson v. Saadat (2020) 48 Cal.App.5th 630, 639 [“We are 

not bound by the trial court’s reasoning and may affirm the 

judgment if correct on any theory.”].) The proper course is to 

modify the judgment to reflect a declaration adverse to the 

Darwish family and affirm. 

“ ‘ “ ‘The fundamental basis of declaratory relief is the 

existence of an actual, present controversy over a proper 

subject.’ ” [Citations.] The language of Code of Civil Procedure 

section 1060 appears to allow for an extremely broad scope of an 

action for declaratory relief: “Any person interested under a 

written instrument . . . or under a contract, or who desires a 

declaration of his or her rights or duties with respect to another, 

or in respect to, in, over or upon property . . . may, in cases of 
7

actual controversy relating to the legal rights and duties of the 

respective parties, bring an original action . . . for a declaration of 

his or her rights and duties in the premises, including a 

determination of any question of construction or validity arising 

under the instrument or contract.” ’ ” (Linda Vista Village San 

Diego Homeowners Assn., Inc. v. Tecolote Investors, LLC (2015) 

234 Cal.App.4th 166, 181.) 

The Darwish family relies on a line of cases holding that 

“ ‘[a] general demurrer is usually not an appropriate method for 

testing the merits of a declaratory relief action, because the 

plaintiff is entitled to a declaration of rights even if it is adverse 

to the plaintiff’s interest.’ ” (Qualified Patients Assn. v. City of 

Anaheim (2010) 187 Cal.App.4th 734, 751; see Lockheed Martin 

Corp. v. Continental Ins. Co. (2005) 134 Cal.App.4th 187, 221 

(Lockheed), disapproved on another ground by State of California 

v. Allstate Ins. Co. (2009) 45 Cal.4th 1008, 1036, fn. 11; Ludgate 

Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 

606.) 

This rule dates back at least to Maguire v. Hibernia 

Savings & Loan Soc. (1944) 23 Cal.2d 719 (Maguire), which held, 

“Section 1060 of the Code of Civil Procedure provides that a party 

may bring an action for ‘a declaration of his rights and duties in 

the premises’ and that the ‘declaration may be either affirmative 

or negative in form and effect.’ It contains no suggestion that the 

pleader must allege facts entitling him to a favorable 

declaration.” (Id. at p. 730; accord, Bennett v. Hibernia Bank 

(1956) 47 Cal.2d 540, 549–550 [“It is the general rule that in an 

action for declaratory relief the complaint is sufficient if it sets 

forth facts showing the existence of an actual controversy relating 

to the legal rights and duties of the respective parties under a 
8

contract and requests that the rights and duties be adjudged. 

(Code Civ. Proc., § 1060.) If these requirements are met, the 

court must declare the rights of the parties whether or not the 

facts alleged establish that the plaintiff is entitled to a favorable 

declaration.”]; Columbia Pictures Corp. v. DeToth (1945) 26 

Cal.2d 753, 760.)

Courts have recognized this rule can often lead to a waste 

of court and litigant resources when it is clear the plaintiff seeks 

a declaration of rights to which he or she is not legally entitled. 

It would seem unnecessary to reverse a judgment sustaining a 

demurrer simply because an “actual controversy” has been 

alleged. (Lockheed, supra, 134 Cal.App.4th at pp. 221–222 [“If 

the appellate court’s decision on the merits would necessarily 

result in a declaration unfavorable to the plaintiff, reversal would 

be an idle act.”].) Although the sustaining of the demurrer might 

be technically incorrect, reversing “would merely provoke further 

appellate recourse since the record discloses that the trial court 

dismissed the case on the merits and the legal issues are clearly 

presented by the pleadings.” (Zeitlin v. Arnebergh (1963) 59 

Cal.2d 901, 908; see Salsbery v. Ritter (1957) 48 Cal.2d 1, 7 [“Our 

decision that controversies are shown to exist, however, does not 

resolve them, and we must therefore pass upon the questions of 

law that must be decided to reach a final determination of the 

case.”].) 

Hence, “where a complaint sets forth a good cause of action 

for declaratory relief regarding only a disputed question of law, 

declarations on the merits unfavorable to a plaintiff have been 

upheld although such determinations were made in the form of a 

judgment sustaining a demurrer.” (Jefferson Incorporated v. City 

of Torrance (1968) 266 Cal.App.2d 300, 303.) “ ‘[W]hile Code of 
9

Civil Procedure section 1060 entitles a plaintiff suing pursuant to 

its provisions to a declaration of rights and duties even if the 

eventual declaration may be adverse [citations], error of the trial 

court in refusing to entertain the action is nevertheless not 

prejudicial if it is clear from the face of the complaint that the 

plaintiff’s position is untenable and that a declaration adverse to 

the plaintiff will end the matter.’ ” (Jones v. Daly (1981) 122 

Cal.App.3d 500, 511.) 

In this circumstance, courts treat the appellate opinion as 

“in effect a declaratory judgment. [Citation.] The proper 

procedure is to modify the judgment to make that declaration and 

affirm the judgment as modified.” (Lockheed, supra, 134 

Cal.App.4th at p. 222; see Essick v. City of Los Angeles (1950) 34 

Cal.2d 614, 624; Farmers Ins. Exchange v. Zerin (1997) 53 

Cal.App.4th 445, 460–461 [“Strictly speaking, a demurrer is not 

an appropriate weapon to attack a claim for declaratory relief 

inasmuch as the plaintiff is entitled to a declaration of its rights, 

even if adverse. [Citation.] However, because no benefit would 

be served by reversal and remand to the trial court for entry of a 

judgment declaring that Farmers has no right to recovery from 

defendant, this opinion shall serve as a declaration of rights and 

duties.”].)

The trial court and Aspen and D&H rely on Ball to support 

dismissal, which did not acknowledge the Maguire line of 

authority. In that case, the Court of Appeal affirmed the denial 

of a motion for leave to amend a complaint because the plaintiff 

failed to adequately allege a substantive statutory violation. 

(Ball, supra, 164 Cal.App.4th at p. 798.) The court held a 

declaratory relief claim based on the same statutory claim could 

not be adequately alleged because it was “wholly derivative” of 
10

the statutory claim. (Id. at p. 800.) For support, the court cited 

only Ochs v. PacifiCare of California (2004) 115 Cal.App.4th 782, 

794 (Ochs). That case did not discuss the Maguire line of cases, 

either. In two sentences with no citation of authority, Ochs

simply affirmed the sustaining of a demurrer to declaratory and 

injunctive relief claims because they were “wholly derivative” of 

other claims for statutory violations the court had found lacking. 

(Ibid.)

We need not follow Ball or Ochs, which did not involve a 

stand-alone declaratory relief claim as in this case. Instead, we 

will apply the rule in Maguire. Here, the Darwish family 

adequately alleged an “actual controversy” under the declaratory 

relief statute, so the trial court technically should have overruled 

the demurrer. But we agree with those cases that treat the error 

as non-prejudicial because the SAC fails to allege the kind of 

conflict of interest that would have entitled the Darwish family to 

independent counsel pursuant to section 2860. This is a question

of law precluding a declaration in their favor, so we will modify 

the judgment to reflect a declaration adverse to their claim.3

“ ‘Generally, an insurer owing a duty to defend an insured, 

arising because there exists a potential for liability under the 

policy, “has the right to control defense and settlement of the 

third party action against its insured, and is . . . a direct 

participant in the litigation.” [Citations.] The insurer typically 

hires defense counsel who represents the interests of both the 

3 Because we conclude the Darwish family is not entitled to 

independent counsel as a matter of law, we need not address 

Aspen and D&H’s alternate argument that the declaratory relief 

claim addresses only past wrongs.
11

insurer and the insured.’ ” (Centex Homes v. St. Paul Fire & 

Marine Ins. Co. (2018) 19 Cal.App.5th 789, 797 (Centex Homes 

II).)

Pursuant to section 2860, however, “[i]f the provisions of a 

policy of insurance impose a duty to defend upon an insurer and a 

conflict of interest arises which creates a duty on the part of the 

insurer to provide independent counsel to the insured, the 

insurer shall provide independent counsel to represent the 

insured unless, at the time the insured is informed that a 

possible conflict may arise or does exist, the insured expressly 

waives, in writing, the right to independent counsel.” (§ 2860, 

subd. (a).) “For purposes of this section, a conflict of interest does 

not exist as to allegations or facts in the litigation for which the 

insurer denies coverage; however, when an insurer reserves its 

rights on a given issue and the outcome of that coverage issue can 

be controlled by counsel first retained by the insurer for the 

defense of the claim, a conflict of interest may exist.” (Id., subd. 

(b).)

Often called Cumis counsel, section 2860 creates a right for 

an insured to obtain independent counsel at the insurer’s expense 

whenever their competing interests create an ethical conflict for 

the insurer-appointed counsel. (Centex Homes I, supra, 237 

Cal.App.4th at p. 30.) Section 2860, subdivision (b) and case law 

make clear that “ ‘not every reservation of rights entitles an 

insured to select Cumis counsel.’ [Citation.] Whether 

independent counsel is required ‘depends upon the nature of the 

coverage issue, as it relates to the issues in the underlying case.’ 

[Citation.] ‘There must . . . be evidence that “the outcome of [the] 

coverage issue can be controlled by counsel first retained by the 

insurer for the defense of the [underlying] claim.” ’ [Citation.] ‘ 
12

“It is only when the basis for the reservation of rights is such as 

to cause assertion of factual or legal theories which undermine or 

are contrary to the positions to be asserted in the liability case 

that a conflict of interest sufficient to require independent 

counsel, to be chosen by the insured, will arise.” ’ [Citation.]

“California law is settled that ‘there is no entitlement to 

independent counsel where the coverage issue is “ ‘independent 

of, or extrinsic to, the issues in the underlying action [citations].’ ” 

[Citation.] Stated otherwise, “where the reservation of rights is 

based on coverage disputes which have nothing to do with the 

issues being litigated in the underlying action, there is no conflict 

of interest requiring independent counsel.” ’ [Citation.]

“ ‘A mere possibility of an unspecified conflict does not 

required independent counsel. The conflict must be significant, 

not merely theoretical, actual, not merely potential.’ [Citation.] 

A case by case analysis is required: ‘The potential for conflict 

requires a careful analysis of the parties’ respective interests to 

determine whether they can be reconciled (such as by a defense 

based on total nonliability) or whether an actual conflict of 

interest precludes insurer-appointed defense counsel from 

presenting a quality defense for the insured.’ ” (Centex Homes II, 

supra, 19 Cal.App.5th at pp. 797–798.)

Aspen’s reservation of rights for punitive damages and 

damages beyond policy limits did not create a conflict of interest 

triggering section 2860. “ ‘[T]he mere fact the insurer disputes 

coverage does not entitle the insured to Cumis counsel; nor does 

the fact the complaint seeks punitive damages or damages in 

excess of policy limits. ( . . . § 2860, subd. (b); [citations].) The 

insurer owes no duty to provide independent counsel in these 

situations because the Cumis rule is not based on insurance law 
13

but on the ethical duty of an attorney to avoid representing 

conflicting interests.’ ” (James 3 Corp. v. Truck Ins. Exchange 

(2001) 91 Cal.App.4th 1093, 1101 (James 3); see Golden Eagle 

Ins. Co. v. Foremost Ins. Co. (1993) 20 Cal.App.4th 1372, 1394 

(Golden Eagle).)

That leaves the Darwish family’s allegations that Fields 

“failed and refused to properly defend” them in various ways in 

the Hall action. They misunderstand the nature of the right to 

independent counsel under section 2860. The conflicts of interest 

contemplated by section 2860 do not include an insured’s mere 

dissatisfaction with the performance of insurer-appointed 

counsel. That is because “an insurer has the right to control the 

defense it provides to its insured provided there is no conflict of 

interest.” (James 3, supra, 91 Cal.App.4th at pp. 1105–1106.) 

The right to control the defense would be gutted if the insured 

could create a conflict of interest merely by complaining about 

how insurer-appointed counsel is handling the case.

Cumis and section 2860 are concerned with an attorney’s 

dual representation of the insurer and insured when their

interests conflict. “ ‘In the usual tripartite relationship existing 

between insurer, insured and counsel, there is a single, common 

interest shared among them. Dual representation by counsel is 

beneficial since the shared goal of minimizing or eliminating 

liability to a third party is the same.’ ” (Gafcon, Inc. v. Ponsor & 

Associates (2002) 98 Cal.App.4th 1388, 1419–1420 (Gafcon).) 

However, “an attorney having such dual agency status is subject 

to the rule that a ‘ “[c]onflict of interest between jointly 

represented clients occurs whenever their common lawyer’s 

representation of the one is rendered less effective by reason of 

his representation of the other.” ’ ” (Id. at p. 1420.)
14

Hence, the Cumis rule and section 2860 spring from “the 

ethical duty of an attorney to avoid representing conflicting 

interests. As the court stated in the Cumis opinion: ‘We conclude 

the Canons of Ethics impose upon lawyers hired by the insurer 

an obligation to explain to the insured and the insurer the full 

implications of joint representation in situations where the 

insurer has reserved its rights to deny coverage. If the insured 

does not give an informed consent to continued representation,

counsel must cease to represent both. Moreover, in the absence 

of such consent, where there are divergent interests of the 

insured and the insurer brought about by the insurer’s 

reservation of rights based on possible noncoverage under the 

insurance policy, the insurer must pay the reasonable cost for 

hiring independent counsel by the insured. . . . Disregarding the 

common interests of both insured and insurer in finding total 

nonliability in the third party action, the remaining interests of 

the two diverge to such an extent as to create an actual, ethical 

conflict of interest warranting payment for the insureds’ 

independent counsel.’ [Citation.] This holding was based on a 

long line of attorney-client conflict of interest cases as well as the 

American Bar Association Code of Professional Responsibility. 

[Citations.]” (Golden Eagle, supra, 20 Cal.App.4th at pp. 1394–

1395.)

The Darwish family has not alleged that Fields was thrust 

into any ethical conflict of interest in his representation of them 

and Aspen and D&H. They alleged no dispute over coverage. 

Aspen and D&H did not reserve any rights related to coverage 

beyond an excess-limits damage award and punitive damages, 

which did not create an ethical conflict for Fields. The Darwish 

family points to nothing suggesting their interests diverged from 
15

Aspen’s and D&H’s interests, forcing Fields to represent one to 

the detriment of the other. All parties were aligned in defending 

the Hall action to minimize or avoid liability. In other words, 

Fields “had no incentive to attach liability to appellant.” 

(Blanchard v. State Farm Fire & Casualty Co. (1991) 2 

Cal.App.4th 345, 350.) Fields’ handling of the case—and the 

Darwish family’s dissatisfaction with it—is beside the point, 

unless perhaps his poor performance shows he was serving Aspen

and D&H’s separate and conflicting interests to their detriment. 

But the SAC contains no allegations that any such conflict 

existed that might have encouraged Fields to perform poorly in 

order to serve Aspen’s rights over the Darwish family’s rights. 

True, the circumstances giving rise to a conflict of interest 

are not limited to section 2860. (Gafcon, supra, 98 Cal.App.4th at 

p. 1421.) The Darwish family invokes the situation “where an 

attorney who represents the interests of both the insurer and the 

insured finds that his or her ‘representation of the one is 

rendered less effective by reason of his [or her] representation of 

the other.’ ” (James 3, supra, 91 Cal.App.4th at p. 1101.) They 

point to three examples. 

First, they cite the “unremitting hostility” of D&H and 

Fields toward the Darwish family, exemplified by the belief that 

the Darwish family would be bad witnesses who could not be 

believed. This is not a conflict of interest. It is part of an 

attorney’s honest assessment about the merits of a case. It 

serves both the insurer and the insured. For the insurer, it can 

inform the decision whether to litigate or settle. For the insured, 

it might avoid a much higher damages award if a jury dislikes 

the insured’s testimony or finds them not credible. By assessing 

how a jury might react to testimony from the Darwish family, 
16

Fields was serving his clients’ aligned interests in avoiding 

liability.

Next, the Darwish family cites the rejection of a policy-limit 

settlement demand at the start of the Hall action without 

consulting them. They focus on the fact that they might have 

been exposed to damages exceeding policy limits or punitive 

damages. But Aspen and D&H were simply exercising the right 

to control the defense. The policy gave Aspen and D&H 

discretion to investigate and settle claims as they “decide is 

appropriate.” “ ‘Under a policy provision giving an insurance 

company discretion to settle as it sees fit, the insurer is “entitled 

to control settlement negotiations without interference from the 

insured.” ’ ” (Hurvitz v. St. Paul Fire & Marine Ins. Co. (2003) 

109 Cal.App.4th 918, 931.)

According to a letter attached to the complaint, Fields told 

Barbara and David he believed the policy limits demand was 

“clearly premature.” In responding to the demand, Fields 

chronicled in detail all of the outstanding issues. We need not 

list them here. Suffice it to say, they were all aimed at defending 

the Darwish family and Aspen and D&H equally. 

Finally, the Darwish family alleges insurer-appointed 

counsel advised Nede’s Cumis counsel during later settlement 

discussions that the Darwish family needed independent counsel 

because the latest settlement demand exceeded policy limits. 

This guidance was sound. Aspen and D&H could not settle the 

case beyond the policy limits without permission from the 

Darwish family or providing them independent counsel if the 

Darwish family was expected to pay for the excess amount. One 

of the circumstances requiring independent counsel is “where the 

insurer pursues settlement in excess of policy limits without the 
17

insured’s consent and leaving the insured exposed to claims by 

third parties.” (James 3, supra, 91 Cal.App.4th at p. 1101; see 

Golden Eagle, supra, 20 Cal.App.4th at p. 1396 [“clear conflict of 

interest” existed when insureds refused to consent to settlement 

exceeding policy limits].) The SAC does not allege Aspen pursued 

a settlement beyond policy limits or even considered accepting 

this latest demand. At best, there was a “ ‘mere possibility of an 

unspecified conflict,’ ” which does not require independent 

counsel. (Centex Homes II, supra, 19 Cal.App.5th at p. 798.)

The SAC has alleged no divergence between the Darwish 

family’s interests and Aspen and D&H’s interests in the Hall 

action. The Darwish family may not have liked or agreed with 

Fields’ litigation decisions, but they have alleged no circumstance 

that prevented Fields from serving both their interests and 

Aspen’s interests. Absent some coverage dispute or reservation 

of rights that created a risk that Fields will serve Aspen’s 

interest to their detriment, independent counsel was not 

warranted.

III. The Trial Court Properly Denied Leave to Amend

As we have explained, sustaining the demurrer was the 

incorrect procedure to dispose of the SAC. Because the Darwish 

family is subject to an adverse judgment on the merits, rather 

than simply dismissal, it is questionable whether they have the 

right to amend. In any case, they did not address the trial court’s 

denial of leave to amend in their briefs on appeal. They have 

failed to show the trial court abused its discretion in denying 

leave to amend. (Centex Homes I, supra, 237 Cal.App.4th at 

p. 32.)
18

IV. The Motion to Strike D&H Is Moot

The Darwish family challenges the trial court’s grant of 

D&H’s motion to strike it from the SAC. Because we modify the 

judgment in Aspen and D&H’s favor, that ruling is moot. 

We need not address it. 

DISPOSITION

The judgment is modified to declare (1) no conflict of 

interest existed entitling the Darwish family to independent 

counsel pursuant to section 2860 in the Hall action prior to 

December 2017 and after September 10, 2018; and (2) Aspen and 

D&H had no obligation to pay the Darwish family’s reasonable 

attorney’s fees incurred in the Hall action during that time. 

The judgment is affirmed as modified. Aspen and D&H are 

entitled to costs on appeal. 

OHTA, J. *

I Concur:

STRATTON, Acting P. J. 

* Judge of the Los Angeles Superior Court, assigned by the 

Chief Justice pursuant to article VI, section 6 of the California 

Constitution.
1

WILEY, J., Concurring in the result.

I write to attack the notion there is something improper 

about resolving a suit for declaratory judgment on demurrer. 

There is not. So long as the parties agree the declaratory 

judgment complaint serviceably states the facts, a demurrer is 

the speedy and efficient way to resolve an “actual controversy.” 

(Code Civ. Proc., § 1060.) Appellate courts should praise, not 

disparage, this procedure.

If the declaratory judgment complaint alleges facts the 

defendant thinks are incorrect or incomplete, then a demurrer is 

not the right way to go, for the demurrer procedure requires the 

court to accept the factual pleading as it stands. (Cf. Qualified 

Patients Assn. v. City of Anaheim (2010) 187 Cal.App.4th 734, 

756 [“on the few facts known” about the situation, the court 

“cannot say” what the right answer is] (Qualified).) For material 

factual disputes, we need a fact finder: a jury or bench trial. 

In declaratory judgment cases, dispute over the facts may 

be common. (Cf. Jefferson, Inc. v. City of Torrance (1968) 266 

Cal.App.2d 300, 302 [the defense is rarely satisfied with the 

complaint’s statements of the facts].) Whether that is true does 

not matter here, where there is no factual dispute. What divided 

the parties was a pure and ripe question of law: whether Civil 

Code section 2860 entitled the Darwish family to independent 

counsel. The trial court, and now the Court of Appeal, have 

declared the answer to this legal question. A demurrer thus was

the right way to go.

The demurrer procedure in this case was appropriate and 

sensible. Of the procedural alternatives, the demurrer was the 

fastest way to resolve the only issue in this case. Other 
2

alternatives—summary judgment or full trial—would have been 

slower. They would have cost more resources but yielded no more 

benefit. Nothing in the text of sections 1060 or 1061 of the Code 

of Civil Procedure favors this irrationality.

The authority for the appropriate and sensible demurrer 

approach is the memorable 1963 case of Zeitlin v. Arnebergh

(1963) 59 Cal.2d 901 (Zeitlin). There the renowned Los Angeles 

bookseller Jacob Zeitlin sued Los Angeles City Attorney Roger 

Arnebergh about Arnebergh’s efforts to suppress Henry Miller’s 

then-controversial Tropic of Cancer. Zeitlin appended the book to

his complaint for declaratory judgment. Zeitlin wanted a judicial 

declaration that Tropic of Cancer was not criminally obscene so 

he could sell copies without fear of prosecution. Defendant and 

prosecutor Arnebergh answered the complaint and said he 

believed the book was criminally obscene and he intended to 

prosecute anyone arrested for its sale. (Id. at pp. 903–905.)

Both sides in Zeitlin agreed on the facts: the words in 

Tropic of Cancer. The sole question was whether those words 

were obscene within the meaning of the Penal Code. That 

question was strictly legal. (Zeitlin, supra, 59 Cal.2d. at pp. 908–

911.) 

Zeitlin validated using a demurrer to decide the merits of a 

declaratory judgment action. Arnebergh had filed a general 

demurrer to Zeitlin’s complaint. The trial court sustained the 

demurrer because the trial court read the book and ruled, on the 

merits, it was obscene. (Zeitlin, supra, 59 Cal.2d. at p. 905.) For 

a unanimous Supreme Court, Justice Tobriner held the demurrer 

procedure was right but the substance of the ruling was wrong: 

Tropic of Cancer was not criminally obscene. (See id. at pp. 908–

923.)
3

After Zeitlin, it is legally wrong to say the demurrer 

procedure is an inappropriate method for testing the merits of a 

declaratory relief action. Some more recent authorities thus err. 

(E.g., Qualified, supra, 187 Cal.App.4th at p. 751; Lockheed 

Martin Corp. v. Continental Ins. Co. (2005) 134 Cal.App.4th 187, 

221, disapproved on another ground by State of California v. 

Allstate Ins. Co. (2009) 45 Cal.4th 1008, 1036, fn. 11; 5 Witkin, 

Cal. Procedure (5th ed. 2008 & 2020 supp.) Pleading, § 877.) 

This means there is no reason to accuse a thoughtful trial 

court like this one of error of any kind. 

The 1944 decision in Maguire v. Hibernia Savings & Loan 

Society (1944) 23 Cal.2d 719 (Maguire) did not erect a general 

ban on demurring to declaratory judgment complaints. In 

Maguire, the trial court refused to do what the trial court here 

laudably did: analyze the merits of an “actual controversy” and 

answer a question that divided the litigants. (See id. at p. 723 

[rather than engage the merits, the Maguire trial court avoided 

the merits by saying declaratory relief was neither necessary nor 

proper].) 

Zeitlin cited Maguire and repeated its holding: “a plaintiff 

is entitled to a declaration of his rights, whether the declaration 

be favorable or adverse . . . .” (Zeitlin, supra, 59 Cal.2d. at p. 

908.) Zeitlin then explained what the trial court’s proper 

demurrer ruling should have been: Tropic of Cancer was not 

criminally obscene. (See id. at p. 922 [“Such an art-form must be 

distinguished from that which is designed to excite or attract 

pruriency; [Tropic of Cancer] surely does not constitute hard-core 

pornography.”].) 

This trial court did as Zeitlin commanded. The plaintiffs in 

this case were entitled to a declaration of their rights. The trial 
4

court gave them that declaration—on demurrer. Unlike the trial 

court in Maguire, the trial court here rendered a declaration on 

the merits. Then it signed the judgment. As a practical matter, 

that was a declaratory judgment, for the judgment embodied the 

preceding statement of decision that was its rationale. (See 

Maguire, supra, 23 Cal.2d at p. 729 [“where the plaintiff is not 

entitled to a favorable declaration, the court should render a 

judgment embodying such determination and should not merely 

dismiss the action”].) 

It might be a good practice for a trial court, after ruling on 

a decisive demurrer in a declaratory judgment action, to cut and 

paste the court’s substantive legal analysis into the judgment 

itself, rather than leaving that substance in a separate minute 

order or a statement of decision. (See Essick v. City of Los 

Angeles (1950) 34 Cal.2d 614, 624–625.) Then the “judgment” 

literally would “declare” the rights and duties of the parties; 

voilà: the demurrer would produce a “declaratory judgment” in 

name and in fact. (Cf. Guinn v. County of San Bernardino (2010) 

184 Cal.App.4th 941, 951 [“Although the statement of decision 

makes it clear that the court denied the petition on its merits, the 

judgment does not.”].) 

But here no party made this request. The court already 

had given the parties all they evidently needed.
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In sum, defendants that accept the pleaded facts should, as 

these defendants did, demur to declaratory judgment complaints 

that properly allege actual controversies. Trial courts should, as 

this one did, take up the actual controversies on demurrer and 

give the parties what they want and deserve: an authoritative 

answer to a legal question that divides them. This will serve the 

parties, the public, and the cause of justice.

WILEY, J.