Opinion ID: 1382827
Heading Depth: 1
Heading Rank: 9

Heading: hartford's opportunity to litigate the damages

Text: (8a) The trial court held Hartford bound by the amount of the judgment obtained by plaintiffs against Dr. Lovelace. Hartford argues that since it had no opportunity to litigate the issues in the suit brought against Dr. Lovelace by the plaintiffs, it cannot be bound by the amount of the judgment obtained therein. We disagree. (9) In Ford v. Providence Washington Ins. Co., supra, 151 Cal. App.2d 431, it is stated to be the general rule that an insurer who has had an opportunity to defend is bound by the judgment against its insured as to all issues which were litigated in the action against the insured. (151 Cal. App.2d at p. 436.) The operation of this rule, the court goes on to state, depends primarily upon notice to the insurer of the pendency of the action. ( Id., at p. 437.) These statements appear to accurately state the general rules governing these cases. (See Bonfils v. Pacific Auto Ins. Co. (1958) 165 Cal. App.2d 152, 161 [331 P.2d 766]; see generally, 39 Cal.Jur.3d, Insurance Contracts, § 431, pp. 733-734.) (8b) We are persuaded, nevertheless, that the insurer herein received the kind of notice ... of the pendency of the [wrongful death] action which should result in its being bound by the amount of damages found in that action to have been sustained by plaintiffs. We have indicated that Hartford was found by the trial court to have been aware of the shooting incident within a week of its occurrence, although its first notice of the pendency of the wrongful death action occurred when, on the day before the hearing on default judgment following Lovelace's default, it was notified of that hearing by a telephone call and telegram from plaintiffs' attorney. Within a few weeks thereafter Hartford directed a letter to Lovelace's attorney in which it disclaimed coverage and asked to be advised of Lovelace's intentions, but it at no time sought to have the default judgment set aside on any ground. Even if it be conceded that the insurer had little opportunity to make an intelligent entry into the case by way of intervention or otherwise when, on the day before the default hearing, it first received notice of the action, it nevertheless had an opportunity for a reasonable period, up to six months thereafter, to assume control and management of the suit by way of an application for relief pursuant to Code of Civil Procedure section 473. Its failure to take advantage of this opportunity requires that the instant contention be resolved against it. Code of Civil Procedure section 473 provides in part: The court may, upon such terms as may be just, relieve a party or his legal representative from a judgment ... taken against him through his mistake, inadvertence, surprise or excusable neglect. (Italics added.) The term legal representative has been interpreted with considerable liberality to permit one who would not normally be considered a representative of a party but has a sufficient interest in the action to maintain the motion. (See, e.g., Nuckolls v. Bank of California (1937) 10 Cal.2d 266, 272 [61 P.2d 927] (trustee in bankruptcy as successor of bankrupt party); Trumpler v. Trumpler (1899) 123 Cal. 248, 253 [55 P. 1008] (successor in interest to property); Skolsky v. Electronovision Productions, Inc. (1967) 254 Cal. App.2d 246, 248 [62 Cal. Rptr. 91] (person who obtained bond to release attachment of defendant's property in which he had contractual rights); Guardianship of Levy (1955) 137 Cal. App.2d 237, 244 [290 P.2d 320] (person contesting appointment of another as guardian and seeking appointment himself); Estate of Seaman (1921) 51 Cal. App. 409, 411 [196 P. 928] (creditor of estate).) The Skolsky case is particularly instructive on this point. There the defendant gave a bond to release an attachment after Magna, a nonparty who had certain contractual rights respecting the property, provided the surety with a substantial letter of credit as security. The defendant then defaulted. The Court of Appeal, relying on our decisions in Johnson v. Hayes Cal Builders, Inc. (1963) 60 Cal.2d 572 [35 Cal. Rptr. 618, 387 P.2d 394], Drinkhouse v. Van Ness (1927) 202 Cal. 359 [260 P. 869], and Elliott v. Superior Court (1904) 144 Cal. 501 [77 P. 1109], held that Magna had a sufficient interest in the subject matter of the action to bring a motion to set aside the default judgment under section 473. Quoting from Elliott the court stated: `There is in fact another plain, speedy, and adequate remedy allowed by our practice to one whose rights or interests are injuriously affected by the judgment or by any appealable order to a court given or made in an action or proceeding to which he is not a party. He may make himself a party by moving to set aside such judgment or order, and if his motion is denied may, on appeal from that order, have the proceeding of which he complains reviewed not only for excess of jurisdiction but for error.' (254 Cal. App.2d at p. 249.) The standing of Hartford to move to set aside the default judgment which it might otherwise be required to satisfy is therefore clear. It would appear, moreover, that had it sought to set aside the judgment it would have had little difficulty making out a case for a mistake, inadvertence, surprise or excusable neglect. (See generally 5 Witkin, Cal. Procedure (2d ed. 1971) Attack on Judgment in Trial Court, §§ 126-147, pp. 3702-3703.) Thus, under the circumstances, we hold that Hartford had ample opportunity to seek an adjudication of the damages. It knew or should have known that judgment against its insured would form the basis for a later claim against it under Insurance Code section 11580. Instead of protecting itself by means of a section 473 motion it chose to remain silent, resting on its claim of noncoverage. Having failed to pursue remedies thus available to it, it cannot now claim prejudice or lack of opportunity to litigate damages.