Interinsurance Exchange of the Automobile Club v. Spectrum Investment Corp.

Introduction

Plaintiff Interinsurance Exchange of the Automobile Club of Southern California appeals from a declaratory judgment in favor of defendant Spectrum Investment Corporation doing business as Budget Rent-A-Car.

Statement of Facts

The case was tried on stipulated facts, as follows: Defendant is in the business of renting motor vehicles to the general public pursuant to a written rental agreement. Paragraph 9 of that agreement provides, in pertinent part, that defendant “complies with the requirements of the California State Financial Responsibility Law which compliance may be afforded by insurance, bond, self-insurance program or other program permitted by law, or a combination of any of these.” Defendant complied with the financial responsibility law by filing a certificate of deposit with the California Department of Motor Vehicles, pursuant to Vehicle Code section 16054.2.

On January 4, 1986, defendant rented an automobile to Julie B. Corcoran. On January 8, while she was driving the automobile, Ms. Corcoran was involved in a traffic accident resulting in injury, and claims were filed against Ms. Corcoran and defendant.

At the time of the accident, Ms.…