West American Insurance v. California Mutual Insurance

Two insurance companies, West American and California Mutual, sought a declaratory judgment assigning responsibility for defending and indemnifying the insured in a personal injury suit. The trial court determined that an employment exception in West American’s policy relieved it of any duty to defend or indemnify, but that a business pursuit exception in the California Mutual policy did not apply under the circumstances of the injury. California Mutual was therefore held to have the sole responsibility to defend and indemnify the insured.

California Mutual appeals, arguing that there was insufficient evidence before the trial court to find that the employment exclusion was triggered, relieving West American of its contractual duties. California Mutual also argues that there was insufficient evidence to support the trial court’s conclusion that its business pursuit exclusion did not apply. We agree.

At the time of his injury the employee was engaged in voluntary social activities which did not arise out of and in the course of his employment, but which did fall within the business pursuits of the insured. The judgment is reversed. West American, rather than California…