Security Mutual Casualty Co. v. Transport Indemnity Co.

*1012 Opinion

This is an appeal from an order of dismissal (“judgment,” Code Civ. Proc. § 58 Id) following the sustaining of demurrers to plaintiff’s third amended complaint.

That complaint alleges as follows:

On November 1, 1957, plaintiff, a reinsurance company, entered into a written contract with defendants Transport Indemnity Company and Transport Underwriters Association (hereinafter Transport). After-wards, defendants Transport issued a policy of insurance to defendant Tanner Motors Tour, Ltd., which provided that Transport would indemnify Tanner for any liability in connection with, or arising out of the use of, a certain passenger bus and to defend Tanner in connection with any claims made asserting such liability. The risk thus insured by Transport was reinsured by plaintiff under the earlier reinsurance policy.

On May 4, 1962, the bus that was insured by Transport and reinsured by plaintiff was involved in an accident. Transport settled various claims, but did not settle the claim made by Nettie Gelfand, a passenger. Since Transport’s retention was exhausted in settling the other claims and in paying judgments, plaintiff, the reinsurer, defended Tanner in an action…

I concur in the result reached by Justice Dunn of affirming the order of dismissal following the sustaining of defendants’ demurrers to plaintiff’s third amended complaint.

Plaintiff contends that its failure to draw a distinction in its complaint between defendant Transport Underwriters Association and defendant Transport Indemnity is not fatal to a valid statement of its causes of action. This contention is unacceptable in light of the fact that the demurrers to plaintiff’s complaint were both special and general demurrers. A copy of the contract of reinsurance, attached to the complaint as an exhibit and incorporated therein by reference, shows that the contract was entered into between plaintiff and Transport Underwriters. In one paragraph of the complaint, however, plaintiff alleges that the contract was entered into by plaintiff as one. party with Transport Indemnity and Transport Underwriters “jointly” as the other party.

Plaintiff asserts that its complaint was good against demurrer without any allegation of agent-principal relationship between Transport Underwriters and Transport Indemnity since there was an allegation of the *1017 ultimate fact of the making of the…

I dissent.

(1) I concur in the portion of Justice Dunn’s opinion that holds that any defect in joining Transport Indemnity is not now significant. The trial court sustained a general demurrer on the authority of Lan Franco. The special demurrer, to which Justice Jefferson refers, was thereby rendered immaterial. If the case is remanded, Transport Indemnity may, if it still so desires, press its contention of uncertainty and secure a formal amendment, stating expressly what is clearly inferred, namely that both Transports were agents of each other. The omission of that formal allegation is no ground for affirming a general demurrer.

(2) I agree with Justice Jefferson that, under the authority of the cases he cites, Tanner and both Transports had a duty toward Security not to take affirmative action that impaired the subrogation rights of Security as the ultimate insurer.

(3) I base my dissent on my view that Tanner did have a potential cause of action against Flxible, and that Lan Franco is distinguishable. In Lan Franco, an injured train passenger sued the Santa Fe Railroad and a truck driver; the railroad cross-complained against the truck driver and his employer, alleging…

This is an appeal from an order of dismissal ("judgment," Code Civ. Proc. § 581d) following the sustaining of demurrers to plaintiff's third amended complaint.

That complaint alleges as follows:

On November 1, 1957, plaintiff, a reinsurance company, entered into a written contract with defendants Transport Indemnity Company and Transport Underwriters Association (hereinafter Transport). Afterwards, defendants Transport issued a policy of insurance to defendant Tanner Motors Tour, Ltd., which provided that Transport would indemnify Tanner for any liability in connection with, or arising out of the use of, a certain passenger bus and to defend Tanner in connection with any claims made asserting such liability. The risk thus insured by Transport was reinsured by plaintiff under the earlier reinsurance policy.

On May 4, 1962, the bus that was insured by Transport and reinsured by plaintiff was involved in an accident. Transport settled various claims, but did not settle the claim made by Nettie Gelfand, a passenger. Since Transport's retention was exhausted in settling the other claims and in paying judgments, plaintiff, the reinsurer, defended Tanner in an…