Transport Indemnity Co. v. Aerojet General Corp.

The sole issue before the court is whether an insurance company providing workers' compensation and employers' liability coverage has a duty to defend or indemnify an insured employer who is sued for allegedly aggravating an employee's injuries. The trial court decided there was no duty to defend or indemnify as a matter of law and granted the insurance company's motion for summary judgment. The insured employer appeals. We shall reverse.

In 1984 Aerojet General Corporation (Aerojet) was sued by Robert Andrade and George Landis, two former employees, for fraudulent concealment of the nature and extent of work-induced injuries, thereby aggravating those injuries. Landis later died, and his wife commenced a wrongful death action with similar allegations.

The lawsuits of Andrade and the Landises thus sought to avoid the exclusivity of workers' compensation remedies (Lab. Code, §§ 3601, 3602), by alleging actions under Johns-Manville Products Corp. v. Superior Court (1980) 27 Cal.3d 465 [ 165 Cal. Rptr. 858 , 612 P.2d 948 , 9 A.L.R.4th 758 ]. The California Supreme Court in Johns-Manville recognized an exception to workers' compensation remedies where an…