Mercury Casualty Co. v. Hertz Corp.

Mercury Casualty Company issued an automobile liability policy to Rita Gutierrez. The policy covered Gutierrez’s use of rental cars. Gutierrez rented an automobile from The Hertz Corporation. Hertz was self-insured as the owner of the car. Gutierrez was involved in an accident with a third party, who filed suit against her and Hertz.

Gutierrez tendered the defense of the action to Mercury. Mercury, in turn, tendered the defense to Hertz. Hertz declined to provide a defense for Gutierrez but did retain counsel to represent itself in the third party action. Mercury provided Gutierrez with a defense and settled the action, paying a total of approximately $12,000.

Mercury brought this suit against Hertz to recover the costs of defense and indemnity, alleging that Hertz had provided primary coverage for the rental car as a self-insured owner. The trial court concluded that the Mercury policy was primary and granted summary judgment in favor of Hertz. We affirm.

Background

Mercury issued a personal automobile liability policy to Gutierrez as the named insured for the period August 19, 1993, through August 19, 1994. The policy obligated Mercury to “pay damages for ‘bodily…