Employers Mutual Casualty Co. v. Philadelphia Indemnity Insurance

Defendant and appellant Philadelphia Indemnity Insurance Company (Philadelphia) and plaintiff and appellant Employers Mutual Casualty Company (Employers) insured Louis Simpson doing business as Villa Park Mobilehome Park (Simpson). Employers and Evanston Insurance Company (Evanston) defended Simpson in Brogan v. Simpson (Super. Ct. L.A. County, 2006, No. BC307069) (Brogan action) against the “failure to maintain” claims of 188 residents of Simpson’s mobilehome park. Employers and Evanston eventually settled for $3 million, allocating $1.2 million to damages and $1.8 million for plaintiffs’ attorney fees under Civil Code section 798.85. Evanston assigned its rights to Employers. Employers sued Philadelphia for contribution and prevailed. Philadelphia was required, inter alia, to contribute $164,613.15 for defense fees and costs. Under the supplementary payments coverage in its policies, Philadelphia was required to contribute $400,000 toward the section 798.85 attorney fees on the theory that they were a taxed cost.

Philadelphia appeals, arguing (1) no costs were taxed against Simpson by a court, so it does not have to contribute toward the $1.8 million payment; (2) the…