Hartford Accid. & Indem. Co. v. Superior Court of San Diego Cty.

This writ petition arises from the effort by real party in interest Landmark Insurance Company (Landmark) to extricate itself from a “bad faith” lawsuit. Landmark’s insured had alleged that numerous insurers including Landmark had provided coverage for a claim, that they had failed to defend and indemnify in connection with that claim, and that this failure breached their contracts as well as the implied covenant of good faith and fair dealing. The insured later settled with Landmark. As a condition to settling, Landmark required that it be extricated from the nonsettling insurers’ cross-claims against it for contribution. Landmark sought such exoneration through the vehicle of the “good faith settlement” statute, Code of Civil Procedure section 877.6.

We must now decide the question we raised but ultimately did not decide in Fireman’s Fund Ins. Co. v. Maryland Casualty Co. (1994) 21 Cal.App.4th 1586 [ 26 Cal.Rptr.2d 762 ]. Specifically, the issue is whether the protections afforded by section 877.6 apply when the lawsuit is brought by the insured against multiple insurers allegedly covering the same “loss,” one insurer settles with the insured, and the settling insurer…