Truck Insurance Exchange v. Superior Court

This writ proceeding presents a question whether confirmation of an arbitration award pursuant to Civil Code section 2860 is inconsistent with a prior reservation of rights issued by an insurance carrier. We conclude that it is not, and grant a peremptory writ of mandate ordering the trial court to set aside the original order granting summary adjudication in favor of real parties in interest.

Statement of Facts

On July 24, 1991, real parties in interest, Andrew Cherng, Peggy Cherng, Panda Management Company, Inc., Panda Express, Inc., and Galleria II Panda Express, Inc. (collectively referred to as real parties), were served with a complaint filed in the Los Angeles County Superior Court by Jack Yu and Fung Nien Chow (the Yu action). The complaint alleged that Yu and Chow were business partners with the Cherngs in the various Panda entities.

Petitioner, Truck Insurance Exchange, had issued a number of insurance policies to real parties and they requested that petitioner provide defense and indemnity with regard to the Yu action. Petitioner agreed to provide a defense under a reservation of rights which included the “right to seek reimbursement of any sums spent in…