Safeco Insurance Co. of America v. Superior Court

— The question before us in this writ proceeding is whether petitioner, Safeco Insurance Company of America (Safeco), is obligated to pay a stipulated judgment entered into by its insureds without Safeco’s consent when Safeco had undertaken a defense of the liability action. We conclude that Safeco is not bound by the stipulated judgment, and we grant Safeco’s petition for a writ of mandate to compel the trial court to grant its motion for summary judgment.

I. Background

The underlying action was a wrongful death action brought by the McKinney family, real parties in interest, after Patrick McKinney was shot and killed while driving his truck. The defendants in that wrongful death action included the teenage shooter (Matthew Espinal), the teenage driver of a second car (Greg Van Huisen) accompanying the car driven by the shooter, and the parents of Greg Van Huisen (Paul and Deborah Read) at whose house all the defendant youths had been drinking that night.

Safeco insured the Reads under a homeowners policy, and although the policy excludes injuries arising from the use of a motor vehicle, Safeco agreed to defend the Reads subject to a reservation of rights. Mercury…