Stonewall Surplus Lines Insurance v. Johnson Controls, Inc.

Good Law
14 Cal. App. 4th 637·17 Cal. Rptr. 2d 713·1993 Cal. App. LEXIS 306·93 Daily Journal DAR 4700·93 Cal. Daily Op. Serv. 2741
Court of Appeal of CaliforniaMarch 24, 1993D013420California4,708 words

Opinion

Opinion

Benke, J.

In this case a San Diego jury returned a verdict assessing $6.5 million in exemplary damages against a Wisconsin corporation. The corporation’s liability insurers, residents of Connecticut, Alabama, Texas and Illinois, filed a declaratory relief action alleging they were not required to provide the corporation with any indemnity for the exemplary damages. The corporation answered the complaint, alleging Wisconsin law governed the policies and under Wisconsin law the insurers were liable for both compensatory and punitive damages.

On cross-motions for summary judgment the trial court agreed with the insurers and entered judgment in favor of the insurers. On appeal we affirm.

The parties agree that in California an insured may not seek indemnity from an insurer for exemplary damages. Because the defective battery which gave rise to the underlying claim was manufactured in California and caused injury in California to a California resident, California has an interest which supports application of this restriction on insurance coverage.

Factual and Procedural History

A. Jones Action

On June 3, 1986, a resident of San Diego, Gary Jones was assisting his neighbor Fred Hill…

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