Martocchio

We hold in this case that a party ordered to pay attorney fees on the authority of Code of Civil Procedure section 128.5 is precluded by Insurance Code section 533 from recovering such fees under the provisions of a comprehensive general liability insurance policy insuring against liability for malicious prosecution.

I. Facts and Procedural History

The underlying facts of this litigation have been the subject of an unpublished opinion on a prior appeal in this division (Martocchio v. Chronicle Broadcasting Co. (Mar. 13, 1990) A041774 [nonpub. opn.]). Chronicle prepared and broadcast a report on arson in the San Francisco area. The report recounted the long history of suspicious fires on numerous properties owned by appellant Joseph Martocchio (Martocchio) and insured by him through various insurers. The program stated that Martocchio was under investigation by law enforcement authorities for engaging in arson for profit, by allegedly insuring his buildings for more than they were worth and then burning them down. A former associate of Martocchio’s appeared on the telecast, recounting a distinctive method which he stated Martocchio and his sons used to set the fires, in…