Interstate Fire & Casualty Insurance v. California Insurance Guarantee Ass'n

This appeal is from a judgment entered March 14, 1980, after the demurrer of defendant California Insurance Guarantee Association (hereafter CIGA) to the amended complaint of Interstate Fire and Casualty Insurance Company (hereafter Interstate) was sustained without leave to amend.

The amended complaint is in four counts, each based upon the same alleged facts embellished with various legal theories. Although the complaint is denominated “for declaratory relief,” it is in substance an action on a matured claim for money allegedly due.

Allstar Insurance Corporation (hereafter Allstar) issued to Holiday Hill Ski Lift (hereafter Holiday) primary liability insurance with limits of $100,000 per claimant. Plaintiff Interstate provided excess insurance for losses over $100,000, with a limit of $1 million. A person named Schuller, who was injured on Holiday’s premises, sued Holiday for $250,000 in damages. Around March 7, 1977, when the case was at issue, Alistar became insolvent, and CIGA took over the defense *908 pursuant to Insurance Code section 1063.2. It is alleged that both All-star, prior to its insolvency, and CIGA, afterwards, had opportunities to settle the injury…

Concurring and Dissenting. I agree with the majority that the appellant must fail in its action to recover for the alleged wrong of Allstar for the claimed failure of Allstar to make a prompt and reasonable settlement within the policy limits. The statute clearly *915 establishes that CIGA funds may not be used to compensate for the wrongful acts of the insolvent insurer. (Ins. Code, § 1063.2, subd. (g).)

I concur also in the reasoning and conclusion reached by the majority in barring appellant’s claim insofar as it is based on equitable subrogation, in that section 1063.1, subdivision (c)(7) forbids CIGA to pay such claims.

I disagree, however, with the analysis of, and conclusion that, CIGA is immune from tort liability for violation of the Unfair Practices Act, Insurance Code section 790 et seq.

The purpose of the act as set forth in section 790 “is to regulate trade practices in the business of insurance ... by defining, or providing for the determination of, all such practices in this State which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.” It is contended that CIGA is…