Bales

In this appeal we decide whether an insurer, sued by a third party claimant for violation of Insurance Code *229 section 790.03, may obtain comparative equitable indemnity from the claimant’s former attorney on the theory that the attorney’s negligence at least partially caused the claimant’s damage. We hold that public policy in favor of preserving the undivided loyalty of lawyer to client dictates that the insurer may not obtain indemnity in this situation. We affirm.

Facts and Procedural History

This is an appeal from judgment after the demurrer of respondent Bruce Bales (Bales) to the cross-complaint of appellant California State Automobile Association Inter-Insurance Bureau (CSAA) was sustained without leave to amend. Our review of the facts is limited. “ ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.] Further, we give the [cross-] complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [ 216 Cal.Rptr. 718…