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Fireman''s Fund Insurance. Co. v. Maryland Casualty Co.7/31/1998
s discussed, contribution is only available in cases where there are coinsurers who share the same level of obligation on the same risk. One insurer has no right of contribution from another insurer with respect to its payment on an obligation for which it was primarily responsible, and as to which the liability of the second insurer was only secondary. (Herrick Corp. v. Canadian Ins. Co., supra, 29 Cal.App.4th at p. 759; 16 Couch, supra, Contribution & Apportionment, ยงยง 62:142-62:144, at pp. 611-615.) In American Physicians, the three insurance carriers did not cover the same claims, risks or liabilities. The two malpractice insurers clearly had primary responsibility for the malpractice cause of action, as to which the premises liability insurer had (at most) secondary responsibility. It necessarily follows that equitable contribution was unavailable in that case. On the other hand, this is precisely the kind of situation to which equitable subrogation applies, since the claimed loss was one for which the premises liability insurer was not primarily liable, and Justice required that that loss be shifted to the parties (in this case, the malpractice insurers) whose equitable position was inferior. (Fireman's Fund Ins. Co. v. Wilshire Film Ventures, Inc., supra, 52 Cal.App.4th at pp. 556-558.) It was actually the parties in American Physicians who had confused contribution and subrogation, not the court.
Another example of the differing factual contexts in which the courts apply contribution and subrogation is provided by Commercial Union Assurance Companies v. Safeway Stores, Inc. (1980) 26 Cal.3d 912 (Safeway Stores). Both in its briefs and in oral argument, Maryland has cited isolated language from this case in support of its assertions that there is no independent right of action between insurers for equitable contribution, and that an insurance carrier's right to sue another insurer covering the same risk is based solely on the extent to which the first carrier is subrogated to the rights of the insured.
In fact, Safeway Stores has nothing to do with equitable contribution between insurers covering the same risk. Instead, the case deals with the entirely different issue of whether an insured owes a duty to its excess liability insurance carrier to accept a settlement offer within the policy limits of the primary insurer and below the threshold level at which the excess carrier's exposure commences. (Safeway Stores, supra, 26 Cal.3d at p. 915.) Safeway Stores holds that an excess insurance policy imposes no such implied duty on the insured to accept a settlement offer which would avoid exposing the excess insurer to liability. (Id. at pp. 918-921.) In passing, the Supreme Court mentioned that the right of an excess insurance carrier to maintain an action against a primary carrier for the latter's wrongful refusal to settle within the policy limits of the primary policy is based on equitable subrogation. As in American Physicians, this conclusion necessarily follows from the subrogation principle that responsibility for a loss should be shifted from the party paying the claim to the party primarily liable in the first instance. Once again, equitable contribution is only available where coinsurers share the same primary level of liability on the same risk. Consequently, in the absence of an express agreement to the contrary, there is never any right to contribution between primary and excess carriers of the same insured. (Signal Companies, Inc. v. Harbor Ins. Co., supra, 27 Cal.3d at pp. 367-368.) In short, Safeway Stores is not a contribution case at all, and in no way supports the asserted proposition for which Maryland cites it.
As we indicated at the outset, Maryland's positi
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