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Sawyer v. Westchester Fire Insurance Company11/20/2002
summary judgment or summary adjudication on the following grounds: (1) that the decision of this court in affirming the summary judgment in favor of MCM in the underlying actions established that any liability of the State was for its sole and active negligence, and appellants were collaterally estopped to argue the contrary; (2) that the judgment against the State was excluded from coverage under the additional insured endorsement prescribed by the State; (3) that appellants could not enforce their stipulated judgment against St. Paul because the judgment did not represent a reasonable settlement when the State had a valid affirmative defense of design immunity; and (4) that St. Paul had no duty to defend because the underlying actions did not arise out of any operations performed by MCM.
On April 3, 2000, Judge Victoria Chaney rendered her decision on the cross-motions. Judge Chaney denied both motions for summary judgment, but granted summary adjudication in favor of appellants on the duty to defend, and granted summary adjudication in favor of St. Paul on the duty to indemnify the judgment. Judge Chaney found that: (1) the stipulated judgment was not a default because the State had answered the complaints and agreed to the stipulation; (2) the stipulated judgment was not reasonable because the State had a valid design immunity defense; (3) the judgment was not covered under the additional insured endorsement because, in light of this court's affirmance of MCM's summary judgment, the judgment was necessarily based on the sole negligence of the State; and (4) St. Paul had a duty to defend the State because the facts known to it did not eliminate the potential for coverage. Judge Chaney also ruled that the measure of damages for St. Paul's breach of the duty to defend was limited to the costs and attorney fees incurred by the State for its defense of the underlying actions, and did not include the amount of the stipulated judgment.
The issue of the amount of attorney fees was tried to the court on September 12, 2000, and fees were awarded to appellants in the amount of $173,250.00. On November 6, 2000, St. Paul moved for a new trial on the grounds that the court had awarded excessive damages and the evidence was insufficient to support the judgment. The motion was denied on December 13, 2000. Appellants filed their notice of appeal on January 8, 2001, and St. Paul filed its notice of cross-appeal on January 25, 2001.
B. Westchester's Motion for Summary Judgment
On January 12, 2000, while appellants and St. Paul's cross-motions for summary judgment were still pending, appellants amended their complaint to include MCM's excess carrier, respondent Westchester Fire Insurance Company, as a defendant in the action. Following the court's ruling on the cross-motions, Westchester demurred to the third amended complaint on the ground that the court's ruling on the cross-motions had rendered the complaint meritless. The court overruled the demurrer stating that the issues were better addressed in a summary judgment motion. Westchester subsequently moved for summary judgment, which was granted by Judge Richard C. Hubbell on August 30, 2000. Judge Hubbell found that: (1) the State was not listed as a named insured or an additional insured in the Westchester policy and therefore did not qualify as an insured under the policy; and (2) Westchester did not have a duty to defend the State based on the terms of the policy, the undisputed existence of the primary insurance, and St. Paul's established duty to defend. Appellants filed their notice of appeal from the summary judgment on October 27, 2000.
STANDARD OF REVIEW
Because these appeals seek review of or
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