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Sawyer v. Westchester Fire Insurance Company11/20/2002
ders for summary judgment or summary adjudication, our review is de novo. (Beroiz v. Wahl (2000) 84 Cal.App.4th 485, 491.) In conducting this review, we recognize that a motion for summary judgment "shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Code Civ. Proc., § 437c, subd. (c).)
A defendant moving for summary judgment meets this burden by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to the action. (Code Civ. Proc., § 437c, subd. (o)(2).) Once the defendant makes this showing, the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action or defense. (Barton v. Elexsys Internat., Inc. (1998) 62 Cal.App.4th 1182, 1187.)
A plaintiff or complainant moving for summary judgment or summary adjudication meets its burden by "prov each element of the cause of action entitling the party to judgment on that cause of action." (Code Civ. Proc., § 437c, subd. (o)(1).)
DISCUSSION
A. St. Paul Had No Duty to Indemnify
Appellants contend that the trial court erred in denying their motion for summary adjudication and granting St. Paul's cross-motion for summary adjudication on the issue of whether St. Paul had a duty to indemnify appellants for the judgment entered in their favor against the State in the underlying actions. The trial court's ruling that St. Paul had no duty to indemnify was based on the following grounds, all of which appellants challenge on appeal: (1) the stipulated judgment did not constitute a "default" judgment binding on the insurer; (2) the stipulated judgment was not reasonable as a matter of law because the State had a valid defense of design immunity and this court had already established that MCM was not negligent; and (3) the judgment was not covered under the terms of the policy.
Appellants' judgment was not binding on St. Paul
In this case, appellants brought a "direct action" against St. Paul under Insurance Code section 11580 to recover the amount of the judgment against the State and also sued St. Paul for breach of contract and bad faith as assignees of the State. Section 11580, subdivision (b)(2) provides that certain liability insurance policies issued in California must provide that if a judgment is secured against the insured, an action may be brought directly against the insurer by the judgment creditor "on the policy and subject to its terms and limitations." Appellants contend that the trial court erred in finding that the stipulated judgment against the State following the bench trial was not binding on St. Paul. Appellant's contention lacks merit.
In reaching its decision that the judgment was not binding on St. Paul, the trial court relied on the reasoning in Pruyn v. Agricultural Ins. Co. (1995) 36 Cal.App.4th 500. The Pruyn court recognized that a number of cases have held that in order for a final judgment to be binding on an insurer it need not be based on a contested or adversary trial but may rest upon a default hearing held following settlement (National Union Fire Ins. Co. v. Lynette C. (1994) 27 Cal.App.4th 1434, 1449) or an uncontested trial where the insured settled with the claimant and thereafter provided no defense. (Samson v. Transamerica Ins. Co. (1981) 30 Cal.3d 220, 236-242.) The Pruyn court stated that the reason for this rule is that an insurer which has wrongfully abandoned its insured by failing to defend an action cannot be heard to later complain or relitigate the judgment because " hatever the terms of the sett
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