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Home Insurance Co. v. Zurich Insurance Co.2/7/2002
reto, or failed to take advantage of liberal discovery policies to fully investigate his or her claim, any fraud is intrinsic fraud." (In re Marriage of Stevenot, supra, at p. 1069.) Generally, the introduction of perjured testimony or false documents, or the concealment or suppression of material evidence is deemed intrinsic fraud. (Kachig v. Boothe (1971) 22 Cal.App.3d 626, 634.)
The fraud alleged in the first amended complaint, misrepresentation of insurance policy limits, is not extrinsic fraud. It did not prevent Pinasco and Main from presenting their case against Canfield in court.
A reasonable investigation and use of discovery would have disclosed the true extent of insurance coverage. No cause of action can be stated to set aside the release for extrinsic fraud.
An additional question is whether Home, who was not a party to the release, may set it aside. Home seeks to stand in the shoes of Pinasco and Main as a subrogee. As an underinsured motorist insurer, Home has no right of subrogation. (Hartford Fire Ins. Co. v. Macri (1992) 4 Cal.4th 318, 328.) Home's interests are fully protected and limited to the right of reimbursement or credit for the amount the insured receives from the underinsured tortfeasor or his insurer. (Ins. Code, § 11580.2, subd. (p)(5).) Further, Home had no legal obligation to pay underinsured motorist benefits until Pinasco and Main received payment of the limits of Canfield's policy. (Ins. Code, § 11580.2, subd. (p)(3).)
Home contends Marci does not apply because the limits of Canfield's policy were not paid out and public policy requires permitting subrogation in this case. Home argues it made the payment to avoid a bad faith claim. While equitable subrogation is not available to one who acts as a volunteer in making the payment, courts have liberalized their interpretation of the interest the payment is made to protect an insurer who pays a claim for which it is not legally responsible may be entitled to equitable subrogation. (See State Farm Fire & Casualty Co. v. East Bay Municipal Utility Dist. (1997) 53 Cal.App.4th 769, 774-779.)
Courts, however, have been reluctant to apply equitable subrogation in the underinsured motorist context. (Mercury Ins. Co. v. Enterprise Rent-A-Car Co. (2000) 80 Cal.App.4th 41, 50.) Since we determine Home cannot state a cause of action to set aside the release for extrinsic fraud, we need not determine whether Home's payment made it a volunteer ineligible for subrogation.
The alleged misrepresentation about the available policy limits was the basis for all of Home's claims, either as the act of fraud or as grounds to invalidate the release, and thus open the door to a subrogation action. Because the alleged misrepresentation was absolutely privileged and did not constitute extrinsic fraud, the court did not err in sustaining the demurrer without leave to amend and dismissing the lawsuit.
DISPOSITION
The judgment is affirmed.
(CERTIFIED FOR PUBLICATION.)
We concur:
BLEASE , Acting P.J.
CALLAHAN , J.
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