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Farmers Ins. Exchange v. Zerin2/27/1997
PUGLIA, P. J.
Plaintiff, Farmers Insurance Exchange (Farmers), appeals from a judgment of dismissal entered after the trial court sustained general demurrers to the complaint, in part with leave to amend, and Farmers declined to amend. Farmers contends the complaint adequately states causes of action for conversion, breach of constructive trust, declaration of a lien, negligent and intentional interference with contract, money had and received, and a general declaration of rights. We shall affirm.
I
For purposes of appeal, we accept as true the facts as alleged in the complaint. ( Blank v. Kirwan (1985) 39 Cal. 3d 311, 318 [216 Cal. Rptr. 718, 703 P.2d 58].) Farmers issued separate policies of automobile insurance to Joseph Stewart and Linda Kendrick, which provide for the payment of medical benefits in the event of an accident in which the insured or another covered person is injured. On or about August 13, 1991, Stewart was involved in an accident in which he and Jimmy Stinnett were injured. Stewart and Stinnett submitted a claim for medical benefits under Stewart's insurance policy and Farmers paid the sum of $10,000. On or about July 25, 1992, Kendrick was involved in an automobile accident in which Jennifer Silva was injured. Silva submitted a claim for medical benefits under Kendrick's insurance policy and Farmers paid the sum of $2,000.
The policies issued to Stewart and Kendrick both contain the following provision: "When a person has been paid damages by us under this policy and also recovers from another, the amount recovered from the other shall be held by that person in trust for us and reimbursed to us to the extent of our payment. . . ."
Stewart, Stinnett, and Silva (the insureds) hired defendant, Jonathan J. Zerin, an attorney, to represent them in connection with their claims against third party tortfeasors allegedly responsible for their injuries. Farmers notified defendant of the policy provisions requiring reimbursement upon recovery from third parties. Defendant thereafter received payments from third party tortfeasors on behalf of the insureds but failed to pay any portion to Farmers, disbursing the funds instead to himself and others.
Farmers initiated this action against defendant alleging seven causes of action regarding the payments received on behalf of Stewart and Stinnett: (1) conversion; (2) breach of constructive trust; (3) declaration of an equitable lien; (4) intentional interference with contract; (5) negligent interference with contract; (6) money had and received; and (7) declaratory relief. Essentially identical causes of action, the eighth through the fourteenth, are alleged as to payments received on behalf of Silva.
Defendant interposed general demurrers, arguing none of the causes of action state a claim for relief because the policy language does not create a lien on third party recoveries or a trust relationship between Farmers and defendant. Defendant further argued the complaint does not allege adequate notice of Farmers' claim or demand for payment. Finally, defendant argued the allegations of the complaint establish defendant is not in possession of the alleged trust res.
The trial court sustained the demurrers without leave to amend as to the third and tenth causes of action (declaration of an equitable lien) and with leave to amend as to the remaining causes of action. Farmers declined to amend and defendant moved to dismiss. The trial court granted defendant's motion.
II
"In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. 'We treat the demurrer as admitting all material fac
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