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Condor Ins. Co. v. Williamsburg Nat. Ins. Co.9/19/1996
ARMSTRONG, J.
Condor Insurance Company (Condor) appeals the judgment entered following the successful demurrer of Williamsburg National Insurance Company (Williamsburg) to Condor's complaint for declaratory relief. In this opinion we consider the effect of the Public Utilities Commission (P.U.C.) endorsement contained in the automobile liability insurance policy of a P.U.C. permit holder, which provides, among other things, minimum amounts of liability insurance.
FACTS
The allegations of Condor's first amended complaint, which we must accept as true for purposes of reviewing the judgment ( Serrano v. Priest (1971) 5 Cal. 3d 584, 591 [96 Cal. Rptr. 601, 487 P.2d 1241, 41 A.L.R.3d 1187]), reveal the following facts: Condor issued an automobile liability insurance policy to Ann B. Mabry, doing business as Sunshine Express, with liability limits of $250,000 per person and $500,000 per accident. Mabry owned the tractor/trailer rig insured under and described in the Condor policy (the Mabry Truck). Sandra Musial, Mabry's employee, was operating the Mabry Truck on October 9, 1991, when it collided with a vehicle driven by Greg Leamon.
At the time of the accident, Mabry and Musial (who together are referred to herein as the Condor Insureds) were subhauling a load under the P.U.C. permit of Ayala Brothers Trucking. As such, at the time of the accident, the Mabry Truck was a vehicle for which a permit was required to be issued by the P.U.C. Ayala Brothers Trucking, as well as its principals Jesus Ayala, Jr., and Raul B. Ayala (who are together referred to as the Williamsburg Insureds), were the named insureds under a policy of automobile liability insurance issued by Williamsburg.
Leamon filed a complaint against the Condor Insureds for injuries suffered in the accident, which action Condor defended. Leamon made a demand to settle the case for the Condor policy limits of $250,000; Condor rejected that offer. A jury subsequently returned a verdict against the Condor Insureds in the amount of $1,314,200.
Condor immediately paid Leamon its policy limits of $250,000, along with $105,000 in costs awarded by the court. Condor then filed this declaratory relief action against Williamsburg, Mabry, and Musial, seeking a declaration that it had satisfied its obligations to Mabry and Musial under the insurance policy, and that Williamsburg was required to contribute its policy limits towards the judgment entered in favor of Leamon against the Condor Insureds by reason of the P.U.C. endorsement attached to the Williamsburg policy. That endorsement states: "The policy to which this endorsement is attached is . . . hereby amended to assure compliance by the insured, . . . with General Order No. 100-series and the pertinent rules and regulations of the Public Utilities Commission of the State of California. . . . he Company hereby agrees to pay, within the limits of liability hereinafter provided, any final judgment rendered against the insured for . . . loss of or damage to property of others . . . resulting from the operation, maintenance, or use of motor vehicles for which a certificate of public convenience and necessity or permit is required or has been issued to the insured by the Public Utilities Commission of the State of California, regardless of whether such motor vehicles and/or trailers are specifically described in the policy or not, and/or resulting from any other action by the insured and/or the insured's employees while engaged in the course of performing under the aforementioned certificate of public convenience and necessity or permit."
The trial court sustained Williamsburg's demurrer. The court specifically found that "William
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