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Catholic Mutual Relief Society v. Superior Court of the County of Los Angeles4/25/2005
e Civil Discovery Act of 1986 (ยง 2016, et seq.). Before then, the discovery statutes did not provide for the discovery of a defendant's liability insurance information. Even though such information was not admissible, a case law exception to its discoverability had evolved. That exception arose from Insurance Code section 11580, which required every policy of liability insurance to state that a plaintiff who obtains a judgment against an insured defendant is then entitled to sue the defendant's insurer to recover the policy benefits. As a result of that statute, a contractual relationship was created between the insurer and every person who might be injured by the insured, giving the injured person a "discoverable interest" in the existence and terms of the defendant's liability policy. (Superior Ins. Co. v. Superior Court (1951) 37 Cal.2d 749, 754; Pettie v. Superior Court (1960) 178 Cal.App.2d 680, 684-688 (Pettie); Laddon, supra, 167 Cal.App.2d at p. 395.) The Pettie court noted in dicta that allowing such discovery could also help settle more cases because plaintiffs could learn whether there might be no more than a nominal recovery that would not justify extensive trial preparation and, because an insurer generally steps into the shoes of its insured, the plaintiff would be able to deal with his true litigation adversary. (Pettie, supra, at p. 690.)
As part of its holding, the Laddon court said that an injured plaintiff was entitled to learn of the "existence and extent" of the defendant's liability insurance. (167 Cal.App.2d at pp. 394-395.) Plaintiffs contend that the phrase "existence and extent of liability insurance" used in Laddon means more than just the contents of the policy. Instead, according to them, it also includes the petitioners' financial condition, which would provide a measure of the "true extent" of the Church's insurance coverage.
Plaintiffs' argument fails for two reasons. First, Laddon cannot be read as plaintiffs contend. At issue in Laddon was whether the plaintiff was entitled to discover the existence and policy limits of the defendant's policy, with the court using the terms "extent," "limits," and "policy limits" interchangeably. (167 Cal.App.2d at pp. 392-393, 395.) Thus, when Laddon spoke about the "extent" of insurance, it authorized discovery of no more than the coverage limits of a defendant's policy and is therefore consistent with section 2017(b). Second, even if Laddon can be interpreted as plaintiffs suggest, we cannot ignore the Legislature's plain language and choice of different phraseology when framing the reach of section 2017(b). (Jurcoane v. Superior Court (2001) 93 Cal.App.4th 886, 892-893 (Jurcoane) [our primary task is to give effect to the Legislature's intent. We first turn to the words themselves; if their meaning is clear and unambiguous and is not at odds with the face of the statute or its legislative history, then the plain language controls].) We therefore hold that section 2017(b) does not authorize the discovery of information related to the financial condition of a defendant's non-party insurer. (See In re Dana Corp. (Tex. 2004) 138 S.W.3d 298, 302 (Dana) [interpreting virtually identical Texas rule allowing discovery of the existence and contents of a defendant's liability policies; held that the statute could not be construed to include information concerning whether coverage had been eroded by other claims in order to facilitate settlement].)
Plaintiffs next contend that, at a minimum, section 2017(b) applies to reinsurance information because it specifically authorizes discovery of "any agreement under which any insurance carrier" may be liable to satisfy or reimburse a judgment. An understanding of the nature of reinsu
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