Guideone Mutual Insurance v. Utica National Insurance
213 Cal. App. 4th 1494
Cal. Ct. App.2013Background
- Jester settled for $4.5 million after West’s accident; GuideOne paid $2 million total (one primary $1M + $1M umbrella) and Utica paid $2.4 million total ($1M primary + $1.4M umbrella).
- Jester action involved Crosswinds/CEA as employers and West as employee; West’s vehicle was West’s car used in business.
- State Farm paid $100,000 (driver’s policy) and remaining $4.4 million was paid by GuideOne and Utica through primary and umbrella policies.
- GuideOne sought equitable contribution from Utica for alleged overpayments; trial court granted $600,000 based on proportional sharing of umbrella-level excess coverage.
- Utica appealed, arguing that because CEA is only vicariously liable, Utica’s umbrella policy should not share pro rata with GuideOne’s umbrella policy; the lower court’s ordering of $600,000 contribution was error.
- The reviewing court reversed the judgment, holding that GuideOne and Utica umbrella coverage must be exhausted only after the driver’s primary and other applicable policies are exhausted, and that prejudgment interest tied to the reversed judgment must also be reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Allocation of excess policies under 11580.9(d) | GuideOne: driver’s policy primary; excess policies prorate. | Utica: driver/employee policy exhausted first; employer’s policy not pro rata. | Utica’s position adopted; guideOne and Utica policies both excess to State Farm and must exhaust before employer umbrella contributes. |
| Whether GuideOne can recover $600,000 from Utica’s umbrella | GuideOne entitled to pro rata contribution. | Utica not liable until driver’s and employer’s policies exhausted; umbrella not sharing. | Judgment reversed; no $600,000 contribution from Utica. |
| Prejudgment interest on reversed judgment | Interest based on the $600,000 judgment should stand. | If judgment reversed, prejudgment interest must also be reversed. | Reversed along with judgment; prejudgment interest reversed. |
Key Cases Cited
- United States Fire Ins. Co. v. National Union Fire Ins. Co., 107 Cal.App.3d 456 (Cal. App. 1980) (primary-vs-employer liability when nonowned coverage involved)
- Hartford Accident & Indemnity Co. v. Sequoia Ins. Co., 211 Cal.App.3d 1285 (Cal. App. 1989) (driver coverage primary to employer coverage in excess analysis)
- Continental Cas. Co. v. Phoenix Constr. Co., 46 Cal.2d 423 (Cal. 1956) (employer-vs-employee indemnity framework for liability allocation)
- CSE Ins. Group v. Northbrook Property & Casualty Co., 23 Cal.App.4th 1839 (Cal. App. 1994) (statutory allocation gaps; guide to excess allocation among multiple policies)