Opinion
BARRY-DEAL, J.
This appeal raises important issues regarding the extent of the responsibility of insurance carriers to provide their insured with a defense. Seaboard Surety Company (Seaboard), Insurance Company of North America (INA), and Pacific Indemnity Company (Pacific) (collectively appellants) appeal from a judgment ordering them under principles of equitable contribution to pay respondent and cross-appellant CNA Casualty of California (CNA) a portion of the legal expenses incurred by CNA in defending a lawsuit against their insured, Western States Bankcard Association (WSBA). We affirm the judgment.
Appellants argue that their insurance policies could not be construed to provide coverage for any of the causes of action alleged in the underlying antitrust complaint against WSBA, WSBA had no reasonable expectation of coverage under any of the subject policies, and they therefore had no duty to defend WSBA; that particular limitations and exclusions on the policies entitled appellants to refuse to defend WSBA; and that WSBA’s failure to disclose the underlying claims at the time it took out the subject insurance policies exonerated appellants from any obligation to defend WSBA and barred CNA, as subrogee, from obtaining any contribution for that defense. In addition, Pacific contends that the evidence failed to establish that it had issued an insurance policy of the kind found by the trial court; that it was absolved from any duty to defend WSBA both by CNA’s failure to tender a formal demand that Pacific share in that defense and by WSBA’s failure to notify Pacific of threats of litigation occurring after issuance of Pacific’s policy; and that CNA was not entitled to any defense costs incurred after the trial below.
CNA has cross-appealed from the judgment, contending that the trial court’s method of apportioning the parties’ individual contributions to the costs of defense was not equitable, and that CNA itself was entitled to *604 receive its own attorneys’ fees incurred in this action for equitable contribution.
I
In 1966, a number of major California banks formed WSBA to act as the regional clearinghouse for the Master Charge credit card system. Beginning in 1966 and continuing through 1977, Marsh & McLellan, Inc., insurance brokers, obtained for WSBA an extensive insurance program involving several insurance policies issued by a number of insurance companies. Among these insurance companies were appellants. The comprehensive general liability insurance policy of Pacific covered the period from 1966 to 1969; that of INA was for the period from 1969 to 1975; and CNA picked up the coverage in 1975. The Seaboard policy, which had a somewhat different focus of coverage, ran concurrently with the others from January 1967 to October 1977.
On March 21, 1977, Electronic Currency Corporation and Melvin Salve-son filed suit in federal district court against WSBA, alleging an antitrust cause of action for violation of the Sherman and Clayton Acts and a second cause of action for intentional interference with contractual relationships (Electronic Currency Corporation et al. v. Western States Bankcard Association et al. (N.D.Cal.) No. C-772077-SW [the Salveson lawsuit]). An amended complaint was filed on March 3, 1978. On May 24, 1978, the federal district judge dismissed the pendent second cause of action for lack of federal subject matter jurisdiction.
WSBA tendered the defense of the amended complaint to INA, Pacific, and CNA on July .10, 1978, and to Seaboard on October 2, 1978. INA, Seaboard and Pacific declined to undertake WSBA’s defense. CNA, however, accepted the tender of defense. CNA incurred a major portion of defense costs, amounting to nearly $150,000 as of October 15, 1979. It then filed the present declaratory relief action on December 18, 1979, seeking contribution from appellants for the costs incurred in defending WSBA in the federal action.
On May 7, 1981, the federal court granted summary judgment for WSBA on the remaining antitrust cause of action in the Salveson lawsuit. Two months later, in July 1981, the instant action came to trial. On December 30, 1982, the trial court filed a statement of decision finding that appellants all had a duty to defend WSBA in the Salveson lawsuit; and it entered judgment ordering appellants to reimburse CNA for its post-tender costs of *605 defense in the ratio that appellants’ separate policy limits bear to the total limits of all four policies.
II
All the appellants join in arguing that the Salveson lawsuit against WSBA was purely a federal antitrust action, that their respective insurance policies do not provide coverage for such an action, and that they therefore had no duty to defend WSBA. We disagree.
The duty to defend is much broader than the duty to indemnify. An insurer’s duty to defend must be analyzed and determined on the basis of any
potential
liability arising from facts available to the insurer from the complaint or other sources available to it at the time of the tender of defense. If the insurer is obliged to take up the defense of its insured, it must do so as soon as possible, both to protect the interests of the insured, and to limit its own exposure to loss. Unlike the duty to indemnify, which is only determined after liability is finally established, the duty to defend must be assessed at the outset of the case.
(Gray
v.
Zurich Insurance Co.
(1966)
*606
The insurer’s obligation to defend is not dependent on the facts contained in the complaint alone; the insurer must furnish a defense when it learns of facts from
any
source that create the potential of liability under its policy.
(Gray
v.
Zurich Insurance Co., supra,
65 Cal.2d at pp. 275-277;
Giddings
v.
Industrial Indemnity Co.
(1980)
In the seminal 1966 case of
Gray
v.
Zurich Insurance Co., supra,
Looking to the facts alleged in the Salveson complaint rather than the formal theory of liability or cause of action pleaded, and bearing in mind that where there is doubt as to whether the duty to defend exists, the doubt must be resolved in favor of the insured
(Eichler Homes, Inc.
v.
Underwriters at Lloyd’s, London, supra,
The amended Salveson complaint was filed on March 3, 1978. Although it stated two causes of action, the second, for “intentional interference” with contractual and business relationships, was dismissed for lack of federal subject matter jurisdiction before WSBA tendered the defense of the lawsuit to appellants in July 1978. The remaining cause of action was entitled “antitrust.” Appellants focus on this fact, and on the federal judge’s *608 ultimate ruling that the entire Salveson lawsuit was barred by the federal antitrust statute of limitations, in arguing that they had no duty to defend WSBA from an antitrust action which was not within the coverage of their policies. However, the first cause of action of the amended Salveson complaint also contained specific factual allegations in subparagraphs (i), (m), (o) and (q) of paragraph 21 which cannot so easily be discounted. 3
Subparagraphs 21 (i) and (o) charged that WSBA misappropriated, stole and misused property interests and trade secrets and made misrepresentations to the Salveson plaintiffs “in an effort to further eliminate the competition of plaintiffs.” These charges are arguably within Seaboard’s coverage for piracy, unfair competition and idea misappropriation, particularly since these terms are undefined in Seaboard’s policy, and must therefore be construed against the insurance carrier.
(Insurance Co. of North America
v.
Sam Harris Constr. Co.
(1978)
Ill
Appellants contend that the federal court’s dismissal of the Salveson complaint’s second cause of action for intentional interference with contractual and business relationships on grounds of lack of federal subject matter jurisdiction, and subsequent dismissal of the remainder of the action on grounds of the antitrust statute of limitations, have collaterally estopped or otherwise barred CNA from asserting that the Salveson lawsuit sounded in anything but antitrust, contained potential common law tort claims covered by appellants’ policies, or could be amended to allege any such causes of action. The contention is without merit.
The federal court’s dismissal of the Salveson lawsuit’s second cause of action in May 1978, prior to the tender of the defense to appellants, had no effect on appellants’ duty to defend for several reasons. First, the alleged facts which triggered appellants’ obligation to defend were contained within the first cause of action itself. It makes no difference that for strategic adversarial reasons this cause of action was labelled “antitrust”; as established by Gray v. Zurich Insurance Co., supra, 65 Cal.2d at pages 275-277, it is not the form or title of a cause of action that determines the carrier’s duty to defend, but the potential liability suggested by the facts alleged or otherwise available to the insurer. Since this potential liability was apparent from the allegations of the first cause of action in the complaint presented to appellants, it was immaterial that the second cause of action had already been dismissed.
*610 Second, none of the appellants conducted any investigation into the allegations of the Salveson lawsuit after the tender of defense. “[B]efore an insurer may rightfully reject a tender of defense, it must investigate and evaluate the facts expressed or implied in the third party complaint as well as those which it learns from its insured and any other sources [citation].” (Fresno Economy Import Used Cars, Inc. v. United States Fid. & Guar. Co., supra, 76 Cal.App.3d at pp. 278-279; see also Mullen v. Glens Falls Ins. Co., supra, 73 Cal.App.3d at pp. 173-174.) Having utterly failed to investigate their potential liability despite the facts alleged on the Salveson complaint giving rise to that potential, appellants were barred from denying their insured the tendered defense. 5
Third, contrary to appellants’ speculative assertion, at the time of tender appellants had no grounds for concluding that the Salveson lawsuit was “incapable of amendment” to set forth explicit causes of action for malicious prosecution, libel, slander, defamation, disparagement, trade “piracy,” unfair competition, or idea misappropriation. Appellants’ argument that the federal judge would not have permitted any amendments is primarily based on hindsight, in light of the ultimate dismissal of the Salveson lawsuit under the antitrust statute of limitations. The duty to defend cannot be adjudged on the basis of hindsight. It must be determined from the facts and inferences known to an insurer from the pleadings, available information and its own investigations at the time of the tender of defense. (Gray v. Zurich Insurance Co., supra, 65 Cal.2d at pp. 271-272, 275-277; Fresno Economy Import Used Cars, Inc. v. United States Fid. & Guar. Co., supra, 16 Cal.App.3d at pp. 278-279; Mullen v. Glens Falls Ins. Co., supra, 73 Cal.App.3d at pp. 173-174.) 6
*611
At the time of tender, despite the federal court’s dismissal of the pendent second cause of action, the possibility that the complaint could still be amended had not been precluded. Federal antitrust complaints are frequently amended to include causes of action for defamation, malicious prosecution, trade disparagement, unfair competition or idea misappropriation.
(Mayview Corp.
v.
Rodstein
(9th Cir. 1980)
The instant case is remarkably similar to the recent New York case of
Ruder & Finn
v.
Seaboard Sur.
(1981)
We find this reasoning persuasive. Indeed, the Salveson complaint made far more specific factual allegations potentially covered by the insurance policies at issue here than the “two words” in the underlying complaint in Ruder & Finn. We therefore hold that the trial court did not err in finding that the Salveson complaint alleged facts which gave rise to potential liability covered by the policies of all three appellants, and that appellants therefore owed a duty to defend their insured, WSBA.
*613 IV
Appellants argue that certain limitations and exclusions in their respective policies entitle them to refuse to defend WSBA in the Salveson action. We disagree.
First, INA points to an exclusion in its policy stating that it does not apply to personal injury arising out of a defamatory or disparaging publication or utterance, “if the first injurious publication or utterance of the same or similar material by or on behalf of the Named Insured [WSBA] was made prior to the effective date of this insurance . . . .” INA contends that because the Salveson lawsuit alleges that WSBA’s illegal and tortious activities began “at a time unknown to plaintiffs but at least as early as 1966,” and because the effective date of INA’s coverage was in November 1969, any claim set forth in the complaint potentially within its libel, slander, or “other defamatory or disparaging material” provisions is excluded.
However, the Salveson complaint merely alleges that WSBA’s entire course of conduct commenced “as early as 1966.” It then proceeds to list a series of alleged wrongful acts committed by WSBA in 18 paragraphs, without indicating exactly when any of these specific acts occurred. The trial court below correctly concluded that “it was unclear whether the Salve-son action would prove that WSBA made disparaging misrepresentations prior to the 1969 effective date of the INA coverage. The spirit of
Gray
[v.
Zurich Insurance Co., supra,
Seaboard argues that it was entitled to refuse WSBA’s tender of defense because its policy was limited to coverage of enumerated wrongful acts “committed or alleged to have been committed in any advertisement, publicity article, broadcast or telecast and arising out of the Insured’s advertising activities.” The term “advertising” is not defined in Seaboard’s policy, and therefore must be construed strictly against the carrier.
(Insurance Co. of North America
v.
Sam Harris Constr. Co., supra,
22 Cal. 3d at pp. 412-413.) Even if we accept Seaboard’s definition of “advertising” as “‘the action of calling something ... to the attention of the public especially by means of printed or broadcast paid announcements . . it is clear that the factual allegations in the Salveson complaint referred at least potentially to misrepresentations, defamations and disparagements made to the public. Part of WSBA’s function was to serve as the advertising arm of its member banks, and the entire question of the use or misuse of the Mastercard “service mark” was central to the Salveson lawsuit. Once again, the duty to
*614
defend is broader than the duty to indemnify, and Seaboard was obligated to defend WSBA because the allegations of the Salveson lawsuit created at least the potential of liability covered by Seaboard’s policy, even though that policy was limited to advertising.
(Miller
v.
Elite Ins. Co.
(1980)
Seaboard also urges that the claims made in the Salveson complaint were specifically barred by an exclusion in its policy excluding coverage for “any claim or suit based upon or arising out of alleged false, misleading, deceptive, fraudulent or misrepresenting advertising or to any claim or suit for unfair competition based thereon ....’’ However, this exclusion is ambiguous on its face. It would appear to exclude coverage for virtually any claim made under the Seaboard policy, which purports to provide indemnification for damages resulting from libel, slander, defamation, piracy, unfair competition or idea misappropriation committed or alleged to have been committed in an advertising context. Any ambiguity in an exclusionary clause will be strictly interpreted against the insurer, and reasonable doubts as to uncertain language must be resolved in favor of the insured.
(Crane
v.
State Farm Fire & Cas. Co.
(1971)
V
All three appellants argue that WSBA concealed material facts concerning the history of Salveson’s dispute with the banks who were members of *615 WSBA, and that CNA, as WSBA’s subrogee, is therefore estopped under the Insurance Code from claiming any coverage under appellants’ policies, including any duty to defend. 9
We have some doubt as to whether CNA, as the sole insurance company which recognized its obligation to defend WSBA and which consequently incurred all the cost of defense, can be saddled with all the defenses appellants may have against WSBA itself.
(Clemmer
v.
Hartford Insurance Co.
(1978)
The issue of whether WSBA committed a “material concealment” under the Insurance Code is a question of fact to be decided by the trial court on the basis of the evidence.
(Horn
v.
Guaranty Chevrolet Motors
(1969)
Here, the trial court’s finding that respondents failed to establish material concealment by WSBA is supported by substantial evidence that was of “ ‘ponderable legal significance,’ ” “ ‘reasonable in nature, credible, and of solid value . . . .’”
(United Professional Planning, Inc.
v.
Superior Court
(1970)
VI
. We now turn to the arguments raised by Pacific alone. It contends that CNA “failed to establish” that Pacific had issued a personal injury liability policy to WSBA, and that the trial court erred in so finding. Once again, despite Pacific’s strained attempts to characterize it otherwise, this argument is actually a challenge to the sufficiency of the evidence. Indeed, Pacific concedes that the evidence on this issue was “conflicting”; however, it insists that the real issue is the burden of proof.
That “issue” is completely immaterial, since the trial court’s finding that Pacific did issue such a policy is supported by substantial evidence. For the most part, this evidence consisted of the testimony of Mr. David Cuddeback, the account executive with Marsh & McLennan who obtained the insurance for WSBA in 1966. Cuddeback testified on the basis of his personal knowledge that the INA form of personal injury endorsement was the standard form used in the insurance industry, and that Pacific uséd that form. Pacific’s own witness, Francis Culhane, agreed that there was a standard form of personal injury endorsement used in the industry and that
*617
Pacific used that standard form. This evidence alone was substantial and sufficient to support the trial court’s findings on this issue.
(Campbell
v.
Southern Pacific Co., supra,
VII
Next, Pacific contends that it was absolved from its responsibility to defend because WSBA failed to give it prompt notice of Salveson’s claims after issuance of the policy, and because CNA failed to tender a formal demand for a defense prior to incurring litigation expense in defending the Salveson lawsuit. These contentions are without merit.
The evidence in the record supports the trial court’s finding that Pacific had adequate notice of potential liability to prevent any substantial prejudice to its interests, and that CNA should therefore not be estopped from seeking reimbursement. At WSBA’s request, Marsh & McLennan notified Pacific in July 1978 of the Salveson lawsuit and WSBA’s tender of the defense thereof. Pacific promptly denied the tender on the grounds that its policy provided no coverage. It was clearly not prejudiced by any subsequent failure on CNA’s part to make a formal demand to share in the defense.
Pacific also asserts that it was relieved from its obligation to defend by WSBA’s failure to inform it of certain threats made by Salveson after issuance of Pacific’s policy, just before the settlement agreement of March 1967. “ ‘The law is established that where an insurance company denies liability under a policy which it has issued, it waives any claim that the notice provisions of the policy have not been complied with.’ [Citation.]”
(Lagomarsino
v.
San Jose etc. Title Ins. Co.
(1960)
VIII
Pacific’s final contention is that the trial court erred in awarding CNA its defense costs incurred after trial below in July 1981. By that time, appellants had acquired actual knowledge of the dismissal of the second cause of action of the Salveson complaint (the “intentional interference” cause of action), and of the granting of the motion for summary judgment as to the remainder of the Salveson lawsuit in February 1981 on statute of limitations grounds. Pacific argues that as a result of these actions by the court, any *618 duty to defend WSBA ended and CNA could have no rights to reimbursement for defense costs thereafter.
Pacific raises this contention for the first time on appeal.
10
As a general rule, issues not properly raised at trial will not be considered on appeal. (9 Witkin, Cal. Procedure,
supra,
Appeal, § 311, pp. 321-322.) An appellate court may in its discretion consider an issue not properly raised in the trial court if the issue presents a pure question of law on undisputed evidence regarding either a noncurable defect of substance, such as lack of jurisdiction or complete failure to state a cause of action, or a matter affecting the public interest or the due administration of justice.
(Wilson
v.
Lewis
(1980)
IX
We now turn to CNA’s cross-appeal. CNA raises two issues: first, whether the trial court’s apportionment of the costs of WSBA’s defense among *619 the four insurers was equitable; and second, whether CNA was entitled to receive its own attorneys’ fees in bringing the instant action.
A
All the insurers before this court were jointly responsible for defending WSBA in the Salveson lawsuit.
(Continental Cas. Co.
v.
Zurich Ins. Co.
(1961)
Here, the trial court apportioned the costs of defense among the four insurers on the basis of the relative limits of coverage set by their respective policies. Thus, because CNA, INA and Pacific each had policy limits of $300,000, while Seaboard’s policy limits were only $100,000, the court determined that CNA, INA and Pacific would each be responsible for 30 percent of the cost of defense and Seaboard would be responsible for 10 percent.
CNA argues that this method of allocation employed by the trial court was inadequate. It contends that simple, allocation of the costs of defense by relative policy limits does not equitably take into account the fact that the policies of the four insurers were both concurrent and consecutive and covered entirely different periods of time, while the risk of liability itself, measured by the terms of the underlying complaint, was not.limited to specific times and dates but instead was continuous over a broad time span from 1966 through 1978.
CNA urges that in this case, the most equitable method of allocating defense costs is to multiply the number of years of coverage of each insurance policy, or any fraction thereof, by the per year aggregate liability limits stated in that policy, and then to compare the resulting product for each insurer against the total coverage available to WSBA in order to determine that insurer’s pro rata percentage share of the defense costs. As set forth in CNA’s brief on its cross-appeal, the approximate pro rata percentage shares *620 of defense costs calculated in this way are: Pacific, 20.7 percent; INA, 42 percent; CNA, 12.6 percent, and Seaboard, 24.7 percent.
The trial court below concluded that the method of allocating defense costs among the contributing insurers suggested by CNA was not supported by California case law. We agree by virtue of the numerous appellate decisions supporting the trial court’s procedure of prorating defense costs, and the complete absence of any California cases adopting CNA’s proposed approach. It is an accepted principle of California law that “[w]here two insurers cover the same risk, defense costs must also be shared between them pro rata in proportion to the respective coverage afforded by them to the insured. [Citation.]”
(Continental Ins. Co.
v.
Morgan, Olmstead, Kennedy & Gardner, Inc.
(1978)
CNA argues, however, that these decisions do not stand for a particular method of allocation to be used in every case. It points out that recent decisions have repeatedly emphasized the contrary principle in these cases that there is
no
definitive rule universally applicable in all situations; instead, courts must apply equitable considerations in allocating defense costs on a case-by-case basis.
(Signal Companies, Inc.
v.
Harbor Ins. Co., supra,
B
We are not persuaded by CNA’s final argument that it was entitled to receive its attorneys’ fees incurred in bringing the instant action. CNA argues that since it was equitably subrogated to the rights of WSBA, it *621 should recover its attorneys’ fees just as WSBA assertedly would have had the latter sued INA, Seaboard and Pacific for breach of the covenant of good faith and fair dealing.
On its face, this contention is based entirely on hypotheticals with no foundation in fact. WSBA did not assert any claim against INA, Seaboard and Pacific arising out of the underlying Salveson lawsuit. WSBA is not even a party to this action. The defense costs at issue here were those incurred on WSBA’s behalf in the Salveson lawsuit; WSBA has suffered no loss in this case. There was no finding that any of the insurers breached the covenant of good faith and fair dealing with WSBA or that their conduct in this matter was tortious; nor was this an issue here. CNA itself has no contractual relationship with the other insurers and thus no standing to assert a breach of the covenant of good faith and fair dealing in its own right. Thus, CNA has no standing to recover its attorneys’ fees in this action. 12
The judgment is affirmed. Respondent and cross-appellant CNA is awarded its costs on appeal.
Scott, Acting, P. J., and Merrill, J., concurred.
Petitions for a rehearing were denied February 13, 1986, and the petitions of defendants and appellants for review by the Supreme Court were denied April 17, 1986.
Notes
“The duty to defend is, of course, broader than the duty to indemnify. [Citation.] Where there is doubt as to whether the duty to defend exists, the doubt should be resolved in favor of the insured and against the insurer. [Citations.]”
(Eichler Homes, Inc.
v.
Underwriters at Lloyd’s, London
(1965)
The Supreme Court’s decision in
Gray
is based on the additional, alternative grounds that the insurer bore an obligation to defend because the language of the policy led the insured reasonably to expect such a defense, and that an exclusionary clause in the policy purporting to bar defense coverage of claims such as those alleged in the complaint was ambiguous and not sufficiently conspicuous, plain and clear. Appellants attempt to distinguish
Gray,
arguing that there is no exclusionary clause at issue in this case, that the prin
*607
ciple of adhesion contracts is not applicable because of the greater bargaining equality of the parties here, and that WSBA had no “reasonable expectation” of coverage for the defense of the Salveson lawsuit under the policies at issue. We need not address these contentions, however, because we find that
Gray
is controlling here on the basis of its alternative ground that the insurer’s duty to defend arises whenever the insurer ascertains facts which give rise to the
potential
of liability under the policy.
(Mullen
v.
Glens Falls Ins. Co., supra,
The relevant factual allegations of the Salveson amended complaint are as follows: “[Djefendants have done the following acts among others: . . .
. “(i) Knowingly misappropriated, stole and misused property interests and trade secrets of plaintiffs respecting their general purpose commercial transaction card systems. . . .
“(m) Intentionally issued and caused the issuance of statements misrepresenting the business, property and rights possessed by plaintiffs to persons with whom plaintiffs did business in an effort to disrupt and prevent the relationships and reasonably anticipated relationships between plaintiffs and said persons. . . .
“(o) . . . [M]ade intentional misrepresentations of fact to plaintiffs in an effort to further eliminate the competition of plaintiffs and for the express purpose of fraudulently delaying and obstructing plaintiffs’ access to legal remedy. . . .
“(q) Agreed to file and caused the filing of false, frivolous and sham counterclaims in this action for the purpose of punishing plaintiffs and further securing and maintaining the monopoly position now enjoyed by defendants in the general purpose commercial transaction card business. . . .”
INA argues that this allegation in the Salveson complaint regarding “false, frivolous and sham counterclaims” could not possibly be covered by the malicious prosecution provision in its policy, because any cause of action for malicious prosecution requires a prior termination of the earlier proceeding in favor of the party alleging malicious prosecution. However, when presented with a tender of a defense, it is not the insurer’s place to analyze and evaluate the underlying claim of liability in order to-reject the defense of any claim that is not meritorious. To the contrary, INA’s own policy provides that it shall have the “duty to defend any suit against the Insured seeking damages on account of such . . . injury [including injury arising out of a malicious prosecution] even if any of the allegations of the suit are groundless, false or fraudulent ....’’ (Italics added.) The fact that INA may have known of a good defense, even an ironclad one, to the malicious prosecution claim did not relieve it of its obligation to defend its insured.
Pacific argues, at some length, that WSBA violated its duty of good faith and fair dealing by failing to inform appellants of the dismissal of the pendent second cause of action for “intentional interference, ” and that CNA is therefore estopped, as subrogee, from arguing that the carriers should have investigated the Salveson lawsuit to ascertain if it was covered by their policies. The contention is meritless. As seen, any such failure on the part of WSBA could have had no prejudicial effect on appellants because the allegations giving rise to the potential liability under appellants’ policies were all contained in the undismissed first cause of action tendered to them. The dismissal of the “intentional interference” cause of action simply had no effect on the potential liability arising from the rest of the Salveson complaint, and was therefore ultimately immaterial to the question of appellants’ defense obligation.
The case of
California Union Ins. Co.
v.
Club Aquarius, Inc.
(1980)
“It is a well-established legal principle that the duty of an insurer to defend is broader than its duty to pay [citation]. The duty to defend arises whenever the allegations in the complaint fall within the risk covered by the policy. It therefore includes the defense of those actions in which alternative grounds are asserted, even if some are without the protection purchased. Further, a policy protects against poorly or incompletely pleaded cases as well as those artfully drafted. Thus the question is not whether the complaint can withstand a motion to dismiss for failure to state a cause of action. Nor is the insured’s ultimate liability a consideration. If, liberally construed, the claim is within the embrace of the policy, the insurer must come forward to defend its insured no matter how groundless, false or baseless the suit may be [citations]. . . . [K] . . . While in [the federal] case the complaint’s first cause of action was couched in terms of restraint of trade, it went on to allege that those whom it had joined as defendants were engaged in ‘false disparagement’. . . . These facts, though found deficient to sustain the Federal antitrust claim, painted a picture which, had it been established, conceivably could have subjected defendant’s insured and its codefendants to liability for commercial disparagement. Albeit the policy speaks in terms of ‘defamation’ rather than ‘disparagement’, we find the tort to which it refers within the scope of the insuring clause’s protection. The conceptual similarities between these torts, the semantic sameness which laymen might ascribe to them (compare ‘defamation’ with ‘disparagement’ as defined in Webster’s Third New International Dictionary) and, again, the rule of construction resolving ambiguities against the insurer all support this position. [([]... [T]he absence of an element of a properly pleaded cause of action is of no moment in determining Seaboard’s duty to defend. For that matter, neither did the fact that there was no colorable basis for Federal jurisdiction relieve Seaboard of its obligation. Rather, the latter merely provided the insurer with what in fact turned out to be a sure-fire defense in the Federal District Court.” (Ruder & Finn v. Seaboard Sur., supra, 52 N.Y.2d at pp. 669-670, 672 [439 N.Y.S.2d at pp. 861-863].)
Citing Insurance Code section 533 and Civil Code section 1668, which establish a public policy against insurance coverage or indemnification for liability for wilful tort, Seaboard argues that “[i]f the Salveson complaint, as tendered for defense, could by any stretch of the imagination come within the terms of the Seaboard advertiser’s liability policy, Seaboard would violate the public policy of this State if it undertook to defend or to indemnify the accused WSBA.” This precise argument was made by the insurer in
Gray
v.
Zurich Insurance Co., supra,
The following provisions of the Insurance Code are relevant: “Neglect to communicate that which a party knows, and ought to communicate, is concealment.” (Ins. Code, § 330.)
“Concealment, whether intentional or unintentional, entitles the injured party to rescind insurance.” (Ins. Code, § 331.)
“Each party to a contract of insurance shall communicate to the other, in good faith, all facts within his [or her] knowledge which are or which he [or she] believes to be material to the contract and as to which he [or she] makes no warranty, and which the other has not the means of ascertaining.” (Ins. Code, § 332.)
“Materiality is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due, in forming his [or her] estimate of the disadvantages of the proposed contract, or in making his [or her] inquiries.” (Ins. Code, § 334.)
In its reply brief, Pacific asserts in a footnote that it did raise this issue in a letter to the trial judge dated November 22, 1982. A copy of the letter is attached to the reply brief. Pacific states that it was “inexplicably” not included in the clerk’s transcript. Pacific owes this court more than this gratuitously empty excuse in explanation for its total failure to include in the record the only scrap of evidence indicating its objection to the trial court’s award of post-trial defense costs. Such references to matters outside the record on appeal are not reviewable or cognizable by this court and are not in compliance with the Rules of Court. (Cal. Rules of Court, rule 15(a); 9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, §§ 250, 475, pp. 256-257, 467-468.) In any event, the letter only professes to offer “observations” for the court’s “thoughtful consideration.” On its face, it makes no actual objection to the award of post-trial defense costs attacked for the first time on appeal. Such a letter hardly constitutes an appropriate or adequate method in which to raise an objection for the trial court’s consideration.
We note that despite the federal trial court’s grant of the motion for summary judgment with regard to the Salveson lawsuit in February 1981, the decision was appealed to the Ninth Circuit Court of Appeals and was still on appeal at the time of the trial in the instant case. The judgment at issue was filed and entered on December 30, 1982. The Ninth Circuit’s decision affirming the Salveson summary judgment was not filed until March 1983. Thus, for purposes of Pacific’s obligation to defend WSBA, the judgment in the Salveson lawsuit was not final at the time of the trial court’s award of defense expenses in this case. Under California law, the insurer’s duty to defend does not cease until the final determination of the underlying action on appeal.
(Fireman’s Fund Ins. Co.
v.
Chasson, supra,
Prior to
Brandt
v.
Superior Court
(1985)