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Western Heritage Insurance Company v. Superior Court of the State of California For the County of Los

October 11, 2011

WESTERN HERITAGE INSURANCE COMPANY, PETITIONER,
v.
SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES, RESPONDENT; WILLIAM PARKS ET AL., REAL PARTIES IN INTEREST.



(Los Angeles County Super. Ct. No. BC413551) ORIGINAL PROCEEDINGS in mandate. Michael C. Solner, Judge. Granted and remanded with directions.

The opinion of the court was delivered by: Croskey, J.

CERTIFIED FOR PUBLICATION

In this case, the petitioner, Western Heritage Insurance Company (Western Heritage) provided a defense to its insured, a commercial provider of home healthcare services, in an action for damages resulting from an automobile accident. The claim arose from an accident in which the insured's employee drove in an allegedly negligent manner and the plaintiffs' decedent, her passenger, was injured. In addition to allegations that the insured's employee negligently caused the accident, it is also claimed that she failed to seek or obtain medical treatment for the decedent following the accident and he later died from his injuries. The claim against the insured was based on the allegation that the employee had been acting in the course and scope of her employment. Thus, the insured's alleged liability was vicarious in nature.

Western Heritage provided a defense to not only the insured, but also to the employee. It did so under a reservation of rights to dispute coverage under the general liability policy that it had previously issued to the insured. (See fn. 7, post.) During pre-trial proceedings, the employee failed to provide verified discovery responses or appear for her deposition, all in violation of the trial court's orders. At this point, it was disclosed that Western Heritage had filed an answer on the employee's behalf without having been in contact with her. As a result, her answer was stricken and her default was entered. Western Heritage, in order to protect its own interests, timely moved to intervene in the action. The trial court granted that motion but, at the request of the plaintiffs, subsequently ordered that Western Heritage could only dispute damages, not the liability of the employee.*fn1

Western Heritage filed a petition for a writ of mandate. We issued an order to show cause and a stay of further trial court proceedings. After a review of the record and the relevant case law, we have concluded that the trial court's order was erroneous. Western Heritage, as an intervenor, has the right to assert, on its own behalf, all defenses that otherwise would be available to the insured parties whether as to liability or damages. We will therefore grant the requested writ relief.

FACTUAL AND PROCEDURAL BACKGROUND*fn2

This action was filed on May 11, 2009 by the plaintiffs (and real parties in interest herein), William Parks and Paula Parks (the Parks) and the Estate of George Brooks Parks (decedent).*fn3 The Parks are the adult children of decedent who died following an automobile accident which occurred on September 23, 2008. The decedent had been a passenger in a vehicle being driven by Julia Reyes (Reyes) which, due at least in part to her alleged negligence, collided with another vehicle. At the time of the accident, Reyes was acting in the course and scope of her employment by Gratefull Home Care, Inc. (GHC). Both Reyes and GHC were named as defendants in plaintiffs' complaint.*fn4 Plaintiffs filed their third amended complaint on or about November 12, 2009 and alleged seven causes of action, including (1) vehicular negligence - wrongful death and (2) general negligence - negligent hiring - wrongful death.*fn5

1. Allegations of Plaintiffs Complaint

On or about August 31, 2007, GHC and decedent entered into a contract pursuant to which GHC agreed to provide decedent with home healthcare services. In order to induce the execution of the healthcare agreement, GHC had made certain representations to the Parks as to the quality of the healthcare services that would be provided to the decedent as well as to the competence of the caregiver employee who would be assigned by GHC to provide those services to decedent.

On September 23, 2008, such agreement was in full force and effect and Reyes was the assigned caregiver. At 4:45 p.m. on that date, Reyes was acting in the course and scope of her employment by GHC and was driving her own vehicle in which decedent was a passenger. At the intersection of Wilshire Boulevard and Stanley Avenue in the City of Los Angeles, Reyes was attempting to make a left turn when her vehicle was struck by the Castellon vehicle. The collision was due to the negligence of both Reyes and the driver of the Castellon vehicle.

After the accident, decedent, who suffered from dementia, complained of head pain. Reyes did not seek or obtain medical treatment for him, but simply took him home, gave him his dementia medication, and put him to bed. The next morning, decedent was found dead. The cause of death was a brain injury that decedent had suffered as a result of the accident.

In addition to the alleged negligence of Reyes in operating her vehicle and failing to obtain medical care, plaintiffs also allege that GHC had represented that Reyes was an experienced and competent caregiver and that she had cleared a background check. Such representations were false and, in fact, GHC (1) had not even required Reyes to fill out an application for her employment as a caregiver, (2) had never verified her experience, (3) had never determined her level of competence and (4) had never completed a background check on her.*fn6

2. Western Heritage Provides a Defense

Western Heritage had issued a one-year general liability policy to GHC on January 26, 2008, which policy was in effect on the date of the accident. The defense of this action was tendered to Western Heritage on or about May 14, 2009, and the insurer agreed to provide a defense to both GHC and Reyes subject to a reservation of rights.*fn7 In discharge of such defense responsibility, Western Heritage retained counsel to represent GHC and Reyes. An answer to plaintiffs' complaint was timely filed on behalf of both.

3. Reyes's Default is Entered

Subsequent to the filing of Reyes's answer, plaintiffs made requests for discovery from Reyes. In addition, they noticed her deposition. Despite multiple court orders requiring her to do so, Reyes failed to provide verified responses to such discovery requests and failed to appear for her deposition.*fn8 On April 7, 2010, pursuant to the request of plaintiffs, Reyes's answer was stricken and her default was entered by the trial court clerk. However, no default judgment was ever requested or entered.

4. Western Heritage Is Permitted to Intervene

On June 14, 2010, Western Heritage filed an ex parte motion seeking leave to file a complaint in intervention in order to protect its own interests in light of the striking of Reyes's answer and the entering of her default. Western Heritage claimed that it had a direct and immediate interest in the litigation and its ultimate outcome in light of the provisions of Insurance Code, section 11580, subdivision (b)(2).*fn9 It expressly sought leave to intervene in order to dispute "the issues of liability ...


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