Majority
Opinion
Plaintiff architects, as the assured under a certificate of errors and omissions insurance issued by Underwriters at Lloyd’s, London, have appealed from a judgment in favor of the underwriters in an action in which they sought to recover damages for breach of contract. The action followed tihe final determination and payment of $374,914.43, a sum in excess of the policy limits, in satisfaction of an owner’s claim for alleged breach of professional duty which had been made against the architects, and which had proceeded to arbitration at the instance of the underwriters, after the underwriters, with the knowledge and without objection from
In making settlement with their assured the underwriters deducted the sum of $38,252.14 for costs and expenses incurred by them in investigating the owner’s claim and in conducting the arbitration. The balance of the $250,000 sum insured was paid to the assured about a year after the dates of payment fixed in the arbitrators’ award, and shortly after the assured had paid the owner the full award of $354,680.81, together with interest in the sum of $20,233.62. The assured claim, first, that under the circumstances of this case the underwriters were not entitled to deduct the costs and expenses incurred by them from the principal amount of the policy, and, second, that they are entitled to recover the interest they had to pay on the arbitrators’ award because the underwriters failed to pay them the indemnity due under the policy at the time the award became payable. Collaterally they assert that they should have interest on the sum of $38,252.14 from the date it was due, insofar as it is not included in an award under their second claim.
It is concluded that in effecting settlement with the assured the underwriters improperly deducted from the sum insured and withheld from the assured, the amount of the costs and expenses incurred by the underwriters on their own behalf after rejecting the settlement offer, and that the underwriters properly refused to pay, in addition to the sum insured, interest which accrued on the sums awarded by the arbitrators from the time they were originally payable until the award was confirmed by final judgment of the superior court.
The facts found by the trial court are those set forth in the parties’ stipulation entitled “Submission of Controversy in Action on Agreed Statement of Facts and Issues.” The facts include those related above, and, with the policy provisions, will be referred to below where pertinent. The
1 In this action no claim was made that the underwriters were liable in excess of the policy limits because their determination to reject the owner’s settlement offer within the policy limits was made without consideration to the rights of the assured. (Cf. Crisci v. Security Ins. Co. (1967) 66 Cal.2d 425 , 429-432 [ 58 Cal.Rptr. 13 , 426 P.2d 173 ]; Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654 , 658-661 [ 253 P.2d 495 , 68 A.L.R;2d 883]; Ivy v. Pacific Automobile Ins. Co. (1958) 156 Cal.App.2d 652 , 659-660 [ 320 P.2d 140 ]; Brown v. Guarantee Ins. Co. (1957) 155 Cal.App.2d 679 , 682-689 [ 319 P.2d 69 ]; 14' Couch on Insurance (2d ed. Anderson, 1965) §§ 51:1-51:7, pp. 505-513; and Annotation, Duty of Liability Insurer to Settle or Compromise (1955) 40 A.L.R.2d 168 . Cf. Hodges v. Standard Acc. Ins. Co. (1961) 198 Cal.App.2d 564 , 574-575 [ 18 Cal.Rptr. 17 ].) The stipulated facts reflect that the portion of the plans and specifications which gave rise to the owner’s claim, were prepared by subcontractors for the assured, and that the subcontractors at all times insisted there was no error or omission in the plans so proposed.
The Expenses Incurred by the Underwriters
The assured assert that the obligation of the underwriters to defend against claims is separate and distinct from, and broader than, the obligation to indemnify the assured against claims. The authorities upon which they rely, however, are cases involving policies where the insurer undertook not only to indemnify the insured against the claim, demand, liability or loss, but also expressly undertook to defend the insured.[2] With one exception, those cases involve the question of whether the acknowledged duty to defend must be performed when it appears that the claim or liability asserted may be one which itself is excluded from or otherwise not covered by the insurance. Typical is the following statement from Karpe v. Great American Indem. Co. (1961) 190 Cal.App.2d 226 [ 11 Cal.Rptr. 908 ]: “The plaintiff seeks to recover not only upon the defendant’s covenant to indemnify against loss arising out of liability for damages, but also
2 These authorities are Gray v. Zurich Ins. Co. (1966) 65 Cal.2d 263 [ 54 Cal.Rptr. 104 , 419 P.2d 168 ] [“the company shall defend any suit against the insured”]; Fireman’s Fund Ins. Co. v. Chasson (1962) 207 Cal.App.2d 801 [ 24 Cal.Rptr. 726 ] [“defend any suit against the insured”]; Karpe v. Great American Indem. Co. (1961) 190 Cal.App.2d 226 [ 11 Cal.Rptr. 908 ] [covenant to defend]; Liberty Bldg. Co. v. Royal Indem. Co. (1960) 177 Cal.App.2d 583 [ 2 Cal.Rptr. 329 ] [“defend any suit against the insured”]; Firco, Inc. v. Fireman’s Fund Ins. Co. (1959) 173 Cal.App.2d 524 [ 343 P.2d 311 ] [“defend in the name of the assured”]: and Ford v. Providence Washington Ins. Co. (1957) 151 Cal.App.2d 431 [ 311 P.2d 930 ] [only concerned with insurer’s failure to defend a permissive user as it affected the insurer’s being bound by the implied finding that the permissive user was in fact driving]. See also Eichler Homes, Inc. v. Underwriters at Lloyd’s, London (1965) 238 Cal.App.2d 532 [ 47 Cal.Rptr. 843 ] [appellant agreed to defend]; Tulare County Power Co. v. Pacific Surety Co. (1919) 43 Cal.App. 315 [ 185 P. 399 ] [the indemnitor agreed that it “will defend such suit”]; and New Amsterdam Casualty Co. v. Cumberland Tel. & Tel. Co. (6th Cir. 1907) 152 F. 961 [“the company shall defend such suit”].
The certificate of insurance issued in this case “indemnifies the Assured against any claim, or claims, for breach of professional duty in their capacity as [“Architects”] which may be made against them during the period stated ... by reason of any negligent act, error or omission. . . .” It extends to such claims made against them by reason of the negligence of any employee or the negligence of any firm of architects or engineers employed to carry out work for which the assured may be legally liable.[3]
There is no express covenant in the certificate to defend any suit against the assured. The parties agree, however, that as a contract of indemnity (see Civ. Code, § 2772), the certificate should be interpreted in accordance with the rules laid down in section 2778 of the Civil Code.[4] The assured
3 The policy provides in part: “Now Therefore this Insurance, subject to the terms and conditions hereof, indemnifies the Assured against any claim or claims for breach of professional duty in their capacity as stated in the Schedule which may be made against them during the period stated in the said Schedule by reason of any negligent act, error or omission, whenever or wherever committed or alleged to have been committed, on the part of the Assured or any person who has been, is now, or may hereafter during the subsistence of this Insurance be employed by the Assured, in the conduct of any business conducted by or on behalf of the Assured in their professional capacity as stated in the Schedule, and, “This Insurance Also Indemnifies the Assured against any claim or claims for breach of professional duty which may be made against the Assured during the currency of this Insurance arising from any negligent act, error or omission committed by any Architect or firm of Architects or Engineer or firm of Engineers retained or employed by the Assured, and arising out of work carried out on behalf of the Assured and for which the Assured may be legally liable, . . .”
4 Civil Code section 2778 provides in pertinent part: “In the interpretation of a contract of indemnity, the following rules are to be applied, unless a contrary intention appears: “1. Upon an indemnity against liability, expressly, or in other equivalent terms, the person indemnified is entitled to recover upon becoming liable; “2. Upon an indemnity against claims, or demands, or damages, or costs, expressly, or in other equivalent terms, the person indemnified is not entitled to recover without payment thereof; “3. An indemnity against claims, or demands, or liability, expressly, or in other equivalent terms, embraces the costs of defense against such claims, demands, or liability incurred in good faith, and in the exercise of a reasonable discretion; “4. The person indemnifying is bound, on request of the person indemnified, to *331 defend actions or proceedings brought against the latter in respect to the matters embraced by the indemnity, but the person indemnified has the right to conduct such defenses, if he chooses to do so; . . .”
Reference to the terms of the policy fails to give a definitive answer to the question. The conditions of the policy[5] indicate several situations in which the costs and expenses of defense will be considered part of the principal sum insured, but contain no express reference to what should be done in the situation which the parties stipulated occurred in this case.
5 The pertinent conditions are as follows: “1. The liability of the Underwriters, hereunder shall not exceed in the aggregate for all claims under this Insurance in any one certificate year (which shall be understood to mean a period of one calendar year commencing each year on the day and hour named in the said Schedule) the sum stated in the said Schedule. 2, The measure of loss shall be such amounts as may be assessed against the Assured either by arbitration, adjudication, or as the result of a law suit, together with all costs of expenses incurred in connection therewith. 3. The Assured shall not admit liability for or settle any claim or incur any costs or expenses in connection therewith without the written consent of the Underwriters, who shall be entitled at any time to take over and conduct in the name of the assured the defense of any claim. Nevertheless, the Assured shall not be required to contest any legal proceedings unless a Lawyer (to be mutually agreed upon by the Assured and the Underwriters) shall advise that such proceedings should be contested. 4. The Undewriters shall not settle any claim without the consent of the Assured. If, however, the Assured shall refuse to consent to any settlement recommended by Underwriters and shall elect to contest or continue any legal proceedings in connection with such claim, then the Underwriters’ liability for the claim shall not exceed the amount for which the claim could have been so settled, together with the costs and expenses incurred with their consent up to the date of such refusal, provided always that Underwriters’ total liability under this Insurance shall not exceed the sum specified in the Schedule. . . .”
The assured assert with some justification that the claims referred to in condition “1” refer to claims which they as the assured make upon the underwriters for indemnity, and that such claims cannot include costs and expenses which were not either expended by the assured in their own defense, or incurred by the underwriters at the request or on behalf of the assured. “Insurance is a contract whereby one undertakes to indemnify another against loss, damage, or liability, arising from an unknown or contingent event.” (Civ. Code, § 2527.) “Indemnity is a contract by which one engages to save another from a legal consequence of the conduct of one of the parties, or of some other person.” (Civ. Code, § 2772.) In Somers v. United States Fid. & Guar. Co. (1923) 191 Cal. 542 [ 217 P. 746 ], the court quoted with approval, “ ‘Contracts of indemnity are distinguishable from those of guaranty and suretyship in that in indemnity contracts the engagement is to make good and save another from loss upon some obligation which he has incurred or is about to incur to a third person, and is not, as in guaranty and suretyship, a promise to one to whom another is answerable.’ (22 Cyc. 80.)” (191 Cal. at p. 547.) “The word ‘incurred,’ when used in connection with bills or expenses, means to become liable for and to have liability thrust upon one by act or operation of law. [Citations.]” (County of Kings v. Scott (1961) 190 Cal.App.2d 218 , 224 [ 11 Cal.Rptr. 893 ].) Attention must be directed to the other provisions of the policy to determine whether liability for the costs and expenses incurred by the underwriters was thrust upon the assured when the underwriters took over and conducted the defense of the claim, not at the request of the assured (cf. Civ. Code, § 2778, subd. 4), but apparently on their own initiative after rejecting a settlement offer within the sum insured, with the knowledge and consent of the assured.
Condition “3” (see fn. 5 above) precluded the assured from accepting the settlement offer without the written consent of the underwriters. It also indicates that the only costs and expenses for which the assured would be reimbursed were those incurred with the written consent of the underwriters. This clause contains the authority under which the underwriters
Condition “4” (id.) deals with the converse of the situation which arose in this case. If the assured refuse to join in a settlement recommended by the underwriters and elect to contest the claim the liability of the underwriters “shall not exceed the amount for which the claim could have been so settled, together with the costs and expenses incurred with their consent up to the date of such refusal, provided always that Underwriters’ total liability under this Insurance shall not exceed the sum specified in the Schedule.” The “costs and expenses” referred to in this clause are again costs and expenses incurred by the assured for which they may seek indemnity. No mention is made of such costs and expenses as may have been incurred by the underwriters in investigating the claim or conducting a defense or negotiations on their own behalf. Such costs and expenses would not be expenditures to which they would have to formally “consent.”
It is concluded that condition “2” is reasonably open to the interpretation that the measures of loss referred to therein only include “costs or expenses incurred in connection” with an arbitration conducted or other ■ proceedings taken by or bn behalf of the assured.[6]
This construction is sustained by “the general principal that doubts as to meaning must be resolved against the insurer. ...” (Gray v. Zurich Ins. Co. (1966) 65 Cal.2d 263 , 269 [ 54 Cal.Rptr. 104 , 419 P.2d 168 ]. See also Steven v. Fidelity & Casualty Co. (1962) 58 Cal.2d 862 , 875 [ 27 Cal.Rptr. 172 , 377 P.2d 284 ]; Continental Cas. Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423 , 437-438 [ 296 P.2d 801 , 57 A.L.R.2d 914 ]; Underwriters at Lloyd's of London v. Hunefeld (1964) 230 Cal.App.2d 31 , 38-39 [ 40 Cal.Rptr. 659 ]; and Hobson v. Mutual Benefit Health & Acc. Assn. (1950) 99 Cal.App.2d 330 , 333 [ 221 P.2d 761 ]; and Alberts v. American Cas. Co.
6 Condition “3” (see fn. 5 above) contemplates that the assured may be required to contest a legal proceeding when a lawyer, mutually agreed upon by the parties, shall advise that such proceedings should be contested. The stipulated facts recite: “Following receipt of said claim, negotations were carried on between Continental Insurance Company and the Underwriters toward the end of an amicable adjustment of the claim. During the course of said negotiations Continental Insurance Company offered to accept the sum of $105,349.00 in settlement thereof but said offer was rejected on behalf of the Underwriters with the knowledge and without objection from plaintiffs. . . . The negotiations above mentioned were not productive of a settlement and thereafter, pursuant to the provisions of paragraph 9 of Exhibit B hereto, arbitration was had with respect to said claim. The Underwriters assumed and exercised complete and exclusive control over the defense in said arbitration, including the selection and employment of attorneys and expert witnesses and expenditures for various other expenses incident to the arbitration.” In the absence of facts indicating compliance with the second paragraph of condition 3, no opinion is expressed as to the disposition that should be made of costs and expenses incurred after such compliance.
In Crisci v. Security Ins. Co. (1967) 66 Cal.2d 425 [ 58 Cal.Rptr. 13 , 426 P.2d 173 ], the court adverted to, but did not adopt (it being unnecessary for the determination of the case), a proposed rule that “whenever an insurer receives an offer to settle within the policy limits and rejects it, the insurer should be liable in every case for the amount of any final judgment whether or not within the policy limits.” (66 Cal.2d at p. 430.) The court observed, “. . . there is more than a small amount of elementary justice in a rule that would require that, in this situation where the insurer’s and insured’s interests necessarily conflict, the insurer, which may reap the benefits of the determination not to settle, should also suffer the detriments of its decision.” (Id. p. 431.)
In this case the assured have not sought to hold the underwriters responsible for all of the detriment flowing from their decision (cf. fn. 1 above). They only seek to avoid responsibility for the costs and expenses which the underwriters for all practical purposes expended in their own behalf. In New Amsterdam Cas. Co. v. Cumberland Tel. & Tel. Co. (6th Cir. 1907) 152 F. 961 , there was an express covenant to defend, in addition to the promise to insure the assured against its liability for damages (see fn. 2 above). Following a judgment in excess of the policy limits, the assured sued the casualty company and was awarded the full amount of the policy plus a pro rata share of the aggregate costs incurred, by both the assured and the company, as against the latter’s contention that there was only due the policy limit less the costs it actually incurred. Although the case is not'controlling, because of the express duty to defend, the reasons for the court’s decision are persuasive here. In concluding that the limitation of the company’s liability only applied to the liability for damages, and did not include the costs of performing the duty to defend, the court stated:
In Ecco-Phoenix Electric Corp. v. Howard J. White, Inc., supra, 1 Cal.3d 266 , the trial court awarded the defendant general contractor attorney’s fees pursuant to the provisions of a subcontract which provided, “Should litigation be necessary to enforce any term or provision of this agreement, then all litigation and court costs and reasonable attorney’s fees shall be borne wholly by the Sub-Contractor.” (1 Cal.3d at p. 272.) The plaintiff subcontractor recovered $11,000 on its $14,000 claim, and the defendant who had only admitted liability for $3,000 was awarded costs and attorney’s fees of $6,000. The Supreme Court refused to follow the literal interpretation given the clause by the court below. The court ruled, “To the extent that plaintiff was not responsible for necessitating the litigation, the clause was simply inapplicable and costs should have been awarded in accordance with settled standards, as if there had been no contractual provision in this regard. [Citation.]” (1 Cal.3d at p. 274.)
“In construing a contract the court . . . should avoid an interpretation which will make the contract unusual, extraordinary, harsh, unjust or inequitable [citations], or which would result in absurdity [citation] . . . .” (Harris v. Klure (1962) 205 Cal.App.2d 574 , 577-578 [ 23 Cal.Rptr. 313 ]. See also Jenné v. Jenné (1961) 192 Cal.App.2d 827 , 831 [ 13 Cal.Rptr. 897 ]; and Straus v. North Hollywood Hospital, Inc. (1957) 150 Cal.App.2d 306 , 311 [ 309 P.2d 541 ].) “ ‘A contract will not be so construed as to put one party at the mercy of the other’ . . .” (Hawley v. Orange County Flood etc. Dist. (1963) 211 Cal.App.2d 708 , 716 [ 27 Cal.Rptr. 478 ].)
It is noted that a learned treatise on the law of insurance states, “When the insurer has acted properly in refusing to compromise the action, the net
The trial court erred in allowing the insurer credit for the sum it expended on its own behalf for costs and expenses of investigating the owner’s claim and in defense of the arbitration.
Interest
The agreed statement of facts shows that on July 31, 1964 the board of arbitrators rendered a decision for the owners, which when carried out in accordance with its terms resulted in an award in the aggregate sum of $354,680.81, of which sum $327,000 bore interest at the rate of 7 percent per annum from September 1, 1964 and $27,680.81 bore interest at the rate of 7 percent per annum from October 14, 1964. Apparently the owners filed a petition to confirm the award (see Code Civ. Proc., § 1285 et seq.), and on June 24, 1965 a judgment was duly entered confirming the award and ordering judgment in favor of the owners and against the assured in the sum of $374,914.43, representing the principal sums awarded with interest from their respective due dates to date of judgment in the sums of $18,662.16 and $1,571.46, or total interest of $20,233.62. The assured were financially unable to satisfy the award or the judgment until they received payment from the underwriters of $211,747.86 on August 24, 1965. Thereafter, on September 17, 1965 the assured paid the full amount of the judgment (further interest being involved) to the owners in satisfaction of that judgment.
The underwriters support the judgment of the lower court, that the assured was not entitled to interest or damages, on several theories: first, that there was no obligation to pay under the terms of the policy until the assured had actually paid out the amount of the judgment (see Civ. Code, § 2778, subd. 2, fn. 4 above; J. Frank & Co. v. New Amsterdam Cas. Co. (1917) 175 Cal. 293 , 297 [ 165 P. 927 ]; San Pedro Properties, Inc. v. Sayre & Toso, Inc. (1962) 203 Cal.App.2d 750 , 756 [ 21 Cal.Rptr. 844 ]; Alberts v. American Cas. Co., supra, 88 Cal.App.2d 891 , 898; Tulare County Power Co. v. Pacific Surety Co., supra, 43 Cal.App. 315 , 325-327; Treloar v. Keil & Hannon, supra, 36 Cal.App. 159 , 161; Rodgers v. Pacific
The last contention goes beyond the scope of the agreed statement of facts. The record is silent concerning the reasons, or at whose instigation, the award was contested. Since after the award both the underwriters, to the full limits of the policy, and the assured, to the extent of at least $154,680, were subject to liability, it may be inferred, in the absence of any stipulated facts to the contrary, that the court proceedings were for the mutual benefit of both. There is nothing to indicate that the underwriters tendered the whole or any portion of the indemnity to either the assured, or to the owner who had secured the award, or that the assured tendered any portion of the award to the owner. In any event, it is clear that the award was not reduced to judgment until June 24, 1965, and that the underwriters did not pay any
7 In Alberts v. American Cas. Co., supra, the court observed, “There are two classes of contracts of indemnity. In one class the indemnitor engages to save the indemnitee from loss, meaning actual loss. In the other class the indemnitor engages to save the indemnitee from liability. In the first class the indemnitee must prove loss actually suffered by him. In a case of a loss by the indemnitee of money held as bailee the indemnitor’s liability for the loss does not arise until the debt has been paid and the indemnitee has thus suffered a loss. [Citations.] In the second class the indemnitee need not prove actual loss but only that he has become liable. The indemnitee may, without having paid anything, recover from the indemnitor as soon as liability is legally imposed. [Citations.]” (88 Cal.App.2d at pp. 898-900.)
8 In Tulare County Power Co. v. Pacific Surety Co., supra, the court stated, “The sum of the rule as to interest in such cases is this: That an assured who pays a judgment for the full amount limited in a liability policy indemnifying against actual loss, or a judgment for a smaller amount than such limited sum, can recover the sum with interest only from the time of such payment, but that interest accruing on the judgment pending an appeal therefrom is not an expense of defending the action.” (43 Cal.App. at p. 329.)
The assured claims that the underwriters were obligated to indemnify them by paying the award when it was calculated (see Civ. Code, § 2778, subd. 1, fn. 4 above; Alberts v. American Cas. Co., supra, 88 Cal.App.2d 891 , 898, fn. 7 above; and 11 and 15 Couch on Insurance, as set forth above fn. 7); and that their failure to do so constituted a breach of the contract which rendered the underwriters liable for, not only interest on the sum withheld, but all of the interest ultimately assessed against and paid by the assured (see Civ. Code, § 3300; Comunale v. Traders & General Ins. Co., supra, 50 Cal.2d 654 , 659; Hunt v. United Bank & Trust Co. (1930) 210 Cal. 108 , 116-117 [ 291 P. 184 ]; Walters v. American Ins. Co., supra, 185 Cal.App.2d 776 , 785 [ 8 Cal.Rptr. 655 ]; and Venturi v. Zurich General Acc. & Liab. Co. (1936) 14 Cal.App.2d 89 , 90 [ 57 P.2d 1002 ][9] ). This avenue of approach avoids the otherwise inevitable collision with the theories that interest on the award or judgment is not payable if not expressly covered by the policy, and that the underwriters cannot be called upon to indemnify the assured beyond the sum fixed in the policy.
It is unnecessary to unravel and resolve all of these complex issues. If the provisions of the certificate are construed, as contended by the assured, as “an indemnity against liability,” the assured were “entitled to recover upon becoming liable.” (Civ. Code, § 2778, subd. 1, see fn. 4 above.) The facts recited above do not show that either the assured or the underwriters acknowledged liability to the owners until the judgment confirming the award became final. It was the liability so established for which the underwriters agreed to indemnify the insured up to the sum insured. There was no breach of the contract except for the failure to pay the sum of $38,252.14 as indicated above. All interest which accrued on the obligation to the owners accrued prior to the time the ultimate liability was paid.
Despite the fact that there was no breach of the contract, the assured’s claim encompasses the theory that the underwriters should be liable, beyond the policy limits, for interest accruing during an unsuccessful appeal- or con
9 In Venturi v. Zurich General Acc. & Liab. Co., supra, the court stated, “The' cause of action rests on section 3300 of the Civil Code which declares that the measure of damages for the breach of an obligation arising from a contract is the amount which will compensate the party aggrieved for all the detriment proximately caused; thereby. Plaintiff’s cause of action is not controlled by section 3302 of the code, ás that section applies to contracts to pay money only to parties to the contract. Here the insurer contracted not only to reimburse the plaintiff for money actually paid out by the latter, but to protect and hold him harmless against loss arising out of his legal liability as owner of the automobile. This includes so many factors aside from .the direct payment of money that a breach cannot be compensated by the payment of the amount due with interest.” (14 Cal.App.2d at p. 90.)
The sum representing the costs and expenses was wrongfully withheld and should have been paid at or about the time the judgment became final, or in any event no later than September 17, 1965, when the assured paid the judgment. Since the underwriters construed the policy as requiring payment when the liability of the assured was established by final judg
10 The reasoning from Maryland Cas. Co. v. Omaha Elec. Light & Power Co. (8th Cir 1907) 157 F. 514 , 517-519, which was adopted in Tulare County Power Co. v. Pacific Surety Co., supra, 43 Cal.App. 315 , .329-330, and echoed in Sampson v. Century Indem. Co., supra, 8 Cal.2d 476 , 480-481, is not persuasive. The theory that the indemnitee is permitted to use the sum withheld during the indemnitor’s appeal and theoretically earns interest on it, and loses nothing by paying out that interest on termination of the appeal, assumes that the underwriter may subject the indemnitee to such delay under any circumstances. If the appeal or delay is for the sole benefit of the indemnitor there is, as pointed out in the first part of this opinion, cause to put the costs of each delay, including interest, on the indemnitor. In such event the indemnitee should be entitled to the value of the use of his own money during the period of delay, and the indemnitor should repay the indemnitee 'if the latter is called upon to pay it out to the claimant as interest which accrued solely because of the indemnitor’s further contest of the claim.
The judgment is reversed and the trial court is directed to enter judgment for the assured plaintiffs for $38,252.14, with interest from August 24, 1965.
Molinari, P. J., and Elkington, J., concurred.
A petition for a rehearing was denied April 21, 1970, and respondents’ petition for a hearing by the Supreme Court was denied May 28, 1970.
Cases cited
- Platt v. Platt 21 Cal.2d 343 p. 329
- Ecco-Phoenix Electric Corp. v. Howard J. White, Inc. 1 Cal.3d 266 at 272 p. 329, p. 335
- United States Leasing Corp. v. duPont 69 Cal.2d 275 at 284 p. 329
- Hembree v. Quinn 69 Cal.2d 200 at 213 p. 329
- Parsons v. Bristol Development Co. 62 Cal.2d 861 at 865-866 p. 329
- Karpe v. Great American Indemnity Co. 190 Cal.App.2d 226 p. 329
- Somers v. United States Fidelity & Guaranty Co. 191 Cal. 542 p. 332
- County of Kings v. Scott 190 Cal.App.2d 218 at 224 p. 332
- Gray v. Zurich Insurance 65 Cal.2d 263 at 269, at 269-272 p. 333, p. 334
- Steven v. Fidelity & Casualty Co. 58 Cal.2d 862 at 875 p. 333
- Continental Casualty Co. v. Phoenix Construction Co. 46 Cal.2d 423 at 437-438 p. 333
- Underwriters at Lloyd's of London v. Hunefeld 230 Cal.App.2d 31 at 38-39 p. 333
- Hobson v. Mutual Benefit Health & Accident Ass'n 99 Cal.App.2d 330 at 333 p. 333
- Alberts v. American Casualty Co. 88 Cal.App.2d 891 at 899-900, at 898 p. 334, p. 336, p. 338
- Sampson v. Century Indemnity Co. 8 Cal.2d 476 at 480, at 479 p. 334, p. 337, p. 339
- Burr v. Western States Life Insurance 211 Cal. 568 at 576 p. 334
- Tulare County Power Co. v. Pacific Surety Co. 43 Cal.App. 315 at 327, at 325-327, at 329-330, at 327-330 p. 334, p. 336, p. 337
- Treloar v. Keil & Hannon 36 Cal.App. 159 at 171, at 161 p. 334, p. 336
- Insurance Co. of North America v. Electronic Purification Co. 67 Cal.2d 679 at 689-690 p. 334
- Crisci v. Security Insurance 66 Cal.2d 425 p. 334
- Jenné v. Jenné 192 Cal.App.2d 827 at 831 p. 335
- Straus v. North Hollywood Hospital, Inc. 150 Cal.App.2d 306 at 311 p. 335
- Hawley v. Orange County Flood Control District 211 Cal.App.2d 708 at 716 p. 335
- J. Frank & Co. v. New Amsterdam Casualty Co. 175 Cal. 293 at 297 p. 336
- San Pedro Properties, Inc. v. Sayre & Toso, Inc. 203 Cal.App.2d 750 at 756 p. 336
- Rodgers v. Pacific Coast Casualty Co. 33 Cal.App. 70 at 75 p. 337
- Pigg v. International Indemnity Co. 86 Cal.App. 671 at 675-676 p. 337, p. 339
- Comunale v. Traders & General Insurance 50 Cal.2d 654 at 659 p. 338
- Hunt v. United Bank & Trust Co. 210 Cal. 108 at 116-117 p. 338
- Walters v. American Insurance 185 Cal.App.2d 776 at 785 p. 338
- Venturi v. Zurich General Accident & Liability Co. 14 Cal.App.2d 89 at 90 p. 338