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Court of Appeal, Second District, Division 3, California.

Marjorie J. CLEMMER and Hugh Howard Clemmer, a minor under 14 years of age, by Marjorie Clemmer, as guardian ad litem, Plaintiffs, Appellants and Respondents, v. The HARTFORD INSURANCE COMPANY, a corporation, Defendant, Respondent and Appellant.

Civ. 47451.

Decided: January 24, 1977

Gibson, Dunn & Crutcher, John H. Sharer Fred F. Gregory, Los Angeles, for appellants and respondents Clemmer. Overton, Lyman & Prince, Carl J. Schuck, John D. McCurdy, Valerie Baker, Los Angeles, for respondent and appellant Hartford.

It appears without conflict that on January 30, 1971, Daniel D. Lovelace, M.D. shot and killed his employer Hugh Clemmer, M.D. Dr. Clemmer left surviving his wife Marjorie and a minor son Hugh. Dr. Lovelace was charged with murder and convicted thereof in the second degree. In a civil wrongful death action Dr. Clemmer's widow and minor son obtained a default judgment againt Dr. Lovelace in the sum of $2,003,421. That judgment became final. Thereafter the instant action was brought by the Clemmers against The Hartford Insurance Group based upon an insurance policy purporting to indemnify Dr. Lovelace for all sums which he is legally obligated to pay as damages and expenses in excess of $50,000 to a maximum of $5,000,000 because of personal injury or property damage occurring during the policy period. Hartford answered the complaint denying generally that the policy in question extended any coverage to the Clemmers and specifically because the loss or injury arose from a willful act for which the carrier was not liable under Insurance Code section 533.1 The issue raised by this defense, the willfulness of the act, was submitted to a jury which, in response to a special interrogatory, determined that Dr. Clemmer's death was not caused by a willful act of Dr. Lovelace. In accordance with this determination the trial court prepard, signed and filed extensive findings of fact concluding therefrom that the death was not caused by a willful act rendering the policy exclusion2 and Insurance Code section 533 inapplicable. Judgment was entered accordingly in favor of the Clemmers for $2,003,480 less the $50,000 deductible. Thereafter Hartford moved for a judgment notwithstanding the verdict, a new trial and to vacate the judgment and to enter a new and different judgment. These motions were argued and submitted. On June 11 and 18, 1975, the trial court made orders the effect of which was to deny the motions for judgment notwithstanding the verdict, to vacate the judgment and enter a new and different judgment and, after vacating certain of its conclusions of law, the jury's verdict and the judgment, to grant the motion for a new trial limited to the sole issue previously submitted to the jury.

The Clemmers appeal from the portions of those orders which vacated conclusions of law, the jury verdict, the judgment and granted defendant a new trial as well as from the specification of reasons therefor. Hartford cross-appeals from those portions denying its motions for judgment notwithstanding the verdict, to vacate the judgment and enter another and different judgment, for a new trial on all issues and from the judgment. No appeal is taken by Hartford from the order insofar as it did in fact vacate conclusions of law, the verdict and judgment and grant a new trial.. The appeals lie. (Code Civ.Proc., § 904.1 subds. (a)(b)(d).)

The Clemmer Appeal Contentions

It is contended on appeal by the Clemmers that (1) the order granting the new trial must be reversed because the specifications of reasons is legally inadequate and not supported by substantial evidence, (2) the granting of a new trial upon the ground of insufficiency of evidence violates constitutional rights to jury trial and due process, and, (3) irrespective of the question of willfulness, the order granting a new trial was improper because (a) Hartford had breached its duty to defend Dr. Lovelace in the basic action and is now bound by the implied finding of negligence which follows from the adverse judgment in the wrongful death action, and (b) an innocent third party beneficiaries to the insurance contract, the exclusion for willful acts is inapplicable to them.


We have examined the introductory factual statement and accompanying exhaustive legal treatise presented by plaintiffs and find same interesting but hardly calculated to influence our decision herein.

The statutory law applicable to the granting of a new trial and review of the order granting same is found in Code of Civil Procedure section 657 enacted in 1872 and last amended in 1967. It is provided therein that:

‘The verdict may be vacated and any other decision may be modified or vacated, in whole or in part, and a new or further trial granted on all or part of the issues, on the application of the party aggrieved, for any of the following causes, materially affecting the substantial rights of such party: . . .

6. Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against the law. . . .

When a new trial is granted, on all or part of the issues, the court shall specify the ground or grounds upon which it is granted and the court's reason or reasons for granting the new trial upon each ground stated.

A new trial shall not be granted upon the ground of insufficiency of the evidence to justify the verdict or other decision, nor upon the ground of excessive or inadequate damages, unless after weighing the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the court or jury clearly should have reached a different verdict or decision. . . .

On appeal from an order granting a new trial the order shall be affirmed if it should have been granted upon any ground stated in the motion, whether or not specified in the order or specification of reasons, except that (a) the order shall not be affirmed upon the ground of the insufficiency of the evidence to justify the verdict or other decision, or upon the ground of excessive or inadequate damages, unless such ground is stated in the order granting the motion and (b) on appeal from an order granting a new trial upon the ground of the insufficiency of the evidence to justify the verdict or other decision, or upon the ground of excessive or inadequate damages, it shall be conclusively presumed that said order as to such ground was made only for the reasons specified in said order or said specification of reasons, and such order shall be reversed as to such ground only if there is no substantial basis in the record for any of such reasons.'

We first turn to the contention that ‘The specification of reasons is wholly inadequate and the order granting a new trial must be vacated on that basis alone.’ We construe this to be an attack on the technical sufficiency of the procedure employed by the trial court in resolving the problem before it when presented with these post judgment motions.

The minute order granting the new trial reads in pertinent part: ‘A new trial is granted to defendant upon the sole ground that the evidence in the case is insufficient to justify the verdict of the jury. . . .’ No more specific statement of the ground for the granting of the motion could be made. In compliance with section 657 a five page document entitled ‘Specifications of Reasons For Granting Motion for New Trial’ (emphasis added) was prepared by the court and filed. This document commenced as follows:

‘The motion for new trial is granted because after weighing the evidence the Court is convinced from the entire record, including all reasonable inferences therefrom, that the jury clearly should have reached a verdict determining that the death of Dr. Clemmer was caused by a willful act of Dr. Lovelace. The reasons for granting said motion on said ground are as follows:

The Court defined the area of the jury's consideration by a formula instruction as follows:

If you find by a preponderance of the evidence that Dr. Lovelace had the mental capacity to intend to shoot and harm Dr. Clemmer when he caused his death, as well as the mental capacity to govern his own conduct, you will answer this question ‘Yes.’

If, on the other hand, you find that at that time Dr. Lovelace was suffering from a mental disease or defect of such magnitude that he could not form the mental state I have just mentioned, then you will answer the question ‘No.’

Unless evidence may be found to support the jury's verdict within the limits of this instruction, the verdict may not stand.'

In the ensuing two pages the court summarized the evidence on the subject concluding that:

‘In the face of the uncontroverted factual evidence of rational, deliberate conduct, both before, at the time of, and after the murder, a finding that this act was not willful is ridiculous and makes a mockery of the legal process. Measured by the jury's finding in this case, no person could be held to have willfully performed a planned action, provided he was motivated by a sense of depression or anger. In weighing the evidence as I must, I reject the opinions of Dr. Anselen, which would exonerate Dr. Lovelace from the ability to kown and recognize the nature of his act and to control his conduct, as being absurd. Aside from these ill-founded opinions, there is no support for the jury's finding. I am satisfied that if the action had been between two individuals, rather than a widow and fatherless child against an insurance company, a different result would have been reached by the jury.’

It seems too obvious for discussion that the ground for the granting of the new trial was insufficiency of the evidence. This is an acceptable ground for the taking of such action. (Code Civ.Proc., § 657 subd. 6.) The reason for the granting of the motion is equally obvious to us, to wit: that there was no credible evidence to support the jury's determination that the act was not willful. This reason was adequately elaborated upon in the specification of reasons. As was said in Hale v. Farmers Ins. Exch., 42 Cal.App.3d 681, 693, 117 Cal.Rptr. 146, 154:

‘Under the provisions of Code of Civil Procedure section 657, as amended in 1965, where the ground relied upon is insufficiency of the evidence to support the verdict, a trial judge must briefly identify the portion of the record which convinces the judge the court or jury should have reached a different verdict or decision. While he need not cite page and line, nor discuss the testimony of particular witnesses, nor the weight to be given each item of evidence, he must not merely state his reasons in terms of conclusions, issues or ultimate facts, but must supply the reviewing court with information such as to enable it to review the order in a meaningful way. (Scala v. Jerry Witt & Sons, Inc., supra (1970) 3 Cal.3d 359, 363–364, 90 Cal.Rptr. 592, 475 P.2d 864.)

In Mercer v. Perez (1968) 68 Cal.2d 104, 65 Cal.Rptr. 315, 436 P.2d 315, the court concluded the 1965 amendment to Code of Civil Procedure section 657, requiring articulation of reasons was designed to serve a dual purpose: (1) to foster mature and careful reflection by the trial court before ruling on the motion for new trial, and (2) to make the review on appeal from the order more meaningful. (Ibid., pp. 112–115, 65 Cal.Rptr. 315, 436 P.2d 315.)'

No hard or fast rule can be laid down as to the content of such a specification and it will necessarily vary according to the facts and circumstances of each case. (Mercer v. Perez, 68 Cal.2d 104, 115, 65 Cal.Rptr. 315, 436 P.2d 315.) We are satisfied that both objectives discussed in Mercer were fulfilled by the procedure adopted by the trial court in the case at bench. The specification of reasons has provided sufficient information for us to meaningfully review the order.

Plaintiffs also attack the propriety of the trial court's action in granting the new trial contending that the substantive ground therefor and reasons specified are not supported by the record. In other words that the judgment on the verdict finds substantial evidentiary support in the record with the result that the court's action was an abuse of discretion. In this respect plaintiffs face an uphill battle.

‘The question on review is not whether there was substantial evidence to support the jury's verdict (as it would be on appeal from a judgment entered on the verdict), but whether the record supports the trial court's determination, after weighing all the evidence, the jury clearly should have reached a different verdict. All presumptions are in favor of the new trial order and conflicts in the evidence must be resolved in favor of the trial court's ruling (Martinez v. Harris, 273 Cal.App.2d 385, 397–398, 78 Cal.Rptr. 325).’

(Russell v. Nelson, supra, 1 Cal.App.3d 919, 922, 82 Cal.Rptr. 221, 223.)

In considering such a contention we are governed by the following established principles:

‘All presumptions are in favor of the order granting a new trial and an appellate court will not disturb the ruling unless a manifest and unmistakable abuse of discretion is made to appear. (Klinger v. Henderson (1969) 276 Cal.App.2d 774, 777, 81 Cal.Rptr. 305.) The 1965 amendments to Code of Civil Procedure section 657 specifying that a new trial shall not be granted unless the court is satisfied that the jury clearly should have reached a contrary verdict and requiring the court to state its reasons for believing the evidence insufficient does not alter the authority of the trial judge to disbelieve witnesses, reweigh evidence and draw reasonable inferences that are contrary to those drawn by the jury. (Roseboro v. Rawlings Mfg. Co. (1969) 275 Cal.App.2d 43, 47, 79 Cal.Rptr. 567; Dixon v. St. Francis Hotel Corp. (1969) 271 Cal.App.2d 739, 742, 77 Cal.Rptr. 201.)

An order granting a new trial on the ground of insufficiency of the evidence to justify the verdict shall be reversed only when there is no substantial basis in the record for any of such reasons. (Thompson v. John Strona & Sons (1970) 5 Cal.App.3d 705, 709, 85 Cal.Rptr. 350.)

Granting a motion for new trial rests in the discretion of the trial judge to such an extent that a reviewing court will not interfere unless an abuse of discretion clearly appears. An appellate court's review is limited to the inquiry as to whether there was any support for the trial court's ruling. All presumptions are in favor of the order and it may be reversed only when “it can be said as a matter of law that there is no substantial evidence to support a contrary judgment,” or to support the trial court's specification of reasons. (Mercer v. Perez, supra (1968) 68 Cal.2d 104, 114, 65 Cal.Rptr. 315, 436 P.2d 315; Thompson v. John Strona & Sons, supra (1970) 5 Cal.App.3d 705, 709, 85 Cal.Rptr. 350.)'

(Hale v. Farmers Ins. Exch., supra, 42 Cal.App.3d 681, 692–693, 117 Cal.Rptr. 146, 154; see also Bauman v. San Francisco, 42 Cal.App.2d 144, 159, 108 P.2d 989.)

Applying these principles to the instant case and particularly bearing in mind that on such a motion the trial court may disbelieve witnesses, reweigh evidence and draw reasonable inferences that are contrary to those drawn by the jury, we cannot say that in granting a new trial the trial court abused its discretion.

Despite argument to the contrary there was ‘some’ support in the record for the trial court's action. We cannot say as a matter of law that there was no substantial evidence to support a finding that Dr. Lovelace's act was willful. For example, Anthony Di Nolfo, M.D., a qualified psychiatrist, testified in great detail with respect to Dr. Lovelace's background and mental condition at and prior to the killing concluding as follows:

‘Now some of these assumptions that I have given you are already in the background that you gave me, but I want you to assume all of those to exist, plus all the history that you got. Now I'm going to ask you some opinions.

In your opinion, Doctor, was Dr. Lovelace, during those events and in connection with the shooting of Dr. Clemmer, in a state of paranoia?

A It would not appear to be paranoia to me. I'm also including what I know about him from my own examination; is that right?

Q Right. Was he in an acute state of paranoia?

A That would not seem to be the picture to me, no.

MR. SHARER: I didn't hear that, I'm sorry.

THE WITNESS: That would not seem to be the picture to me, no.

Q BY MR. SHUCK: Was he crazy? in layman's language.

A I would not consider him crazy, in layman's language.

Q Doctor, in your opinion did Dr. Lovelace, in connection with these events, have the mental capacity to deliberate on his actions?

A It would be my opinion that he did.

Q And to premeditate?

A Yes.

Q And in your opinion, did he intend to shoot and harm Dr. Clemmer?

A From all of the material that I have, plus what you have added, it would be my opinion that he did.

Q And in your opinion, was that a wilful act?

MR. SHARER: Your Honor, that calls for a legal conclusion.

THE COURT: Overruled. Which is the wilful act?—the shooting?

Q BY MR. SHUCK: In your opinion, was the shooting of Dr. Clemmer a wilful act?

MR. SHARER: Objection again, on the ground it calls for a legal conclusion.

THE COURT: Objection overruled. You may answer.

THE WITNESS: Thank you, your Honor. If you're saying did he intend to do this—if that's what you mean by a wilful act—I would have to say, yes.

Q BY MR. SHUCK: All right. The question is whether he had the mental capacity to intend to shoot and harm Dr. Clemmer when he caused his death.

A From my understanding of mental capacity, all of the things that you have described that he did beforehand would indicate to me that he could form specific intent.

Q And did he have at that time the mental capacity to govern his own conduct?

A Could he have control over his conduct, you mean?

Q Yes.

A I believe that he would.'

This and other testimony of the doctor clearly supports the statement of the trial court to the effect that Lovelace had ‘the capacity to deliberate, premeditate and intend his actions and control his conduct.’ This is true despite the existence of testimony of Jaime B. Anselen, M.D. to the contrary whose conclusions were expressly rejected by the trial court.

It is not our function to make a detailed critical analysis of the statement of reasons given by the court in ruling on the motion. Even if isolated reasons were found to be unsupportable, it would make no difference as long as any one reason finds support is the record. (Miller v. National American Life Ins. Co., 54 Cal.App.3d 331, 345–346, 126 Cal.Rptr. 731.)

We turn next to a consideration of the contentions that Code of Civil Procedure section 657, both on its face and as applied in the instant case, denied to plaintiffs their constitutional rights to a jury trial and due process of law.

At the outset we commend the zeal with which these contentions have been approached. The extensive research and voluminous argument will no doubt serve its purpose before the appeal is concluded but it is of little value to this intermediate appellate court. The constitutionality of section 657 has previously been determined adversely to plaintiffs' contention by the Supreme Court with respect to the argument concerning right to trial by jury. As was said in Dorsey v. Barba, 38 Cal.2d 350, 358, 240 P.2d 604, 609:

‘However, it is not the mere form of a jury trial to which one is entitled under the Constitution, but the fundamental right to have a jury determination of a question of fact. It is, of course, clear that there has been no denial of such right if a verdict is set aside and motion for new trial granted. Estate of Bainbridge, 169 Cal. 166, 146 P. 427; Ingraham v. Weidler, 139 Cal. 588, 73 P. 415.’

With respect to the due process argument we also see no reason to indulge in a detailed consideration of the subject. In Gray v. Whitmore, 17 Cal.App.3d 1, 20–21, 94 Cal.Rptr. 904, 914, we find a general discussion of due process:

‘The term ‘due process of law’ asserts a fundamental principle of justice which is not subject to any precise definition but deals essentially with the denial of fundamental fairness, shocking to the universal sense of justice. (See Brown v. New Jersey, 175 U.S. 172, 176, 20 S.Ct. 77, 44 L.Ed. 119 [121]; Dent v. West Virginia, 129 U.S. 114, 123–124, 9 S.Ct. 231, 32 L.Ed. 623 [626]; Betts v. Brady, 316 U.S. 455, 462, 62 S.Ct. 1252, 86 L.Ed. 1595 [1601]; Galvan v. Press, 347 U.S. 522, 530, 74 S.Ct. 737, 98 L.Ed. 911 [921]; Mihans v. Municipal Court, 7 Cal.App.3d 479, 484, 87 Cal.Rptr. 17.) The definition in each case depends upon the circumstances varying with the subject matter and the necessities of the situation. (Moyer v. Peabody, 212 U.S. 78, 84, 29 S.Ct. 235, 53 L.Ed. 410 [416].) Accordingly, the same circumstances may in one setting constitute a deprivation of due process while in another setting, in the light of other considerations, the same circumstances may not amount to such denial. (Betts v. Brady, supra [overruled on other grounds, Gideon v. Wainwright, 372 U.S. 335, 339, 83 S.Ct. 792, 9 L.Ed.2d 799, 802, 93 A.L.R.2d 733].)

Under the concept of ‘due process of law,’ procedural as well as substantive rights are protected. Procedural due precess requires that before a person is deprived of his life, liberty or property he must be given notice of the proceedings against him (see Anderson Nat. Bank v. Luckett, 321 U.S. 233, 246, 64 S.Ct. 599, 88 L.Ed. 692 [704, 151 A.L.R. 824]; Pierce v. Superior Court, 1 Cal.2d 759, 762, 37 P.2d 453, 460 [96 A.L.R. 1020]), he must be given an opportunity to defend himself (see Shields v. Utah Idaho R. Co., 305 U.S. 177, 182, 59 S.Ct. 160, 83 L.Ed. 111 [115]; Gray v. Hall, supra, 203 Cal. 306, 318, 265 P. 246), and the propriety of the deprivation must be resolved in a manner consistent with essential fairness. (See Hannah v. Larche, 363 U.S. 420, 442, 80 S.Ct. 1502, 4 L.Ed.2d 1307 [1321]; Galvan v. Press, supra, 347 U.S. 522, 530, 74 S.Ct. 737, 98 L.Ed. 911; Mihans v. Municipal Court, supra, 7 Cal.App.3d 479, 484, 87 Cal.Rptr. 17.) Substantive due process, on the other hand, deals with protection from arbitrary legislative action, even though the person whom it is sought to deprive of his right to life, liberty or property is afforded the fairest of procedural safeguards. In substantive law such deprivation is supportable only if the conduct from which the deprivation flows is prescribed by reasonable legislation reasonably applied, i. e., the law must not be unreasonable, arbitrary or capricious but must have a real and substantial relation to the object sought to be attained. (See Nebbia v. New York, 291 U.S. 502, 525, 54 S.Ct. 505, 78 L.Ed. 940 [949]; West Coast Hotel Co. v. Parrish, 300 U.S. 379, 391, 57 S.Ct. 578, 81 L.Ed. 703 [708], 108 A.L.R. 1330.)'

We perceive plaintiffs' due process argument to be substantially the same as his constitutional jury argument, to wit, that section 657 permits of an improper interference with the jury verdict. We simply answer the argument by reference to the quotation from Dorsey v. Barba, supra, 38 Cal.2d 350, 358, 240 P.2d 604. If the right to jury trial is not denied because a jury trial of the issue is still available, the right of due process in its traditional sense is likewise preserved to the litigant. True, a favorable trial result may have been lost but not necessarily lost forever. Presumably if the result was sound it will eventually prevail despite the view taken by any one trial court in attempting to do justice.

Finally it is argued that, disregarding the issue of willfulness, plaintiffs are entitled to judgment because Hartford failed to defend Lovelace in the underlying wrongful death action as required by the policy of insurance and because, as to innocent third party beneficiaries, the defense of willfulness is unavailable.

First, with respect to the failure to defend, plaintiffs argue that under Gray v. Zurich Insurance Co., 65 Cal.2d 263, 54 Cal.Rptr. 104, 419 P.2d 168, and others, that the insurer must defend an action against its insured where the claim embodied therein is potentially covered by the policy and that because it failed to do so in this case Hartford is estopped from asserting the defense of willfulness. It is pointed out that the wrongful death action proceeded against Lovelace on the theory, inter alia, of negligence and that no evidence of intent was ever introduced therein. We note the homicide occurred January 30, 1971. Lovelace was convicted of second degree murder August 20, 1971. The wrongful death action was filed November 8, 1971. In this connection the trial court in the case at bench expressly found:

‘9. Lovelace was served with said summons and complaint while he was incarcerated in a California prison. Subsequently, Dennis A. Cannon, acting as Lovelace's attorney, requested and received from plaintiffs' counsel an extension of time to plead to the complaint in the wrongful death action.

10. Summons therein showing proof of such service was returned and filed on February 11, 1972 (Exhibit 1 in evidence).

11. Hartford was never informed by Lovelace that he had been served with a summons and complaint in said wrongful death action, nor was the defense of the suit tendered to Hartford by Lovelace.

12. Request for Entry Of Default in said wrongful death action was served on Lovelace on February 10, 1972, and was filed in the Los Angeles County Superior Court on February 11, 1972 (Exhibit 1 in evidence).

13. Hartford was never notified by Lovelace of the service of the Request for Entry Of Default.

14. Request for Default Setting therein was filed in the Los Angeles County Superior Court on March 1, 1972 (Exhibit 1 in evidence).

15. On April 13, 1972, Hartford, for the first time was notified of said wrongful death action by telephone call and telegram from Fred F. Gregory, counsel for plaintiffs herein, who stated that on April 14 (the following day) there would be a hearing to prove up damages on the default of Lovelace.

16. Hartford's first knowledge of the wrongful death action against its insured, Lovelace, was received through said telephone call and telegram of Fred F. Gregory on April 13, 1972.

17. On May 3, 1972, Joe Murphy, a claims representative of Hartford, communicated in a letter to Dennis A. Cannon, Lovelace's attorney, informing Cannon that it had recently been notified of the filing of the said wrongful death action against his client Lovelace, of the said service of the summons and complaint therein on him, and of the said default; and that Hartford had never been notified thereof or of the suit until advised by attorney Gregory; and Murphy on behalf of Hartford stated to Cannon: ‘While we can see no possibility of coverage in this instance predicated on the exclusion previously alluded to, and on the meager information at hand, we are directing this inquiry to ascertain whether or not either Dr. Lovelace or you as his representative have any intention of making any demand upon the Hartford Insurance Group to pursue investigation, defense, etc., in reference to this outstanding litigation. In the event that your reply is in the affirmative, we would appreciate the grounds on which you predicate your demand for such investigation, defense, or any other representation as a necessary prelude to our further consideration of the matter.’ Hartford thereafter received no communication or request from either Lovelace or his attorney, Dennis A. Cannon.

18. On May 31, 1972, judgment after default was entered against Lovelace in the amount of $2,003,421, plus plaintiffs' costs and disbursements amounting to the sum of $59, together with interest on said judgment provided by law, no part of which has been paid (Exhibit 1 in evidence).

19. On June 9, 1972, there was served on Lovelace and filed in the Superior Court of the State Of California for the County Of Los Angeles, a Notice Of Entry Of Default Judgment in the wrongful death action. More than six months has elapsed since the entry of said default judgment and said default judgment has become final (Exhibit 1 in evidence).

20. Thereafter, on November 30, 1972, Marjorie J. Clemmer on her own behalf and in her capacity as guardian ad litem for Hugh Howard Clemmer, a minor, filed the subject action in the Los Angeles County Superior Court against Hartford claiming that the aforesaid policy of insurance issued by it to Lovelace required that Hartford satisfy the judgment rendered against Lovelace in the wrongful death action.

22. Defendant has stated in prior summary judgment proceedings in this action that the claimed failure to notify it of the pendency of the wrongful death action was claimed by Hartford not as a defense to coverage but as a defense to plaintiffs' contention that defendant is foreclosed from raising the issue of coverage.

23. At no time did defendant make any attempt to set aside the default judgment obtained by plaintiffs against Dr. Lovelace.

24. Within a week after the shooting and killing of Dr. Clemmer by Dr. Lovelace, defendant was aware of such shooting and killing.

25. Plaintiffs were not parties to the criminal action in which Dr. Lovelace was tried for the killing of Dr. Clemmer.

26. Dr. Lovelace did not testify in said criminal matter.

27. The criminal matter against Dr. Lovelace arising out of the killing of Dr. Clemmer was tried to the Court without jury.

28. In said criminal action, Dr. Lovelace withdrew his plea of not guilty by reason of insanity (Defendant's Exhibit A in evidence).'

From these findings it was concluded that Hartford was never tendered the defense of nor refused to defend the wrongful death action.3

The policy cooperation clause (Part II 4.(a)(b)) provided in part:

‘Upon the happening of any event, incident or occurrence reasonably likely to involve this insurance, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the insured to the Company or any of its authorized agents as soon as practicable.

If claim is made or suit is brought against the insured, the insured shall immediately forward to the Company every demand, notice, summons or other process received by him or his representative. . . . No action shall lie against the Company unless, as a condition precedent thereto, there shall have been full compliance with all of the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the Company.'

Plaintiffs' argument that Hartford is bound by the implied finding of negligence in the wrongful death action for failing to defend Lovelace fails because, under the facts as found, there was no tender of defense to Hartford by Lovelace or refusal to defend. It is essential that the insured tender defense to the insurer and that the tender be refused before the insurer can be penalized for refusal to defend its insured. In Cravens, Dargan & Co. v. Pacific Indem. Co., 29 Cal.App.3d 594, 602–603, 105 Cal.Rptr. 607, 613, it was said:

‘Appellants contend that it was known to Pacific Indemnity that there was a potential liability under its policy (especially in the matter of recommendation of the product), wherefore the insurer was obliged to defend the Marchese action, even though ultimately it might be decided that there was no liability under the policy. The penalty for failure to defend is liability for the full amount of a reasonable settlement (and it was stipulated that the settlement was reasonable). Appellants cite Gray v. Zurich Insurance Co., 65 Cal.2d 263, 54 Cal.Rptr. 104, 419 P.2d 168; Hays v. Pacific Indem. Group, 8 Cal.App.3d 158, 86 Cal.Rptr. 815; State Farm Mut. Auto. Ins. Co. v. Allstate Ins. Co., 9 Cal.App.3d 508, 88 Cal.Rptr. 246; Paramount Properties Co. v. Transamerica Title Ins. Co., 1 Cal.3d 562, 83 Cal.Rptr. 394, 463 P.2d 746. But in all of these defense was tendered. In the present case, no one called on Pacific Indemnity to defend, although Moyer Chemical and Cravens, Dargan were actively defending themselves. To be sure, Pacific Indemnity knew of the lawsuit, informed itself about it, and asked Moyer Chemical for information about the loss. Pacific Indemnity had engaged a lawyer to appear in a related case (that of a different plaintiff suing for damages because of the Lindane), and the lawyer attended some depositions in the Marchese case, but the local claims manager testified that he understood this was as a passive observer. Then the home office advised that there was no coverage. The claims manager did not inform Moyer Chemical of this, deeming it unnecessary. At no time, he testified, did he authorize an attorney to associate in the defense of the Marchese claim.

A request was made on Pacific Indemnity by a letter asking that it contribute to a settlement. Even at this point, it was not pointed out to Pacific Indemnity, so far as the record shows (the only writing before us is the single letter), why the company should pay despite the products exclusion clause, nor was there an offer suggesting that it join in the defense against Marchese' claim, but only that it contribute to a settlement.

Nor is estoppel shown against the defense of ‘no tender.’ The court found that Pacific Indemnity at all times acted in good faith. There was not shown any action taken or foregone by appellants which was induced by conduct of Pacific Indemnity. One would expect testimony, when a claim of estoppel is made, ffom someone who would assert he was beguiled, but here none was offered.'

In the instant case Hartford was not estopped to assert the defense of willfulness because of the default judgment entered in the wrongful death action. The issue of negligence was never in fact litigated.. It appears clear that unless the policy extends coverage to Lovelace none is available to the Clemmers. In Valladao v. Fireman's Fund Indem. Co., 13 Cal.2d 322, 89 P.2d 643, the plaintiffs had obtained a judgment against assureds of Fireman's Fund. The judgment being unsatisfied they filed an action against the insurer. The action was defended upon the ground that the insureds had violated the cooperation clause of the insurance policy precluding coverage to the insureds as well as to the judgment creditor plaintiffs. In discussing the issue the Supreme Court observed at page 328, 89 P.2d at page 646:

‘Preliminary to a discussion of the issues here involved, it is well to point out that it is now definitely settled here, and in a majority of the states, that in an action of this character the injured person stands in no better position than the assured and that a violation by the latter of a cooperation clause which would serve to preclude the assured from indemnity under his policy will likewise bar the injured person from recovering against the insurer should the judgment in his favor and against the assured remain unsatisfied. (Hynding v. Home Acc. Ins. Co., 214 Cal. 743, 746–751, 7 P.2d 999, 85 A.L.R. 13.)’

With respect to the contention that, assuming the act was willful, the defense of willfulness is inapplicable to plaintiffs as third party beneficiaries under the policy, it is argued that, because the policy confers a right of action upon them and does not expressly reserve the right to assert a willful act defense against such third party beneficiaries, there is coverage for them. In other words, it is suggested that the policy provides coverage to plaintiffs even though it may not have to the insured. While we recognize the trial court determined that plaintiffs are third party beneficiaries, we nevertheless conclude the contention to be without merit.

The argument is based upon Paragraph 12 Part II of policy conditions.4 We agree that the policy permits recovery by third parties as judgment creditors but only if there has been ‘full compliance with all of the terms of this policy.’ Before plaintiffs may proceed on the third party beneficiary theory the conditions of Paragraph 12 must have been met. Invocation of the third party beneficiary theory as creating strict liability on the part of the insurer at this time is precluded by failure to comply with these conditions.

It is argued that because the trial court found that the policy provision excluding intentional acts was ambiguous and of no legal effect, Hartford cannot assert Insurance Code section 533 against third party beneficiaries without reserving such a defense in the policy. The argument is without merit. It presupposes that the so-called third party beneficiaries have rights under the policy in excess of those conferred by it upon the insured himself. A similar contention was made in Evans v. Pacific Indemnity Co., 49 Cal.App.3d 537, 122 Cal.Rptr. 680. In Evans plaintiffs appealed from judgment for defendant after trial by the court. The judgment decreed that plaintiffs, who were insured under a comprehensive liability insurance policy by defendant company, were not entitled to coverage for money damages awarded to one Edwin A. Rader in his tort action against plaintiff William H. Evans. Plaintiffs, as husband and wife, owned and operated a tavern in Butte County. The insurance policy covered, inter alia, liability to pay damages for bodily injury. While it was in force, a fight occurred on the premises of the tavern during the course of which the plaintiff William H. Evans inflicted serious bodily injuries upon Edwin A. Rader. Evans was criminally prosecuted and was convicted of assault upon Rader by means of force likely to produce great bodily harm, in violation of subdivision (a) of section 245 of the Penal Code.

Rader then filed a civil action for damages against William H. Evans for assault and battery, and obtained judgment for $25,500 plus $470 costs. During and after the tort action, the company formally disclaimed any liability under its insurance policy for any judgment rendered. After judgment and after the company had refused Evans' demand for payment of the judgment, plaintiffs filed the above action to recover the amount of the judgment and costs.

One of the undisputed findings of the trial court in the Evans case was that Evans' battery upon Rader was a willful and intentional act, that Evans intended the harm that resulted therefrom, and that the tort judgment was based upon such conduct. Accordingly, the court concluded that under the provisions of section 533 of the Insurance Code, the defendant was not liable to the plaintiffs for the amount of the tort judgment. That statute provides: ‘An insurer is not liable for a loss caused by the wilful act of the insured; but he is not exonerated by the negligence of the insured, or of the insured's agents or others.’ In affirming the judgment in favor of the defendant insurance carrier the court said at pages 540–541, 122 Cal.Rptr. at page 682:

‘On appeal, plaintiffs contend that since the insurance policy in this case was denominated a ‘comprehensive liability policy,’ it was incumbent upon the company to set forth in the policy the exclusion of liability for wilful acts of the insured. Plaintiffs argue that a layman would not know of the provisions of section 533 of the Insurance Code unless the company informed him of them, and they refer to the rule that an insurance policy should be interpreted as a layman would read it. (See, e. g., Otter v. General Ins. Co. (1973) 34 Cal.App.3d 940, 949, 109 Cal.Rptr. 831.) We have no quarrel with this rule, but it is a rule for construction of the actual language of a policy, not a rule governing the applicability of statutory exclusions from liability. The rule relating to statutory exclusions from insurance policies, and in particular with respect to section 533 of the Insurance Code, is well settled. Section 533 of the Insurance Code is a part of every insurance contract and is equivalent to an exclusionary clause in the contract itself. (Nuffer v. Insurance Co. of North America (1965) 236 Cal.App.2d 349, 356, 45 Cal.Rptr. 918; Maxon v. Security Ins. Co. (1963) 214 Cal.App.2d 603, 615, 29 Cal.Rptr. 586.)

There is no basis in the record upon which plaintiffs can successfully claim that defendant was estopped to assert the defense of section 533, because defendant did nothing, either before or after issuance of the policy, intended to cause plaintiffs to believe they were covered for wilful acts. Moreover, there were no statements or acts by the defendant after the wrongful act to cause an estoppel and prevent the application of section 533 of the Insurance Code. (Cf. Tomerlin v. Canadian Indemnity Co. (1964) 61 Cal.2d 638, 648, 39 Cal.Rptr. 731, 394 P.2d 571.)'

Under the circumstances defendant is not estopped to assert the defense of noncooperation. (Cf. Abbott v. Western Nat. Indem. Co., 165 Cal.App.2d 302, 305, 331 P.2d 997.) For reasons stated plaintiffs are not entitled to judgment as a matter of law. The order granting defendant a new trial was properly made and would ordinarily be affirmed but, because of the disposition to be made of the Hartford appeal, that order must be reversed.

The Hartford Appeal Contentions

It is contended, inter alia, by Hartford that the Clemmers are collaterally estopped by the murder conviction of the court in People v. Lovelace, Superior Court number A116509 from asserting a claim for coverage under the Hartford policy.

In this connection the trial court in the instant case found:

‘On January 30, 1971, Lovelace killed Dr. Clemmer by shooting him five times with a .45 caliber revolver, for which Lovelace was charged with murder by the People of the State Of California in the case of People v. Lovelace, No. A 116509 (Exhibit A in evidence).

On July 26, 27, 28, 29 and 30, 1971 trial was held on these charges and Lovelace was found guilty of murder in the second degree. On August 20, 1971 a judgment of conviction of second degree murder was entered against Lovelace for the shooting of Dr. Clemmer (Exhibit A in evidence). No appeal was taken from said judgment, and the same duly became final. Lovelace was sentenced to serve the term prescribed by law and still is confined in prison,' and expressly concluded:

‘The judgment adjudging Lovelace guilty of second degree murder necessarily determined among other things as between Lovelace and defendant Hartford that Lovelace's killing of Dr. Clemmer was an unlawful killing with malice aforethought, that Lovelace intended to shoot and harm Dr. Clemmer when he caused his death, and that Lovelace when he shot and killed Dr. Clemmer had sufficient mental capacity to know and understand what he was doing and the nature and quality of his act, and to form the mental states referred to in this paragraph.’

It remains to decide whether that judgment collaterally estops the Clemmers from relitigating the issue against Hartford. We agree with Hartford that it does. It is well established that any issue necessarily decided in a cause of action by a court of competent jurisdiction is conclusively determined as to the parties or their privies if it is involved in a subsequent lawsuit on a different cause of action. (Bernhard v. Bank of America, 19 Cal.2d 807, 810, 122 P.2d 892.) This principle is often termed collateral estoppel and is applicable in a civil case to issues determined in a previous criminal prosecution. (Teitelbaum Furs, Inc. v. Dominion Ins. Co. Ltd., 58 Cal.2d 601, 604–605, 25 Cal.Rptr. 559, 375 P.2d 439.)

‘Collateral estoppel has been held to bar relitigation of an issue decided at a previous trial if (1) the issue necessarily decided at the previous trial is identical to the one which is sought to be relitigated; if (2) the previous trial resulted in a final judgment on the merits; and if (3) the party against whom collateral estoppel is asserted was a party or in privity with a party at the prior trial. (See Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd. (1962) 58 Cal.2d 601, 604, 25 Cal.Rptr. 559, 375 P.2d 439, cert. den., 372 U.S. 966, 83 S.Ct. 109, 10 L.Ed.2d 130; Bernhard v. Bank of America (1942) 19 Cal.2d 807, 813, 122 P.2d 892.)’

(People v. Taylor, 12 Cal.3d 686, 691, 117 Cal.Rptr. 70, 73, 527 P.2d 622, 625.) In the instant case the first two of these requirements are fully satisfied. It is not suggested that any difference exists between issue of wilfulness determined in the criminal action and the issue as posed by the terms of the policy and by Insurance Code section 533 and we perceive none.

As pointed out above Insurance Code section 533 provides that an insurer is not liable for a loss caused by the willful act of the insured.5 Section 533 is a part of every insurance contract and is equivalent to an exclusionary clause in the contract itself. (Evans v. Pacific Indemnity Co., supra, 49 Cal.App.3d 537, 540, 122 Cal.Rptr. 680, and cases cited.)

In Davidson v. Welch, 270 Cal.App.2d 220, 75 Cal.Rptr. 676, a ‘wilful act’ as used in section 533 was defined at page 233, 75 Cal.Rptr. at page 684 as:

“A ‘wilful act’ as used in this statute [Ins.Code, § 533] connotes something more blameworthy than the sort of misconduct involved in ordinary negligence, and something more than the mere intentional doing of an act constituting such negligence. [Citations.]' (Russ-Field Corp. v. Underwriters at Lloyd's (1958) 164 Cal.App.2d 83, 96, 330 P.2d 432. See also Gray v. Zurich Ins. Co. (1966) 65 Cal.2d 263, 277, fn. 16, 54 Cal.Rptr. 105, 419 P.2d 168 and text quoted below; Capachi v. Glens Falls Ins. Co. (1963) 215 Cal.App.2d Supp. 843, 848, 30 Cal.Rptr. 323; Walters v. American Ins. Co. (1960) 185 Cal.App.2d 776, 783, 8 Cal.Rptr. 665; and see Maxon v. Security Ins. Co. (1963) 214 Cal.App.2d 603, 615, 29 Cal.Rptr. 586.)

In Capachi, supra, the court indicated, ‘. . . the word ‘wilful’ as used . . . [in § 533] may be said to connote an act done with malevolence, as distinguished from an act motivated by good intentions but founded in negligence.' (215 Cal.App.2d Supp. at p. 849, 30 Cal.Rptr. at p. 327.) In Maxon, supra, the court observed, ‘Malice imports willfulness; and, accordingly, in our opinion, is a ‘willful act’ within the meaning of section 533.' (214 Cal.App.2d at p. 616, 29 Cal.Rptr. at p. 593.)'

Therefore, when the insured Dr. Lovelace was convicted of second degree murder, the court found beyond a reasonable doubt, and adjudicated, that his act was willful and was done with the intent of killing Dr. Clemmer. This brings the act squarely within the policy provision that insurance does not extend to ‘any act committed by . . . the insured with the intent to cause personal injuries. . . .’ For the same reason, the provisions of Insurance Code section 533 and Civil Code section 1668 foreclose coverage under the subject policy. Thus the pivotal question presented by this litigation, to wit, whether Lovelace's act was willful, was in fact determined adversely to him in the criminal proceedings which are now final.

‘As to the third requirement of identity of parties, it is the rule in civil cases that the party benefitting from collateral estoppel need not have been a party in the prior trial so long as the party bound by the doctrine was such a party. Mutuality is thus not required. (Bernhard v. Bank of America, supra, 19 Cal.2d 807, 811–813, 122 P.2d 892; see Teitelbaum Furs, Inc. v. Dominion Ins. Co., Ltd., supra, 58 Cal.2d 601, 604–607, 25 Cal.Rptr. 559, 375 P.2d 439.)’

(People v. Taylor, supra, 12 Cal.3d at p. 692, 117 Cal.Rptr. at p. 74, 527 P.2d at p. 626.)

While it is true that neither the Clemmers nor Hartford were parties to the criminal action, that fact does not preclude the application of collateral estoppel in this case. Here Hartford need not have been a party because it is the one to benefit by the claimed collateral estoppel. While the Clemmers were not parties to that action the facts establish them to be in ‘privity’ with a party thereto, to wit, Lovelace. Following commission of the homicide it became clear that Dr. Lovelace's interests would be served if it could be established that the killing was not willful. This for at least two reasons, first, so that he could be relieved of the charge of murder and, second, that his liability coverage would remain in effect. The Clemmers had a similar interest in the outcome of the criminal trial. Referring once again to Teitelbaum Furs, Inc., supra, 58 Cal.2d at pages 606–607, 25 Cal.Rptr. at pages 561–562, 375 P.2d at pages 441–442, the Supreme Court addressed itself to the argument that collateral estoppel should not apply against a party who did not have the initiative in the previous action. In disposition of the argument it was said:

‘Plaintiffs contend, however, that in the absence of mutuality, collateral estoppel ought not be applied against a party who did not have the initiative in the previous action. (See Nevarov v. Caldwell, 161 Cal.App.2d 762, 327 P.2d 111; Currie, Mutuality of Collateral Estoppel: Limits of the Bernhard Doctrine, 9 Stan.L.Rev. 281, 313.) Although plaintiffs' president did not have the initiative in his criminal trial he was afforded a full opportunity to litigate the issue of his guilt with all the safeguards afforded the criminal defendant, and since he was charged with felonies punishable in the state prison (Pen.Code, § 17), he had every motive to make as vigorous and effective a defense as possible. Under these circumstances, we hold that any issue necessarily decided in a prior criminal proceeding is conclusively determined as to the parties if it is involved in a subsequent civil action.

It should be noted, however, that a criminal judgment that is subject to collateral attack on the ground, for example, that it was obtained through the knowing use of perjured testimony (Mooney v. Holohan, 294 U.S. 103, 55 S.Ct. 340, 79 L.Ed. 791, 98 A.L.R. 406; Alcorta v. Texas, 355 U.S. 28, 78 S.Ct. 103, 2 L.Ed.2d 9) or suppression of evidence (People v. Carter, 48 Cal.2d 737, 747, 312 P.2d 665), or that has in effect been set aside by a pardon based on the defendant's innocence (see Pen.Code, § 4900), is not res judicata in a subsequent action. (See Rest., Judgments, § 11.) Plaintiffs have advanced no grounds that would sustain a collateral attack on the judgment, but they contend that there are special reasons why collateral estoppel should not apply in this case. They point out that Teitelbaum chose not to take the stand in the criminal prosecution except for the limited purpose of denying an alleged admission, and contend that he was unable to secure the testimony of an alleged co-conspirator.

Teitelbaum's election not to testify in his own behalf in the criminal case was presumably made on the assumption that he would benefit thereby. His error, if any, in trial strategy would no more defeat the plea of collateral estoppel than the failure of a litigant to introduce relevant available evidence in any other situation.'

Likewise in the instant case Dr. Lovelace had the initiative and every incentive to make as vigorous and effective defense as possible. It follows that plaintiffs' position with respect to that litigation should not defeat the application of collateral estoppel. (See also People v. One 1964 Chevrolet Corvette Convertible, 274 Cal.App.2d 720, 726–732, 79 Cal.Rptr. 447.)

In Zaragosa v. Craven, 33 Cal.2d 315, 318, 202 P.2d 73, 74, our Supreme Court had occasion to characterize privity as follows: ‘The term ‘privity’ denotes mutual or successive relationship to the same rights or property.' Such characterization would embrace the situation at hand. Clemmers' relationship to Lovelace's rights under the policy is successive if not mutual. If there be a doubt that privity exists, we need but refer to the more recent decision of this court in People ex rel. State of Cal. v. Drinkhouse, 4 Cal.App.3d 931, 937, 84 Cal.Rptr. 773, 776, where in discussing the concept it was said:

‘We come now to Question No. 3, whether appellants were in privity with Weber and Rutledge, the parties to the prior adjudication. Our anawer is that they were such privies. It is true that there are statements in the cases to the effect that a privy is one who after rendition of the judgment has acquired an interest in the subject matter affected by the judgment through or under one of the parties, as by inheritance, succession or purchase. Such a statement, indeed, appears in Bernhard v. Bank of America, 19 Cal.2d 807, 811, 122 P.2d 892, the landmark case which did away with the need for mutuality of estoppel. Appellants make the point that they did not become grantees after the judgment of conviction, but rather before it was rendered.

But the word ‘privy’ has acquired an expanded meaning. The courts, in the interest of justice and to prevent expensive litigation, are striving to give effect to judgments by extending ‘privies' beyond the classical description. (People v. One 1964 Chevrolet Corvette Convertible, 274 Cal.App.2d 720, 731, 79 Cal.Rptr. 447.) The emphasis is not on a concept of identity of parties, but on the practical situation. The question is whether the nonparty is sufficiently close to the original case to afford application of the principle or preclusion. (People v. One 1964 Chevrolet Corvette Convertible, supra, at pp. 731–732, 79 Cal.Rptr. 447; Vestal, Preclusion/Res Judicata Variables: Parties, 50 Iowa L.Rev. 27, 45.) To quote Professor Vestal (at p. 45): ‘The courts and commentators have indicated a dissatisfaction with the analysis in terms of privity and mutuality and have expanded the impact of preclusion far beyond the traditional concepts. Clearly, the field is developing; it is obvious that the last word has not been spoken on the matter.’

It will be observed that the term ‘collateral preclusion’ appears in modern legal literature and, in fact, this term was thought of by the reporters of the Restatement of Judgments as being appropriate because it is less personal than that of ‘collateral estoppel,’ but the latter expression was kept because of usage. (Scott, Collateral Estoppel By Judgment, 56 Harv.L.Rev. 1, 3, fn. 4.)'

Finally we find the decision of the United States District Court, District of Columbia, in Travelers Indemnity Company v. Walburn, 378 F.Supp. 860, persuasive of our decision herein. In this case Walburn was convicted of second degree murder for the shotgun killing of one John T. Nalls, II. Walburn was insured with Travelers under a homeowners policy. A civil action was instituted against Walburn by Nalls' heirs. Travelers sought a declaratory judgment of its obligations under its policy. In holding that Travelers was not obligated to defend nor indemnify Walburn in the civil action arising out of the shooting the court said at pages 862–863, 865:

‘To reach this ultimate question, the Court must first address a fairly novel legal question in this jurisdiction concerning the applicability of collateral estoppel to the factual pattern of the instant case.


It is the contention of the plaintiff that there are no genuine issues of material fact respecting the expectation or intent of Mr. Walburn in his shooting of ‘Corky’ Nalls. This argument is grounded upon the theory that that issue was presented to the jury in Mr. Walburn's criminal trial and squarely decided by the jury when it found James Walburn guilty of secondd degree murder. Since the jury decided any question of intent or expectation against Mr. Walburn, Travelers argues, in this and any subsequent civil action Mr. Walburn is collaterally estopped from denying that he expected or intended the death of Nalls from his actions.

In past years many courts followed the rule that a judgment in a criminal proceeding was not admissible to establish any fact decided in a criminal trial. However, that wall of exclusion has slowly but steadily been eroded in many varying factual contexts. There are now a great number of jurisdictions that hold that a criminal conviction can indeed preclude litigation of the same issue in a civil suit. E. g., Breeland v. Security Insurance Co. of New Haven, Conn., 421 F.2d 918 (5th Cir. 1969); Bressan Export-Import Company v. Conlew, 346 F.Supp. 683 (E.D.Pa.1972); United States v. Fabric Garment Company, 366 F.2d 530 (2d Cir. 1966); Janney v. Arlan's Dept. Store, 247 F.Supp. 306 (W.D.Va.1965); Newman v. Larsen, 225 Cal.App.2d 22, 36 Cal.Rptr. 883 (1964); Travelers Ins. Co. v. Thompson, 281 Minn. 547, 163 N.W.2d 289, appeal dismissed and cert. denied 395 U.S. 161, 89 S.Ct. 1647, 23 L.Ed.2d 175 (1969); Taylor v. Taylor, 257 N.C. 130, 125 S.E.2d 373 (1962); Eagle, Star and British Dominions Insurance Company v. Heller, 149 Va. 82, 140 S.E. 314, 57 A.L.R. 490 (1927); see Local 167 of International Brotherhood of Teamsters v. United States, 291 U.S. 293, 54 S.Ct. 396, 78 L.Ed. 804 (1934); Stagecrafters' Club, Inc. v. District of Columbia Division of American Legion, 111 F.Supp. 127 (D.D.C.1953). The fact that the parties in the civil action are not the same as those in the criminal conviction has been held to be no bar to collateral estoppel. See, e. g., Breeland v. Security Insurance Co. of New Haven, Conn., supra; Bressan Export-Import Company v. Conlew, supra; Hurtt v. Stirone, 416 Pa. 493, 206 A.2d 624 (1965). (Fns. omitted.)

‘The policy reasoning of the Stagecrafters' case, the Bressan Export-Import case, and other cases not following the traditional rule of exclusion was stated succinctly by the Court in Stagecrafters':

. . . common sense and good judicial administration dictate that the civil court shall not retry at length, more than two years after the occurrence, issues which were fairly determined in the criminal proceeding, when the evidence was fresh, by a competent tribunal after full litigation by the party against whom the conviction is offered in evidence.

111 F.Supp. at 129.

This rationale has been followed in many cases where collateral estoppel has been applied, and it appears to this Court that such reasoning is equally applicable in the case sub judice. If the criminal jury found beyond a reasonable doubt that James Walburn by his acts either expected or intended to injury ‘Corky’ Nalls, it would be an exercise in futility for this Court to retry the same issues. This is especially true where the civil burden is only by a preponderance. Moreover, a trial where such a conviction would only be admitted as prima facie evidence would also be fruitless without some evidence of fraud or perjury or some like transgression at the original criminal trial.' (Fns. omitted.)

Bearing in mind the relationship of the parties, the identical nature of the issue in the criminal and civil cases, and the fact of its having been resolved adversely to the Clemmer interests by a court of competent jurisdiction bound by the ‘beyond a reasonable doubt’ standard as compared to the ‘preponderance of evidence’ rule applicable in civil litigation, we believe that the dictates of public policy in favor of applying collateral estoppel expressed in the cases compel its application in the case at bench.

Relying primarily upon Shapiro v. Republic Indemn. Co. of America, 52 Cal.2d 437, 341 P.2d 289, and certain language in Barrera v. State Farm Mut. Automobile Ins. Co., 71 Cal.2d 659, 79 Cal.Rptr. 106, 456 P.2d 674, and Bernhard v. Bank of America, supra, 19 Cal.2d 807, 122 P.2d 892, Clemmers argue that to collaterally estop them in this case would be ‘contrary to every persuasive authority from other jurisdictions in the United States, would violate due process of law and would be inimical to the public interest,’ concluding that: ‘To extend the bar of collateral estoppel in this case against the Clemmers would be to ignore controlling precedent on the question of privity, to ignore the Clemmers' independent right to a determination of their claim, to ignore reason which counsels that the Clemmers' interest in the criminal proceeding was, and should be, totally at odds with Dr. Lovelace's interest and to ignore the important public interest of fostering complete cooperation with the criminal process for the protection of all society.’

We have considered the argument advanced in support of Clemmers' position on collateral estoppel and the cases cited and find neither to be of persuasive force nor compelling of a contrary decision herein. Independent research has revealed the case of Exchange Cas. & Surety Co. v. Scott, 56 Cal.2d 613, 15 Cal.Rptr. 897, 364 P.2d 833, wherein the trial and Supreme Courts held that collateral estoppel could not be invoked to preclude coverage where the issue ‘necessarily decided at the previous trial’ was not identical to the one sought to be relitigated. That case involved the question of permissive use first litigated under Vehicle Code section 402 and later being litigated under the terms of the policy of insurance. In this respect it was said at page 620, 15 Cal.Rptr. at page 901, 364 P.2d at page 837:

‘It is thus manifest that even though the evidence as to Scott's permitted operation of the Sebastian automobile may have been similar in the prior and in the instant action, the issue of permission to be decided in each proceeding was different because of the operation of the opposing modes of construction applicable to the imputed liability statute in the first action, and the insurance contract in the present action. It follows that the question of Scott's permission within the terms of Standard's policy was not litigated in the prior action and the principles of collateral estoppel do not apply in favor of Standard. Estate of Williams, 36 Cal.2d 289, 292, 223 P.2d 248, 22 A.L.R.2d 716; Babcock v. Babcock, 63 Cal.App.2d 94, 97, 146 P.2d 279; Rest., Judgments, § 68; see also Greenfield v. Mather, 32 Cal.2d 23, 45–46, 194 P.2d 1.’

On the contrary the modes of construction applicable under the criminal statute and under the insurance contract in this case are the same. For that reason Exchange Cas. is distinguishable and not controlling of our decision herein.

For the reasons stated above, the order denying Hartford's motion for judgment notwithstanding the verdict was improper. Our decision on this point renders moot Hartford's other contentions with respect to its alternate appeal from the judgment itself.

The orders of June 11 and 18, 1975, granting a new trial, denying defendant's motion to set aside and vacate the judgment and enter another and diferent judgment and for judgment notwithstanding the verdict and the judgment are reversed. The trial court is directed to enter judgment for defendant. Defendant shall recover its costs on these appeals.


1.  This section provides:‘An insurer is not liable for a loss caused by the wilful act of the unsured; but he is not exonerated by the negligence of the insured, or of the insured's agents or others.’

2.  The policy expressly excluded coverage ‘to any act committed by or at the direction of the insured with intent to cause personal injury. . . .’

3.  Plaintiffs do not attack the validity of these findings and conclusions.

4.  This provision reads in part:‘No action shall lie against the Company unless, as a condition precedent thereto, there shall have been full compliance with all of the terms of this policy, nor until the amount of the insured's obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the Company.Any person or organization or the legal representative thereof who has secured such judgment or written agreement shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this policy.'

5.  Likewise Civil Code section 1668 provides:‘All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.’

ALLPORT, Acting Presiding Justice.

COBEY and POTTER, JJ., concur.

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