PHILLIPS v. SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE (1986)

Plaintiff appeals from summary judgment entered against her and in favor of defendant Southern California Physicians Insurance Exchange (SCPIE).

PROCEDURAL BACKGROUND

Plaintiff sued defendant for tortious breach of statutory duties under Insurance Code section 790.03, subdivision (h)(5), for failing to attempt in good faith to effectuate a prompt, fair and equitable settlement of her claim in which liability had become reasonably clear.   Her amended complaint alleged that Dr. Tischler, not a party herein, in performing a simple dilation and curettage procedure, sterilized her;  in March 1980, she informed Tischler's medical malpractice liability insurer, defendant herein, that she was filing a claim against Tischler;  in April 1980, defendant began an investigation of her claim against Tischler and his liability became reasonably clear during the course of the investigation;  she cooperated by signing medical authorizations;  thereafter, defendant failed to make a fair, equitable or just settlement offer even though defendant knew that liability was reasonably clear.   She further alleged that she was forced to commence an action against Tischler;  in July 1982, at a settlement conference, she made a just, fair and equitable settlement offer of $125,000;  Tischler consented to the offer, but withdrew such consent because defendant insisted that Tischler pay part of the settlement from his personal funds;  in May 1983 defendant made an offer to settle by allowing judgment to be taken against Tischler for $100,000, which offer was not fair, just, or equitable but was made in an attempt to “lowball plaintiff” and to force her into a settlement lower than that to which she was entitled;  she filed a Code of Civil Procedure section 998 offer in the sum of $124,999.99, to which defendant failed to respond;  defendant attempted to persuade her to take a sum below her offer;  in November 1983, about two months before a January 3, 1984 trial date, defendant offered the sum of $125,000 in full settlement of her claim;  she accepted the offer, refusing to release defendant from any liability for the matter alleged, reserved her rights to bring the instant action, and dismissed her action against Tischler in January 1984.

Defendant generally denied the allegations of the amended complaint and as an affirmative defense alleged:  “Plaintiff settled her malpractice action against Defendant's insured without reserving her rights to bring this action against Defendant.   This action is accordingly barred.”

Defendant moved for summary judgment on the ground that plaintiff failed to reserve her rights to bring her action for unfair claims practices, attaching as an exhibit to defense counsel's declaration the Release of All Claims executed by plaintiff, arguing that the release “reveals no such reservation of rights” and it “expressly applies to all of Dr. Tischler's agents and representatives.”   The minute order states:  “Motion is granted.   Plaintiff did not expressly reserve her rights to claim more in a later bad faith action;  and, therefore, she has no such a cause of action against this defendant because of t[he] prior acceptance of the settlement.  Trujillo v. Yosemite-Great Falls Ins. Co. (1984) ] 153 Cal.App.3d 26 [200 Cal.Rptr. 26].  Rodriguez v. Firemans [Fund Insurance Company, Inc. (1983) ] 142 Cal.App.3d 46 [190 Cal.Rptr. 705].”  Plaintiff appeals from summary judgment entered in favor of defendant.

I

RESERVATION OF RIGHTS

Appellant contends the trial court erred in applying Trujillo v. Yosemite-Great Falls Ins. Co., supra, 153 Cal.App.3d 26, 200 Cal.Rptr. 26, because she claims a bad faith delay in settlement as opposed to a coerced inadequate settlement as alleged in Trujillo;  and urges us to apply a line of authority holding that a plaintiff's failure to plead a reservation of the right to pursue a bad faith action does not render a complaint for unfair claims practices demurrable (Afuso v. United States Fid. & Guar. Co. (1985) 169 Cal.App.3d 859, 864, 215 Cal.Rptr. 490;  see also Vega v. Western Employers Co. (1985) 170 Cal.App.3d 922, 926, 216 Cal.Rptr. 592);  and that the trial court erred in construing the release to apply to defendant whose name was omitted therefrom, and in failing to find a triable issue of fact as to the intent of the parties to the release.

The matter to be determined by the trial court on a motion for summary judgment is whether facts have been presented which give rise to a triable issue.   The court may not pass upon the issue itself.  (Empire West v. Southern California Gas Co. (1974) 12 Cal.3d 805, 808, 117 Cal.Rptr. 423, 528 P.2d 31.)   Summary judgment is proper only if the affidavits in support of the moving party would be sufficient to sustain a judgment in his favor.   Where, as here, the moving party is a defendant he must either negate a necessary element of the plaintiff's case or state a complete defense.  (Parsons Manufacturing Corp. v. Superior Court (1984) 156 Cal.App.3d 1151, 1157, 203 Cal.Rptr. 419.)

 Implicit in respondent's position, and in the trial court's ruling, is the proposition that as a matter of law, settlement with an insured silent as to any bad faith claims against the insurer, constitutes a waiver of the claimant's right to sue the insurer for unfair claims practices.   Yet neither Rodriguez nor Trujillo discusses the issue of what facts establish a waiver or release of the right to bring a bad faith action.   An opinion is not authority for a proposition not therein considered.   (Valentine v. City of Oakland (1983) 148 Cal.App.3d 139, 149, 196 Cal.Rptr. 59.)   It is clear to us that the release of a cause of action against an insured for that insured's negligence or fault does not, by reason of that release alone, insulate that insured's insurer from the consequences of its own separate tortious violations of section 790.03 of the Insurance Code, and its subdivisions.

Here, plaintiff's attorney presented in opposition to the summary judgment motion a declaration, uncontradicted by defendant, that defendant drafted the release and did not include itself as a released party;  that he would not have advised plaintiff to sign it if it had named or otherwise released defendant, that by omitting defendant from the release, he intended to, and did, expressly reserve plaintiff's right to bring the present action.   The release provided in pertinent part that plaintiff “releases and discharges Barry T. Tischler, M.D., and each of his associates, corporations, owners, stockholders ․ agents, directors, officers, partners, employees, representatives, lawyers, and other persons acting by and through, under, or in concert with him, or any of them, of and from, all manner of action or actions, cause or causes of action ․ of any nature whatsoever, known or unknown, fixed or contingent, arising out of, the complaint ․ and said lawsuit, and arising out of any and all medical treatment by Barry T. Tischler, M.D. to Naomi Phillips.”

 As the underlying facts surrounding the execution of the release are not in dispute, this court can make its own independent determination of the meaning of the language used in the instrument under consideration.   (State Farm Mut. Auto Ins. Co. v. Partridge (1973) 10 Cal.3d 94, 100, 109 Cal.Rptr. 811, 514 P.2d 123.)   We find the release to be clear and unambiguous in that its language does not cover defendant either expressly or by implication.   The release applies only to the claims arising out of the medical treatment by Tischler and not to claims that are the subject of this suit.   Thus, the release itself does not provide evidence that plaintiff did not reserve her right to bring a bad faith action against defendant.¹  We decline to find a waiver from mere silence.   As defendant did not present any other evidence on this issue, it did not meet the burden of making a factual showing negating a necessary element of plaintiff's case or stating a complete defense.  (Parsons Manufacturing Corp. v. Superior Court, supra, 156 Cal.App.3d at p. 1157, 203 Cal.Rptr. 419.)   It was error for the court to grant summary Judgment on the issue of reservation of rights.

II

DETERMINATION OF INSURED'S LIABILITY

Respondent contends that although the ground of the lack of a final determination of the insured's liability was not a basis for the summary judgment, the judgment can nevertheless be affirmed on that ground as “[i]t is undisputed in this case that there was never any final determination of the insured's liability to Appellant.”   This issue was not raised below.

 An appellate court must sustain a summary judgment if the trial court's decision is right upon any theory of the law applicable to the case, regardless of the considerations which may have moved the trial court to its conclusion.   (Folberg v. Clara G.R. Kinney Co. (1980) 104 Cal.App.3d 136, 140, 163 Cal.Rptr. 426.)  “But the basis for a summary judgment is the absence of triable fact issues [citation omitted], and if a point is not argued below by the moving party and the record does not establish that the opposing party could not have shown a triable fact issue had the point been raised, the appellate court cannot determine whether the trial court's decision was ‘right’ upon that point.”  (Ibid.)

Rodriguez v. Fireman's Fund Ins. Co., supra, 142 Cal.App.3d 46, 190 Cal.Rptr. 705, in discussing the “question of the need to find liability of the insured” under Nationwide Insurance Co. v. Superior Court (1982) 128 Cal.App.3d 711, 714, 180 Cal.Rptr. 464, stated:  “[A]ccepting the truth of Ms. Rodriguez' allegation that Fireman's Fund has admitted the liability of its insured [citation], a specific finding of the insured's liability is therefore unnecessary.   Further, the complaint alleges admissions of liability exclusive of the formal denial in Fireman's insured's answer.   This becomes a factual issue․  Furthermore, the settlement agreement cannot be construed as an admission, nor can it be a recognition of liability on the part of Fireman's Fund.   However, by demurring to Ms. Rodriguez' complaint in the action against Fireman's, Fireman's Fund admits the specific allegations of its own admissions of its insured's liability.  [Citation.]  Thus, for purposes of resolving the viability of Fireman's demurrer, a specific finding of liability of Fireman's insured was therefore unnecessary.”  (Rodriguez v. Fireman's Fund Ins. Co., supra, 142 Cal.App.3d at p. 55, 190 Cal.Rptr. 705, emphasis added.)

In finding the complaint for unfair claims settlement practices demurrable, the court in Heninger v. Foremost Ins. Co. (1985) 175 Cal.App.3d 830, 221 Cal.Rptr. 303 stated:  “Here there is an absence of any allegation of a final determination of the insured's liability of the insured whether by way of judgment, admission or otherwise.”  (Id., at p. 835, 221 Cal.Rptr. 303, emphasis added.)

 In the instant case, the amended complaint sufficiently raises the issue of whether defendant admitted liability of its insured.   Respondent directs us to the release, which states that “the settlement and this release does not constitute an admission of liability by any person or party”;  however, this does not mean that there may not be other conduct constituting an admission of liability.   Appellant was not given an opportunity in the trial court to present evidence on this issue and the record does not establish she could not have shown a triable issue of fact.   Accordingly, the judgment cannot be affirmed on this new ground.

DISPOSITION

The judgment is reversed.

FOOTNOTES

1.   The issues whether a plaintiff must reserve the right to sue defendant's insurance company in settling a lawsuit against the insured and whether an admission of liability of the insured is a requirement for a bad faith action against the insurer are presently pending before the California Supreme Court, review having been granted on July 31, 1986 in Nelson v. GAB Business Services, Inc. (1986) 179 Cal.App.3d 610 (L.A. 32223);  Moradi-Shalal v. Fireman's Fund Ins. Companies (1986) 181 Cal.App.3d 136 (L.A. 32222);  Appleton v. Chubb Group of Insurance Companies (L.A. 32221) [nonpub. opn.].

LILLIE, Presiding Justice.

THOMPSON and JOHNSON, JJ., concur.