Judge Ralph C. Hofer, Case Number: 24NNCV05223, Date: 2025-04-11 Tentative Ruling

Plaintiff Alvaro Melendez alleges that in May of 2024, plaintiff was lawfully on premises of a restaurant located in Glendale, commonly known as Din Tai Fung. Plaintiff alleges that prior to and at the time of the incident defendants Glendale I Mall Associates, LP (Glendale I), Glendale II Mall Associates, LLC (Glendale II), Brookfield Properties (USA) LLC (Brookfield), JRM Construction Management, LLC (JRM Construction), Din Tai Fung (Glendale) Restaurant, LLC (Din Tai Fung), and GQ Pool Maintenance LLC (GQ Pool) were the owners, partners and/or entities responsible for maintaining the subject premises in a safe condition, including floors and the area in and about the aisles. Plaintiff alleges that the subject premises were in a dangerous condition, which was created by defendants and their managers and employees, and that defendants also negligently failed to provide sufficient training to their employees, and further failed to post adequate warnings of the dangerous condition.

The complaint alleges that on the date of the incident, and prior thereto, defendants negligently, carelessly and recklessly failed to properly lock the ground doors on the floor of the restaurant, and this condition was known to or should have been known to defendants in sufficient time prior to the incident for defendants to have discovered its dangerous nature and take reasonable measures to make the condition safe. Plaintiff alleges that as a result of the dangerous condition, plaintiff fell to the basement through the ground doors that sprung open, causing plaintiff serious injuries, permanent disability, and damages.

Defendant Glendale I has filed a cross-complaint against Din Tai Fung, GQ Pool and JRM Construction for equitable indemnification, contribution, express indemnity and breach of contract, alleging that the conduct of those parties as cross-defendants resulted in the claims being made against cross-complainant Glendale I, entitling cross-complainant to equitable indemnification and contribution, and that each of the cross-defendants entered into a written contract with cross-complainant in which they expressly agreed to indemnify and defend cross-complainant in this matter.

The cross-complaint by Glendale I also alleges that cross-defendants Response Indemnity Company of California, Liberty Mutual Fire Insurance Company, and Ohio Insurance Company issued policies of insurance providing coverage for the damages allegedly sustained by plaintiff in this instant litigation, and issued a policy or policies of insurance under which cross-complainant qualifies as a named additional insured. The cross-complaint alleges that the policies of insurance require cross-defendants to provide a legal defense to cross-complainant in this instant lawsuit and that by virtue of service of the cross-complaint, cross-complainant tenders its defense to cross-defendants and demands that they indemnify cross-complainant from all damages, costs, and attorneys’ fees incurred in the past, present and/or future by cross-complainant in connection with this matter. The cross-complaint also seeks a declaration of the parties’ respective rights and duties to one other, and specifically that cross-defendants are required to indemnify and hold harmless cross-complainant in the defense of plaintiff’s action and/or the prosecution of the cross-complaint.

“(a) Except as provided in (b), an opinion of a California Court of Appeal or superior court appellate division that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action.”

The opposition concedes that the opinion is unpublished, and indicates that “This case is mentioned because it is relevant to the doctrine at issue in this case.” This contention is not a situation permitted under the statute, or where the doctrine of law of the case can be invoked. The opinion does not concern this case at all; this is not a situation, for example, in which the court of appeal has determined an appeal in this matter on an issue which is now the law of this case. The argument seems to be that since the opinion concerns law that is at issue in this case, it should be considered. Such an argument would obliterate the rule. The opinion is disregarded. The cross-complainant’s counsel admonished for this knowing violation of the court rules.

Response Indemnity argues that the causes of action brought against it, for breach of contract and declaratory relief, are improper, arguing that a liability insurer cannot be joined as a party to the same lawsuit in which its insured is charged with tort liability.

Response Indemnity argues that Glendale I in the cross-complaint improperly has joined its co-defendant Din Tai Fung’s liability insurer as a party to the same lawsuit in which Glendale I and Din Tai Fung are charged with tort liability for the personal injuries of plaintiff Melendez.

As an initial matter, it does not appear from the face of the pleading that moving party is the insurer of Din Tai Fung or that cross-complainant is improperly joining Din Tai Fung’s insurer as a party to the same lawsuit in which Din Tai Fung is charged with tort liability. The cross-complaint clearly alleges that the insurers subject to the fifth and sixth cause of action are being included in the cross-complaint because “Cross-Defendants issued a policy(ies) of insurance under which Cross-Complainant qualifies as a named additional insured.” [Cross-Complaint, para. 38]. There is no mention of Response Indemnity being an insurer of Din Tai Fung, or being pursued based on its insurance relationship with Din Tai Fung.

Under CCP § 430.30(a), an objection to a pleading may be taken by a demurrer "[w]hen any ground for objection to a complaint...appears on the face thereof, or from any matter of which the court is required to or may take judicial notice…"

Even if the pleading did allege that Response Indemnity was in an insurance relationship with Din Tai Fung, which fact is conceded in the opposition, as pointed out in the opposition, the allegation here is that there is a direct first party insurance relationship between Response Indemnity and cross-complainant, as cross-complainant is alleging that as an additional insured it is a direct party to the insurance agreement entered into by Response Indemnity.

The case law relied upon by Response Indemnity appears to apply primarily in the context where a party is attempting to include in a lawsuit an insurer with which the party seeking relief has no direct relationship as an insured. Here, the obligations relied upon run directly from the insurer to Glendale I as a named additional insured. It is not uncommon for a party to include in a lawsuit an insurer which it claims owes that party a direct duty to indemnify and defend, and even to seek to adjudicate the existence of the duty to defend so that the defense of that lawsuit may be assumed while it is ongoing.

The demurrer argues that including the insurer in the same lawsuit in which Din Tai Fung is being pursued for alleged negligence liability would unduly prejudice Din Tai Fung by revealing to the trier of fact the existence of insurance available to Din Tai Fung. Under Evidence Code section 1155:

Response Indemnity relies on Royal Indemnity Co. v. United Enterprises, Inc. (2008) 162 Cal.App.4th 194, 205, which, as pointed out in the opposition, involved a third party claim by a plaintiff, rather than a first party claim by the insured, which is the posture of the instant case.

“Flat Rock acknowledges that “ ‘[g]enerally an insurer may not be joined as a party-defendant in the underlying action against the insured by the injured third party. The fact that an insurer has agreed to indemnify the insured for any judgment rendered in the action does not make the insurer a proper party. Liability insurance is not a contract for the benefit of the injured party so as to allow it to sue the insurer directly.’ [Citation.]” (Royal Surplus Lines Ins. Co., Inc. v. Ranger Ins. Co. (2002) 100 Cal.App.4th 193, 200, 122 Cal.Rptr.2d 459; see Shaolian v. Safeco Ins. (1999) 71 Cal.App.4th 268, 271, 83 Cal.Rptr.2d 702 [the insurer's duties flow to its insured alone].)”

Response Indemnity selectively quotes from this passage, arguing “an insurer may not be joined as a party-defendant in the underlying action against the insured,” omitting the critical context, and the phrase, “by the injured third party.”

As argued in the opposition, it is generally recognized that an insured who claims status as an additional insured under an insurance policy may cross-complain against its own insurance carrier in the same action. Royal Surplus Lines Ins. Co., Inc. v. Ranger Ins. Co., (2002) 100 Cal.App.4th 193, 200. In Royal Surplus, the Second District held that the trial court had erred in sustaining a demurrer without leave to amend on the grounds of misjoinder on the ground it was improper to name both the insured and the insurer in the same action.

“Demurrers on the ground of misjoinder lie only when the defect appears on the face of the complaint or matters judicially noticed. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2002) ¶¶ 7:78–7:83.2.)

Citing Anaya v. Superior Court (1984) 160 Cal.App.3d 228, 206 Cal.Rptr. 520, appellants contend Ranger had no standing to assert misjoinder because it did not make a showing it was prejudiced by the alleged misjoinder. “Although the code seems to authorize the sustaining of a demurrer solely on such a technical objection [of misjoinder], the authorities indicate that the defendant is entitled to a favorable ruling only when he can show some prejudice suffered or some interests affected by the misjoinder. In practical effect, this means that such a demurrer can be successfully used only by the persons improperly joined. A proper defendant is seldom injured by the joinder of unnecessary or improper parties plaintiff or defendant, and his demurrer ought to be overruled.” (Emphasis deleted.) (5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 926, pp. 385–386.)”

“A practice guide explains why an insured and insurer usually may not be sued in the same action. “Generally, an insurer may not be joined as a party-defendant in the underlying action against the insured by the injured third party. The fact that an insurer has agreed to indemnify the insured for any judgment rendered in the action does not make the insurer a proper party. Liability insurance is not a contract for the benefit of the injured party so as to allow it to sue the insurer directly.” (Emphasis deleted.) (Croskey, et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2001) ¶ 15.44.) Ocean, which is not an injured third party, is suing Ranger for breach of contract and breach of the implied covenant. An additional insured has standing to sue an insurer for breach of contract and breach of the implied covenant. (Id., at ¶ 12:56; San Diego Housing Com. v. Industrial Indemnity Co. (1998) 68 Cal.App.4th 526, 536, 80 Cal.Rptr.2d 393.)

Ranger cites no cases in which Royal Globe 's holding has been applied to other than an injured third party claimant nor any case in which a suit by an additional insured against an insured and the insurer was found to be a misjoinder.

Although the Second District in Royal Surplus recognized that there could be prejudice to the other insured arising from the concerns regarding the existence of insurance in cases involving additional insureds, it found that any prejudice could be avoided by careful case management and bifurcation of issues in the action:

“We conclude that although there might be some prejudice to Ultimate if Ranger remains in the action, there is also some possible prejudice to Ocean if Ranger does not. Most of the issues alleged against Ultimate and Ranger concern coverage issues, and the answers to those issues lie in interpretation of the Ranger policy and Agreement and are inextricably intertwined. [emphasis added] (See Geraci v. United Services Automobile Assn., supra, 188 Cal.App.3d 1245, 1251, 233 Cal.Rptr. 896.) Accordingly, possible prejudice is not a sufficient reason to find Ranger was misjoined in this action.

The Royal Surplus opinion also observes that at the hearing the court acknowledged that a separate action could be filed against the insurer, and it would probably be declared a related case. Royal Surplus, at 204. The court of appeal suggested, however, that “rather than apply a hypertechnical rule, the possibility of bifurcation should be explored in this case.” Royal Surplus, at 205.

Here, as argued in the opposition, it would appear that any prejudice urged from the trier of fact being aware of the existence of insurance could be addressed by bifurcation if necessary. As pointed out, it would make more sense to allow this cross-complaint to proceed as alleged, with substantially similar discovery concerning the contractual relationships of the parties and the available insurance to be conducted with respect to the liability and insurance issues in one combined action, and that bifurcation of contractual interpretation of insurance policies, coverage and duties to defend, ordinarily questions for the court, not a jury, could be efficiently and simply accomplished. The opposition suggests that the feared prejudice from the jury being made aware of insurance coverage can be avoided by having the personal injury trial commence, and after the jury makes an award, having the court try the legal issues such as entitlement to indemnification, after the court has already heard the testimony and evidence in the initial trial along with the jury.

The demurrer here is overruled. This court does not find that the demurring party at this stage, which is alleged to have directly insured the cross-complainant, cannot be pursued in this action based on its alleged direct insuring obligations to the cross-complainant.

Counsel for cross-complainant is cautioned that the California Rules of Court strictly prohibit the citation in papers of unpublished opinions in circumstances such as those here. See CRC Rule 8.1115 (“an opinion of a California Court of Appeal or superior court appellate division that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action.”). The unpublished opinion cited and relied upon in the opposition papers is not considered by the Court. Further violation of court rules may result in nonconforming papers not being considered by the Court.

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