Judge Serena R. Murillo, Case 22STCV06438 2023-05-16 Tentative Ruling

Judge: Serena R. Murillo, Case: 22STCV06438, Date: 2023-05-16 Tentative Ruling

Case Number: 22STCV06438 Hearing Date: May 16, 2023 Dept: 31

TENTATIVE

The Unopposed Motion for Leave to Intervene filed by Intervenor Next Insurance, Inc. is GRANTED.

Intervenor Next Insurance, Inc. is ordered to file its Answer in Intervention within ten days.

Intervenor Next Insurance, Inc. is ordered to give notice.

Legal Standard

California Code of Civil Procedure section¿387(a) provides that, “[u]pon¿timely application, any person, who has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both, may intervene in the action or proceeding.¿ An intervention takes place when a third person is permitted to become a party to an action or proceeding between other persons, either by joining the plaintiff in claiming what is sought by the complaint, or by uniting with the defendant in resisting the claims of the plaintiff, or by¿demanding anything adversely to both the plaintiff and the defendant, and is made by complaint, setting forth the grounds upon which the intervention rests, filed by leave of the court and served upon the parties to the action or proceeding who have not appeared in the same manner as upon the commencement of an original action, and upon the attorneys of the parties who have appeared, or upon the party if he has appeared without an attorney, in the manner provided for service of summons or in the manner provided by Chapter 5 (commencing with Section 1010) Title 14 of Part 2.”¿ (Code Civ. Proc., § 387(a).)¿

To establish a direct and immediate interest in the litigation for purposes of permissive intervention, a non-party seeking intervention must show that he or she stands to gain or lose by direct operation of the judgment, even if no specific interest in the property or transaction at issue exists.¿ (Simpson Redwood Co. v. State of California¿(1987) 196 Cal.App.3d 1192, 1201.)¿ “Whether the intervener’s interest is sufficiently direct must be decided on the facts of each case¿. . . .¿And section 387 should be liberally construed in favor of intervention.”¿ (Id.¿at 1200.)¿ “In order that a party may be permitted to intervene it is not necessary that his interest in the action be such that he will inevitably be affected by the judgment.¿ It is enough that there be a substantial probability that his interests will also be so affected.¿ ‘The purposes of intervention are to protect the interests of those who may be affected by the judgment¿. . . .’”¿ (Timberidge¿Enterprises, Inc. v. City of Santa Rosa¿(1978) 86 Cal.App.3d 873, 881-82 (citations and emphasis omitted).)¿

Discussion

Intervenor seeks leave to intervene in this action on grounds that is Defendant Next’s insurer and thus has a direct and immediate interest in this action at it could be exposed to direct liability pursuant to Insurance Code section 11580.

Under California law, an insurance carrier who is not a party to an action can intervene on behalf of its insured when the insurance carrier could be subject to a subsequent action under Insurance¿Code¿section¿11580.¿ (See¿Reliance Ins. Co. v. Superior Court¿(2000) 84 Cal.App.4th¿383, 386,¿(“An insurer’s right to intervene in an action against the insured, for personal injury or property damages, arises as a result of Ins. Code section 11580.”).)¿¿“Section 11580 provides that a judgment creditor may proceed directly against any liability insurance covering the¿defendant, and¿obtain satisfaction of the judgment up to the amount of the policy limits.¿¿Thus, where the insurer may be subject to a direct action under Insurance Code section 11580 by a judgment creditor who has or will obtain a default judgment in a¿third party¿action against the insured, intervention is appropriate.”¿ (Id.;¿see also¿Jade K. v.¿Viguri¿(1989) 210 Cal.App.3d 1459, 1468¿(permitting an insurer to intervene in lawsuit to litigate liability and damage issues).)¿ “‘Intervention may . . . be allowed in the insurance context, where third party claimants are involved, when the insurer is allowed to take over in litigation if its insured is not defending an action, to avoid harm to the insurer.’”¿ (Western Heritage Ins. Co. v. Superior Court (2011) 199 Cal.App.4th 1196, 1205 (quoting Royal Indemnity Co. v. United Enterprises, Inc. (2008) 162 Cal.App.4th 194, 206).)¿

The Court finds there is good cause to permit Intervenor to intervene in this action.

Intervenor issued a commercial general liability insurance policy to Kazem Moghim between August 23, 2021 and August 23, 2022. (Motion, p. 3.) By letter dated July 27, 2022, Intervenor agreed to defend Defendant Guardian in this action under a reservation of rights. (Id.) As a suspended corporation, Defendant Guardian cannot take any action to protect its interests . (Motion, at p. 4; Rev. & Tax Code, § 23301.) Thus, Intervenor could be exposed to direct liability pursuant to Insurance Code section 11580 for a judgement taken against Defendant Guardian. (Motion, at p. 4.) Additionally, Revenue and Taxation Code section 19719 specifically permits an insurer or counsel retained by an insurer on behalf of a suspended corporation to provide a defense for a suspended corporation in a civil action based upon a claim for personal injury, property damage, or economic losses against the suspended corporation. (Id.; Rev. & Tax Code, § 19719(b).) Further, the intervention will not enlarge the issues in the litigation as Intervenor seeks to contest its insured’s liability and damages by asserting the same defenses which would or could have by asserted by Defendant Guardian. (Motion, p. 5.) Lastly, no opposition has been filed by the parties in this action, and Intervenor submitted a copy of its “Complaint in Intervention,” as required by California Code of Civil Procedure 387(c). (Letulle Decl., ¶ 3; Ex. “A.”)

Therefore, the Motion for Leave to Intervene is GRANTED.

The Court notes that as Intervenor is asserting defenses on behalf of its insured, the “Complaint in Intervention” attached to the Declaration of Letulle should be captioned as an Answer in Intervention. Intervenor is ordered to file its Answer in Intervention within ten days.

Moving party is ordered to give notice.

Conclusion

The Motion for Leave to Intervene filed by Intervenor Next Insurance, Inc. is GRANTED.

Intervenor Next Insurance, Inc. is ordered to file its Answer in Intervention within ten days.

Intervenor Next Insurance, Inc. is ordered to give notice.