Case Briefs

In Mercury Insurance Co. v. Allstate Insurance Co., 123 Cal. App. 4th 1392 (2004), an insured was involved in an automobile accident. At the time of the accident, the insured had both an automobile insurance policy and a personal umbrella policy. The automobile insurer defended the resulting lawsuit against the insured through its settlement. Thereafter, it brought an action for contribution against the umbrella insurer. It contended that pursuant to California Insurance Code section 11580.9, the umbrella insurer had to pay part of the defense costs. This section provides that when two or more personal policies provide liability insurance applicable to a motor vehicle involved in an accident, “and one policy is primary, and one or more of their personal policies is excess,” then each insurer “shall pay its share of the defense costs.” The umbrella insurer argued that the section applies only to automobile liability policies, but not to a personal umbrella policy.