Case Number: BC669289 Hearing Date: March 22, 2018 Dept: 92

MIGUEL JARA,

Plaintiff(s),

vs.

JOSHUA GUZMAN, ET AL.,

Defendant(s).

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CASE NO: BC669289

[TENTATIVE] ORDER GRANTING INTERVENOR’S MOTION FOR LEAVE TO INTERVENE

Dept. 92

1:30 p.m.

March 22, 2018

1. Background Facts

Plaintiff, Miguel Jara filed this action against Defendants, Joshua Guzman and Nicole T. Valdez for damages arising out of an automobile accident. Plaintiff filed his complaint on 7/20/17. On 8/24/17, Plaintiff filed a proof of service of the summons and complaint. The proof of service shows Plaintiff served Defendant, Guzmen via substitute service on 8/12/17. On 10/11/17, the Clerk entered Guzman’s default. To date, Plaintiff has not filed proof of service of the summons and complaint on Valdez. To date, no default judgment has been entered.

2. Motion for Leave to Intervene

At this time, Coast National Insurance Company moves for leave to intervene in the case. In Jade K. v. Viguri (1989) 210 Cal.App.3d 1459, the Court was faced with a very similar situation. The trial court entered default judgment against the medical provider defendant. Thereafter, the defendant’s insurance company moved for leave to intervene and to set aside the default judgment. The trial court considered and granted the motion for leave to intervene, but denied the motion to set aside the default judgment. The court of appeals affirmed the ruling granting the motion for leave to intervene, but reversed the ruling denying the motion to set aside the judgment; the court of appeals held that the judgment should have been set aside; notably, relief from default is not currently at issue.

Per CCP §387(a), permissive intervention is proper if:

• The nonparty has a direct and immediate interest in the litigation; and

• The intervention will not enlarge the issues in the case; and

• The reasons for intervention outweigh any opposition by the existing parties.

A liability insurer normally cannot intervene in a tort action against its insured to contest whether the claim against the insured is covered under its policy. The judgment in the tort action collaterally estops the insurer only on issues necessarily adjudicated therein—i.e., the insured’s liability and the amount of the injured party’s damages. It does not bind the insurer on coverage issues. Western Heritage Ins. Co. v. Sup.Ct. (2011) 199 Cal.App.4th 1196, 1212. However, because a liability insurer agrees to pay any judgment obtained against its insured (see Ins.C. § 11580(b)(2)), it has the right to intervene (not merely permissive) where an insured is barred from defending itself. In such cases, intervention is necessary to protect the insurer’s own interests because it may be obligated to pay any judgment rendered against its insured (assuming no coverage defenses). Reliance Ins. Co. v. Sup.Ct. (2000) 84 Cal.App.4th 383, 386–387. In this case, the Court finds Coast adequately established a direct and immediate interest in the litigation.

Notably, Plaintiff argues there is no direct and immediate interest in the litigation because Guzman is in default, but no default judgment has been entered. Plaintiff fails to cite any authority to support this position.

The next issue is whether intervention will enlarge the issues in the case. It will not; the issues remain the same – whether Defendant is liable to Plaintiff for the accident at issue, and the extent of Plaintiff’s damages. Plaintiff argues intervention will expand these issues, but fails to show how it would do so.

The final issue is whether the reasons for intervention outweigh any opposition by the existing parties. In this case, the reasons for intervention clearly outweigh the interest in opposing the motion. Coast may be required to pay any judgment against its insured, and has an interest in being a party to the case. Plaintiff’s arguments in opposition to the motion all center around the issue of whether Coast should have taken some other path to protect its rights, such as seeking a stipulation to set aside the default or filing a motion to set aside the default. While Coast may have multiple options concerning how it defends this case, Plaintiff failed to show that moving for leave to intervene was improper.

Finally, the Court notes that in Clemmer v. Hartford Ins. Co. (1978) 22 Cal.3d 865, the Supreme Court held that an insurance company that knows about and fails to participate in a wrongful death action is bound by the jury’s verdict in that action. The Court was not specifically considering intervention. However, to the extent Clemmer considered intervention, it held that the insurance company should have sought to intervene after the default was entered, holding:

Even if it be conceded that the insurer had little opportunity to make an intelligent entry into the case by way of intervention or otherwise when, on the day before the default hearing, it first received notice of the action, it nevertheless had an opportunity for a reasonable period, up to six months thereafter, to assume control and management of the suit by way of an application for relief pursuant to Code of Civil Procedure section 473. Its failure to take advantage of this opportunity requires that the instant contention be resolved against it.

Intervener adequately made a showing that leave to intervene is necessary. Plaintiff failed to articulate any reason why leave to intervene should be denied. The motion for leave to intervene is therefore granted. Intervener is ordered to file a separate copy of its complaint-in-intervention within five days.