November 10, 2016
The following is our summary of the Supreme Court’s actions on petitions for review in civil cases from the Court’s conference on Wednesday, November 9, 2016. The summary includes those civil cases in which (1) review has been granted, (2) review has been denied but one or more justices has voted for review, or (3) the Court has ordered depublished an opinion of the Court of Appeal.
Hayward v. Superior Court, S237174 — Review Granted — November 9, 2016
The case includes the following issues: (1) Does a party waive disqualification of a temporary judge when counsel is aware of a potential conflict and proceeds with the temporary judge presiding? (See People v. Johnson (2015) 60 Cal.4th 966.) (2) May an appellate court set aside a settlement agreement on the ground that a disqualified judge’s rulings “tainted” the settlement as a matter of law when factual questions exist concerning the extent to which those rulings influenced a party’s decision to settle?
In a long 2-1 published opinion, Hayward v. Superior Court (2016) 2 Cal.App.5th 10, the Court of Appeal, First District, Division Two, held: (1) the rulings and orders issued by an attorney acting as a temporary judge are all void and must be vacated; (2) a settlement agreement signed by the parties prior to disqualification of the temporary judge was tainted by the disqualifying conduct of the temporary judge and therefore cannot be enforced and; (3) the temporary judge’s verbal disclosure to a party of the disqualifying relationship does not waive the disqualification; waiver had to recite the basis for the disqualification and be signed by the parties and their attorneys; and (4) the conduct of the disqualified temporary judge did not taint the proceedings before the superior court judge who replaced her.
Ace American Ins. Co. v. Fireman’s Fund Ins. Co., S237175 — Review Granted — November 9, 2016
The case presents this issue: When a primary insurer unreasonably refuses to settle an underlying action against its insured within policy limits and the underlying action later settles for the full amount of the primary policy as well as the full amount of an excess insurer’s policy, can the excess insurer maintain an equitable subrogation action against the primary insurer to recover the amount it expended in settlement?
In a published opinion, Ace American Insurance Company v. Fireman’s Fund Insurance Company (2016) 2 Cal.App.5th 159, the Court of Appeal, Second District, Division Four, held that because the excess insurer alleged it was required to contribute to the settlement of the underlying case due to the primary insurer’s failure to reasonably settle the case within policy limits, the lack of an excess judgment against the insured in the underlying case did not bar an action for equitable subrogation and breach of the duty of good faith and fair dealing.
Review Denied (with dissenting justices)