Insurer Entitled to Equitable Contribution for Underlying Settlement, Defense

A California appellate court affirmed a verdict that a landlord’s insurer owed 50 percent contribution to a tenant’s insurer for defense and settlement of an underlying suit. The case is Truck Ins. Exchange v. AMCO Ins. Co., 56 Cal. App. 5th 619 (Cal. Ct. App. 2020). 

An auto accident in an intersection sent a vehicle crashing through the front doors of a restaurant, injuring two restaurant patrons. The patrons filed a suit for negligence and premises liability against the restaurant, the restaurant owner, and the couple who owned the property. The complaint alleged the landlords had not taken preventative measures, such as reinforcing the door or installing safety bollards, after a car crashed through the front doors seven years before the incident in the present case. Both the restaurant owner and the landlords sought summary judgment. The court ruled in favor of the restaurant owner because he did not know of the prior incident and could not make changes to the premises without permission from the landlords. The landlords’ motion was denied based on their knowledge of the earlier accident and failure to implement protective measures. The landlords settled the matter with the injured patrons for $750,000.