Key Decisions

March 2013 – The Tortfeasor’s Policy Was Primary

(filed under: Key Decisions Archive | March 22, 2013)

The Tortfeasor’s Policy Was Primary

GuideOne Mutual Insurance Company v. Utica National Insurance Group
(Cal. Ct. of App., 4th Dist.), filed February 28, 2013 


Gary West, while driving his own car, struck and severely injured a motorcyclist, Robert Jester.  At the time, West was working as a pastor for Crosswinds Community Church (Crosswinds) and Christian Evangelical Assemblies (CEA).

Jester and his wife sued West, Crosswinds and CEA for personal injuries.  That action settled for $4.5 million.  West’s personal auto insurer, State Farm, paid its $100,000 policy limits.  Crosswinds’ insurer, GuideOne, paid its $1 million policy limits on a commercial general auto liability policy.  GuideOne also paid its $1 million policy limits on a commercial liability umbrella policy.  CEA’s insurers, Utica, paid its $1 million policy limits on a commercial auto liability policy and $1.4 million out of its $5 million policy limits on a commercial liability umbrella policy.

GuideOne sued Utica for equitable contribution to collect what it felt were overpayments it made in the Jester action.  GuideOne asserted that its contribution to the Jester settlement exceeded its proportionate share of coverage by $600,000.  GuideOne brought a motion for summary judgment, which the court granted.  The trial court determined the priority of coverage for the $4.5 million Jester action settlement amongst the five policies was (1) State Farm’s $100,000 policy; (2) GuideOne’s $1 million primary policy and Utica’s $1 million primary policy; and (3) $400,000 from GuideOne’s $1 million umbrella policy and $2 million from Utica’s $5 million umbrella policy, representing the ratio as to the respective coverage held by GuideOne and Utica under those umbrella policies.


The Court of Appeal reversed.

The appellate court concluded that the trial court erred in awarding GuideOne equitable contribution in the amount of $600,000 from Utica’s umbrella policy.  That figure represented what the trial court felt was GuideOne’s pro rata share of coverage under its own umbrella policy.  This was wrong because an employer is only vicariously liable for the actions of an employee.  As such, all of the insurance policies covering the employee, primary and excess, must be exhausted before the umbrella policy of an insurer that covered only the employer must make a contribution.

Both GuideOne policies were primary and both of Utica’s policies were excess because the GuideOne policies insured West, the tortfeasor, and the Utica policies insured CEA, who was only vicariously liable.


The court held that California Insurance Code section 11580.9 did not establish priority of the excess policies.  As a result, it applied general principles to prioritize the excess policies that insured the tortfeasor before the excess policies covering vicariously liable parties.