Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County, No. GIC819707 Kevin A. Enright, Judge. Affirmed.
McDONALD, J.
National Continental Insurance Company (NCIC) paid certain attorney fees incurred to defend Campbell Industries (Campbell) in an underlying lawsuit against Campbell. Campbell was insured under insurance policies issued by NCIC and under insurance policies issued by National Union Fire Insurance Company of Pittsburgh, Pa. (National Union). In this action, NCIC sought equitable contribution from National Union for a portion of the attorney fees paid by NCIC, and the court entered judgment that National Union pay NCIC 50 percent of certain attorney fees incurred by Campbell in the underlying lawsuit together with prejudgment interest. National Union appeals that judgment.
I
FACTUAL AND PROCEDURAL BACKGROUND
A. The Underlying Lawsuit
During the 1970's and 1980's, Campbell operated a shipyard on property leased from the Port District of San Diego (the Port). Campbell's operations during this period were insured by NCIC, National Union, and four other insurance companies.
In 2003, the Port filed an action against ExxonMobil Corporation alleging its operations at the Port caused environmental damage. ExxonMobil filed a cross-complaint against Campbell seeking contribution and indemnity for the amounts claimed by the Port for remediating the shipyard site.
B. The Tender of the Defense and Responses
Campbell hired the law firm of Latham & Watkins (Latham) to defend Campbell in the underlying lawsuit, and in June 2003 Campbell tendered defense of the action to all six of its insurance companies, including National Union and NCIC. All of the insurers eventually accepted the tender of the defense, subject to a reservation of rights. National Union did not accept the tender (subject to a reservation of rights) until mid-November 2003 and NCIC (although it had agreed by December 2003 to pay some portion of the capped fees to defend Campbell) did not accept the tender until August 2004.
When an insurer accepts the tender of the defense subject to a reservation of rights, Civil Code section 2860 (§ 2860) requires the insurer to pay for the insured's independent counsel at "rates which are actually paid by the insurer to attorneys retained by it in the ordinary course of business in the defense of similar actions in the community where the claim arose or is being defended." (§ 28660, subd. (c).) The parties have employed the term "below-the-cap fees" to refer to that portion of the fees charged by Latham within the rate schedule described by section 2860, and have employed the term "above-the-cap fees" to refer to that portion of the fees charged by Latham above the rates described by section 2860. When National Union accepted Campbell's tender, it notified Campbell that it would participate with the other insurers in funding the defense provided by Latham subject to the provisions of section 2860.
C. Campbell's Suit Against National Union and NCIC
In October 2003 Campbell filed a lawsuit (the coverage lawsuit) against National Union and NCIC, alleging they did not timely respond to the tender of the defense. Campbell pleaded claims against National Union and NCIC, but not the remaining insurers, asserting breach of contract and seeking declaratory relief. National Union cross-complained against NCIC and the other four insurers (although National Union ultimately dismissed that cross-complaint), and NCIC cross-complained against National Union. Both cross-complaints sought equitable contribution from each other.
The remaining four insurers had apparently accepted the tender prior to October 20, 2003.
D. The Intra-insurers' Negotiations and Ultimate Allocation Agreement
In late 2003, the six insurers began negotiating the allocation of Campbell's attorney fees among themselves, and by December 2003 reached a tentative agreement on allocation of the below-the-cap fees. However, it was not until February 2005 (eight months after National Union withdrew its reservation of rights) that the insurers executed a final written agreement (the Allocation Agreement) apportioning the below-the-cap fees among themselves. Under the Allocation Agreement, the insurers agreed that each would pay a specified percentage of the total amount of below-the-cap fees and costs incurred prior to July 17, 2004, to defend Campbell. It also provided that each insurer reserved the right to seek contribution from each other for either above-the-cap or below-the-cap amounts paid as fees or costs incurred after July 17, 2004.
National Union also reserved the right to (1) seek contribution from NCIC with regard to above-the-cap fees already paid by National Union, and (2) seek contribution from the other four insurers with regard to above-the-cap fees already paid by National Union if any of those insurers were sued by Campbell and were determined to have an obligation to pay Latham at above-the-cap rates.
In March 2004, National Union informed Latham that it would pay all accrued and unpaid below-the-cap fees through the January 2004 billing, and would also pay 100 percent of below-the-cap fees going forward, and would arrange to collect (as reimbursement to National Union) the portions owed by the other insurers for past and future below-the-cap fees.
E. Campbell's Interim Successes in the Coverage Lawsuit
In March 2004, Campbell filed a motion seeking summary adjudication that National Union had a duty to defend in the underlying lawsuit. In May 2004, National Union filed a petition to compel arbitration, pursuant to section 2860, concerning the hourly rates to be paid to Latham. The trial court ultimately ruled in Campbell's favor on these motions, finding (1) National Union had a duty to defend Campbell, and (2) National Union's delay in accepting its defense obligations waived its rights to arbitrate the reasonableness of independent counsel's fees.
A few days earlier, National Union also informed Latham it had approved and would pay the outstanding amount of Latham's billed invoices, including the above-the-cap fees billed by Latham, but that such payment was subject to National Union's right to dispute the reasonableness of the fees or any rights National Union had under section 2860.
F. National Union's Attempt To Replace Latham
On June 17, 2004, while the motions were pending in the coverage lawsuit, National Union withdrew its reservation of rights and informed Campbell that because the withdrawal eliminated the need to provide "Cumis" counsel, National Union had chosen a new law firm (Gordon & Rees) to provide a defense for Campbell in the underlying lawsuit. National Union stated it would pay Latham's fees for 30 more days after Latham's receipt of its letter to allow a smooth transfer of the defense from Latham to Gordon & Rees.
San Diego Federal Credit Union v. Cumis Ins. Society, Inc. (1984) 162 Cal.App.3d 358.
Latham responded by informing National Union that Campbell would not agree to changing counsel, asserting (1) National Union's breach entitled Campbell to select counsel of its own choosing, and (2) National Union's belated withdrawal of the reservation of rights was ineffective to require Campbell to consent to changing counsel in mid-stream to the attorneys selected by National Union. Campbell also expressed concerns that its rights could be impaired if Gordon & Rees continued to attempt to act as counsel for Campbell, considering (among other things) the extensive work performed by Latham to defend Campbell since the inception of the underlying lawsuit.
There was substantial evidence that, by the time National Union withdrew its reservation of rights, Latham had already performed extensive work to defend Campbell, including developing experts and theories of defense, conducting and reviewing discovery and preparing for mediation; there was also substantial evidence the underlying litigation was very complicated. Campbell had a longstanding relationship with Latham, and Latham's lead counsel had extensive expertise in environmental contamination litigation.
G. Campbell Settles the Underlying Lawsuit and the Coverage Lawsuit
After National Union unsuccessfully sought to replace Latham with Gordon & Reese, National Union apparently stopped contributing to the legal fees to defend Campbell in the underlying lawsuit, and NCIC undertook to pay a larger share of the below-the-cap fees and eventually paid the bulk of the above-the-cap fees incurred after July 2004. The trial court found, and National Union does not dispute, that by the end of the underlying litigation NCIC paid $1,494,258.50 for Latham's above-the-cap fees.
In October 2006 Campbell and the Port reached a settlement of the underlying action, under which Campbell paid the Port the aggregate amount of $3 million, funded by the various insurers. Contemporaneously, Campbell settled its coverage lawsuit and disputes with National Union and NCIC, and thereafter dismissed its complaint against National Union and NCIC with prejudice.
II
THE PRESENT DISPUTE AND JUDGMENT
A. The Remaining Dispute
Although Campbell dismissed its complaint in the coverage lawsuit, NCIC's and National Union's cross-complaints against each other in that action, seeking declaratory relief and indemnity or equitable contribution, remained pending. After settling with Campbell, National Union dismissed its cross-complaint against NCIC, but NCIC continued to pursue its claims against National Union.
National Union's cross-complaint originally named all of the other five insurers. However, after it ceased participating in funding Campbell's defense, National Union dismissed its cross-complaint against all the other insurers except NCIC. NCIC originally contemplated filing a cross-complaint against all of the other insurers, but ultimately limited its cross-complaint to its claims against National Union.
At trial, NCIC contended that National Union should equitably be required to bear 50 percent of all above-the-cap attorney fees incurred by Campbell in defense of the underlying lawsuit. NCIC asserted that, because it had paid nearly $1.5 million for above-the-cap attorney fees while National Union paid only approximately $330,000 toward the total amount of above-the-cap attorney fees, it was entitled to contribution from National Union in the approximate amount of $550,000 to equalize between each the contributions toward above-the-cap attorney fees. National Union contended (1) any obligation it may have had for above-the-cap attorney fees was extinguished when it withdrew its reservation of rights in July 2004, and (2) even if its duty to pay a portion of above-the-cap attorney fees was not extinguished, it had no remaining liability because its share of those fees was limited to the percentage set forth in the Allocation Agreement and its payments had already exceeded its agreed 16.7 percent share.
B. The Judgment
The trial court found both NCIC and National Union were obligated to provide a defense for Campbell, each was barred from relying on section 2860 to cap the fees charged by Latham for Campbell's defense, the amount charged by Latham as above-the-cap attorney fees was not unreasonable, and NCIC had paid substantially more than one-half of the total amount of above-the-cap attorney fees charged by Latham during the course of the defense in the underlying lawsuit. The court, responding to National Union's objections to the proposed statement of decision, further rejected its claim that the Allocation Agreement precluded any finding the above-the-cap attorney fees would be shared equally between National Union and NCIC or otherwise limited NCIC from seeking equitable contribution from National Union for 50 percent of above-the-cap attorney fees. The court also declined National Union's request for findings that (1) the other four insurers were also liable for above-the-cap attorney fees, and (2) NCIC must pursue contribution from each of the other four insurers rather than from National Union, concluding those insurers were not parties to the present action and, to the extent National Union sought determinations that such insurers were equally liable for above-the-cap attorney fees, National Union had waived that claim by failing to bring those insurers into the declaratory relief action. The court ruled that, on the facts of this case, it was equitable for NCIC and National Union to share equally in the liability for above-the-cap attorney fees.
On appeal, National Union does not contest any of these findings or conclusions.
The trial court ordered National Union to pay $564,119.75 to NCIC as the remaining balance on National Union's 50 percent share of the above-the-cap attorney fees. The court also awarded prejudgment interest in the amount of $78,309.20, plus costs, to NCIC. National Union timely appealed.
III
APPLICABLE LEGAL PRINCIPLES
A. Equitable Contribution Among Insurers
When several insurers are obligated to indemnify or defend the same loss or claim, and one insurer has paid more than its share of the loss or defense costs, that insurer may seek equitable contribution from its coinsurers. (Low v. Golden Eagle Ins. Co. (2002) 101 Cal.App.4th 1354, 1361.) The law permits reimbursement to the insurer that paid more than its proportionate share of the obligation to "equaliz[e] the common burden shared by coinsurers, and to prevent one insurer from profiting at the expense of others." (Fireman's Fund Ins. Co. v. Maryland Casualty Co. (1998) 65 Cal.App.4th 1279, 1293.)
There is no fixed or definitive formula for calculating each insurer's proportionate share of the obligation. (Signal Companies, Inc. v. Harbor Ins. Co. (1980) 27 Cal.3d 359, 369.) Instead, the allocation of defense costs between coinsurers is an equitable matter for the trial court. (See Maryland Casualty Co. v. Nationwide Mutual Ins. Co. (2000) 81 Cal.App.4th 1082, 1094 ["[t]he proper allocation of costs is within a trial court's broad discretion"]; Hartford Casualty Ins. Co. v. Travelers Indemnity Co. (2003) 110 Cal.App.4th 710, 724.) The courts have long recognized that " ' "From the very nature of equity, a wide play is left to the conscience of the chancellor in formulating his decrees." ' [Citation.]" (Dieden v. Schmidt (2002) 104 Cal.App.4th 645, 654 [discussing equitable subrogation]; see also Centennial Ins. Co. v. United States Fire Ins. Co. (2001) 88 Cal.App.4th 105, 111 ["[i]n choosing the appropriate method of allocating defense costs among multiple liability insurance carriers, each insuring the same insured, a trial court must determine which method of allocation will most equitably distribute the obligation among the insurers 'pro rata in proportion to their respective coverage of the risk' "].) "In evaluating competing claims for equitable contribution, the trial court exercises its discretion to weigh the equities to ' " 'accomplish ultimate justice.' " ' [Citation.]" (Hartford Casualty Ins. Co. v. Travelers Indemnity Co., supra.)
B. Standard of Review
A judgment is presumed correct, and all intendments and presumptions are indulged in favor of its correctness, and must be upheld if it is supported by substantial evidence. (Fire Ins. Exchange v. American States Ins. Co. (1995) 39 Cal.App.4th 653, 658.) Moreover, because "resolution of this conflict... involves consideration of the equities of the case, we use the abuse of discretion standard of review to [examine] the determination in this case." (Hartford Casualty Ins. Co. v. Travelers Indemnity Co., supra, 110 Cal.App.4th at p. 724 .) " 'While the concept "abuse of discretion" is not easily susceptible to precise definition, the appropriate test has been enunciated in terms of whether or not the trial court exceeded " 'the bounds of reason, all of the circumstances before it being considered....' " [Citations.]' [Citation.] 'A decision will not be reversed merely because reasonable people might disagree. "An appellate tribunal is neither authorized nor warranted in substituting its judgment for the judgment of the trial judge." [Citations.] In the absence of a clear showing that its decision was arbitrary or irrational, a trial court should be presumed to have acted to achieve legitimate objectives and, accordingly, its discretionary determinations ought not be set aside on review.' [Citation.]" (Gouskos v. Aptos Village Garage, Inc. (2001) 94 Cal.App.4th 754, 762.)
National Union, although acknowledging that we ordinarily apply the deferential abuse of discretion standard to decisions on equitable contribution, asserts an abuse of discretion exists as a matter of law when the trial court does not exercise its discretion in considering the equities of the case. It is true that a "ruling otherwise within the trial court's power will nonetheless be set aside where it appears from the record that in issuing the ruling the court failed to exercise the discretion vested in it by law" (People v. Penoli (1996) 46 Cal.App.4th 298, 302) because the "[f]ailure to exercise a discretion conferred and compelled by law constitutes a denial of a fair hearing and a deprivation of fundamental procedural rights, and thus requires reversal." (Id. at p. 306.) However, the burden rests on the appellant affirmatively to demonstrate error (Williams v. Russ (2008) 167 Cal.App.4th 1215, 1224), and a mere disagreement with the manner in which discretion was exercised is inadequate to show the trial court did not exercise its discretion. (Cf. People v. Lewis and Oliver (2006) 39 Cal.4th 970, 1062-1063.) Because the trial court here was apparently well acquainted with the legal principles guiding its determination, and it articulated the factual and legal basis for its conclusions cognizant of those principles, we are not persuaded by National Union's implied argument that reversal is required as a matter of law because of the alleged failure by the trial court to exercise the discretion vested in it.
IV
ANALYSIS
A. The Allocation
We conclude the trial court did not abuse its discretion by finding National Union and NCIC should each be responsible for one-half of the above-the-cap attorney fees charged by Latham for defending Campbell in the underlying lawsuit. The trial court found both NCIC and National Union were obligated to provide a defense for Campbell, the fact these insurers did not timely respond to the tender of the defense barred them from relying on section 2860 to cap the fees charged by Latham for the defense, and the amount charged by Latham as above-the-cap attorney fees was not unreasonable. National Union neither challenges these findings on appeal nor asserts these findings are insufficient to require each of the litigants to bear some portion of the above-the-cap attorney fees.
National Union's primary contention on appeal is that it was error to divide the amount of above-the-cap fees equally between National Union and NCIC. Instead, National Union argues its liability "is limited to its proportionate share of the above-the-cap fees, as allocated among all six insurers, because, to the extent National Union owed a duty to pay above-the-cap fees, all the insurers shared that duty." In essence, National Union asserts that because there was no substantial evidence from which the trial court could have concluded NCIC and National Union were differently situated from the other four insurers as to liability for above-the-cap fees, there was no substantial evidence from which the trial court could have concluded NCIC and National Union were alone liable for above-the-cap fees.
However, there was evidence from which the trial court could have concluded National Union and NCIC were differently situated from the other four insurers regarding liability for above-the-cap fees. First, National Union cites no evidence suggesting any of the other four insurers did not timely respond to Campbell's tender of the defense and, to the contrary, the evidence showed at least two of the other insurers accepted the tender relatively promptly. In contrast, the evidence showed National Union and NCIC did not accept the tender promptly and, to the contrary, National Union and NCIC (unlike the other insurers) waited until after Campbell had filed the coverage lawsuit against them (alleging they did not timely respond to the tender of the defense) before accepting the tender of the defense. Accordingly, at least insofar as the basis upon which Campbell premised its argument for waiving the "capping" effect of section 2860 (and hence any liability for above-the-cap fees), the evidence permitted the conclusion that the other insurers were differently situated from National Union and NCIC as to above-the-cap attorney fees.
National Union argues that because the trial court found an insurer "must meet its duty to defend [obligations]" to obtain the benefits of section 2860's capping provisions, the trial court necessarily found that all of the insurers lost the benefit of section 2860 because none of the insurers satisfied their obligation. However, National Union elected not to pursue its claims against the other insurers, or to claim (in defense of NCIC's claim) that necessary parties were absent. Accordingly, there was no litigation with the party or parties (e.g. the other four insurers) that National Union claims the trial court necessarily found had also lost the benefit of the capping provisions, and National Union cites no law that would permit such a finding to be entered against an absentee insurer. Additionally, the only evidence cited by National Union to show these insurers breached their obligation to defend is that only partial payments of Latham's bills had been made by the insurers prior to mid-2004. Although there is some evidence Latham's bills were in arrearage, there is no dispute the other four insurers had relatively promptly assured Campbell that they would provide a defense, and National Union cites no law suggesting it is the former rather than the latter that is the litmus test for whether an insurer has satisfied its duty to defend.
Second, unlike the other insurers, National Union and NCIC were the only insurers against whom Campbell had filed suit, providing additional evidence from which the trial court could conclude the other insurers were differently situated from National Union and NCIC as to above-the-cap attorney fees. Although National Union correctly cites numerous cases for the proposition that Campbell's decision to pursue only National Union and NCIC is not dispositive on which of multiple coinsurers should bear the loss (see Fireman's Fund Ins. Co. v. Maryland Casualty Co., supra, 65 Cal.App.4th at p. 1295 [where multiple insurers share equal contractual liability "the selection of which indemnitor is to bear the loss should not be left to the often arbitrary choice of the loss claimant"]; accord, GEM Developers v. Hallcraft Homes of San Diego, Inc. (1989) 213 Cal.App.3d 419, 428-431; Yamaha Motor Corp. v. Paseman (1990) 219 Cal.App.3d 958, 970-971), those cases stand primarily for the proposition that when an insurer claims other coinsurers should bear a portion of the loss, the remedy available to such insurer is to "bring a cross-action seeking comparative equitable indemnity from the [alleged co-obligor] by alleging and proving, if it can, the [co-obligor's conduct] either contributed to or solely caused" the loss. (Yamaha Motor Corp., at p. 971; accord, GEM Developers, supra, at p. 430 [party claiming others should be required to contribute to loss has "right to seek equitable indemnity from parties not named by the plaintiffs through filing a cross-complaint for equitable indemnification"].) National Union elected not to join the other insurers to prove they were equally liable based on their conduct towards Campbell, and thus cannot complain the trial court erred by not adjudging them equally responsible for above-the-cap attorney fees. Finally, National Union was the only insurer against whom an adverse ruling was entered by the trial court, which determined National Union could not invoke the capping provisions of section 2860, providing further evidence from which the trial court could conclude the other insurers were differently situated from National Union as to above-the-cap attorney fees.
Additionally, there was some evidence from which the trial court could conclude the parties themselves accepted they were differently situated from the other four insurers insofar as Campbell sought to collect above-the-cap attorney fees. First, although National Union's cross-complaint originally named (and sought equitable contribution from) NCIC and the other four insurers, it dismissed the other four insurers approximately seven months later and continued to pursue its equitable contribution claim (for an additional two years and three months) solely against NCIC. Second, when the insurers agreed on the Allocation Agreement, National Union expressly reserved the right to seek contribution from NCIC for above-the-cap attorney fees it had paid but only reserved a similar right against the other insurers if the other insurers "are sued by Campbell and determined in such proceedings to have an obligation to [pay above-the-cap attorney fees]." Finally, when it sought to obtain contribution to recoup part of the amounts it paid for above-the-cap attorney fees, National Union made demand only on NCIC, and asserted NCIC and National Union were liable for 50 percent of the above-the-cap attorney fees.
National Union cites one case, Alberding v. Brunzell (9th Cir. 1979) 601 F.2d 474, to support its argument that a court's grant of contribution to the plaintiff from the joined defendant, where the amount awarded necessarily rejects the defendant's claim that absentee co-obligors were allegedly liable for a portion of the joint obligation to reduce the amount owed by the defendant, is an abuse of discretion. In Alberding, there were four co-sureties on a promissory note and one surety (Alberding) was required to pay the entire guaranteed amount. Alberding then sued one of the other sureties (Brunzells) in Brunzells' home state of Nevada, but the trial court ordered that the Brunzells were only required to pay their one-fourth share of the obligation. (Id. at pp. 475-476.) The Alberding court affirmed, but it also recognized that "[a]lthough generally a cosurety is not liable for more than his prorata share of the debt, the rule has been repeatedly stated that if some of the cosureties are insolvent or beyond the jurisdiction of the court, they will be excluded from the calculation and the entire burden distributed among the ones remaining. [Citations.] The justification for this approach seems to be that if one surety has paid more than his share, it is unfair to place on him the full burden of pursuing all the other cosureties." (Id. at p. 478, italics added.) Indeed, while Alberding recognized that "[t]he vast majority of cases and commentators assert without qualification that absent cosureties are to be excluded from the calculation" (ibid., italics added) in such a contribution action, Alberding departed from the general rule and upheld the trial court's exercise of discretion on the facts and circumstances applicable to that case.
Although National Union also cites the language of Centennial Ins. Co. v. United States Fire Ins. Co., supra, 88 Cal.App.4th 105, in which the court stated that "[i]n choosing the appropriate method of allocating defense costs among multiple liability insurance carriers, each insuring the same insured, a trial court must determine which method of allocation will most equitably distribute the obligation among the insurers 'pro rata in proportion to their respective coverage of the risk,' as 'a matter of distributive justice and equity' [citation]" (id. at p. 111), those observations were not made in the case where the alleged proportionate responsibility of an absentee insurer was employed to reduce the amount of contribution among the parties to the litigation. Indeed, to the extent Centennial is relevant, the court there reiterated that no single definitive rule applies, and the goal of apportionment is to reach "the most equitable result based on the given facts and circumstances of a particular case" (id. at p. 113), including considerations such as "the nature of the given claim [and] the relation of the insured to the several insurers" (id. at p. 116), and those factors appear to support rather than undermine the trial court's ruling here.
Alberding is factually distinguishable from the instant case because it was apparently undisputed that all of the cosureties there were equally obligated on the underlying debt, although here there is substantial evidence from which a trial court could conclude some or all of the other four insurers were not equally liable for above-the-cap fees. Additionally, Alberding expressly recognized it was departing from the general rule regarding apportionment because of the unique facts presented, but National Union provides no similar basis for departing from that general rule. Finally, we note that Alberding has never been cited for this proposition by any California court, and it does not appear Alberding has been followed on this point by any published decision from any jurisdiction. We decline National Union's invitation to conclude the trial court here abused its discretion by failing to apply Alberding's aberrant approach in this case.
B. The Award of Prejudgment Interest
National Union also asserts, even if the trial court properly allocated one-half of the above-the-cap attorney fees to National Union, it was error to award prejudgment interest on that amount because the amount it owed was not certain or capable of being made certain until after entry of judgment. NCIC asserts prejudgment interest was proper because the amount paid for above-the-cap fees was not in dispute, and the only issue was whether National Union was liable for one-half of that amount.
Civil Code section 3287, subdivision (a), provides: "Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day...." The courts have explained that "[u]nder section 3287, subdivision (a) the court has no discretion, but must award prejudgment interest upon request, from the first day there exists both a breach [or other accrued cause of action] and a liquidated claim. [Citation.]" (North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828.) An award of section 3287, subdivision (a), prejudgment interest is not dependent on the type of cause of action such as contract or tort, "but rather whether the damages were readily ascertainable." (Levy-Zentner Co. v. Southern Pac. Transportation Co. (1977) 74 Cal.App.3d 762, 795.) Importantly, "a defendant's denial of liability does not make damages uncertain for purposes of Civil Code section 3287. [Citations.]" (Wisper Corp. v. California Commerce Bank (1996) 49 Cal.App.4th 948, 958 (Wisper); Credit Managers' Assn. v. Brubaker (1991) 233 Cal.App.3d 1587, 1595.)
In Esgro Central, Inc. v. General Ins. Co. (1971) 20 Cal.App.3d 1054, the court explained that "[d]amages are deemed certain or capable of being made certain within the provisions of subdivision (a) of section 3287 where there is essentially no dispute between the parties concerning the basis of computation of damages if any are recoverable but where their dispute centers on the issue of liability giving rise to damage." (Esgro, at p. 1060.) In Wisper, we reaffirmed that principle, stating: "[I]t is clear that Civil Code section 3287 looks to the certainty of the damages suffered by the plaintiff, rather than to a defendant's ultimate liability, in determining whether prejudgment interest is mandated. An award of prejudgment interest is intended to make the plaintiff whole 'for the accrual of wealth which could have been produced during the period of loss.' [Citation.]" (Wisper, supra, 49 Cal.App.4th at p. 958.)
National Union argues that Wisper precludes the award of prejudgment interest whenever a defendant, in addition to disputing its liability, additionally contends that "if liable, its liability in proportion to that [of the other parties]" (Wisper, supra, 49 Cal.App.4th at p. 961) must be resolved on disputed facts. However, even disregarding the legal distinctions between Wisper and the present action, this court in Wisper expressly concluded it was the significant discrepancy between the large amount sought by the plaintiff and the small amount eventually awarded based on the comparative fault attributed to the litigating parties that militated against finding the damages were certain or capable of being made certain. Wisper then cautioned that "[u]ndoubtedly, there may be cases in which a plaintiff who recovers virtually all of the claimed damages, except for a minor percentage based on his or her comparative fault, would still be entitled to an award of prejudgment interest." (Wisper, supra, 49 Cal.App.4th at p. 962, italics added.)
Although National Union also cites Sagadin v. Ripper (1985) 175 Cal.App.3d 1141 as holding it is error to award prejudgment interest in an equitable contribution action where the recovery depends on the results of the contested trial, Sagadin only concluded it was error to award prejudgment interest to a settling tortfeasor on its indemnity claim against the nonsettling tortfeasor because, although amounts of the settlement payments were fixed, the amount of the actual damages suffered by the plaintiff "remained uncertain until some factfinder determined them, either in the main action or in the indemnity action.... [Accordingly, at] the time the settlement amounts were paid, it was not certain or ascertainable whether they would exceed, equal or be less than the amount of damages ultimately found by the trier of fact. Had [the plaintiff's] damages been less than the amounts paid in settlement by the other tortfeasors, the [nonsettling tortfeasors'] proportionate share in the indemnity action would be limited to the lesser amount and not the higher settlement figure. [Accordingly], at the earliest, it was not until the jury rendered its verdict that the amount of [the plaintiff's] damages was finally determined and hence made certain within the meaning of the statute." (Id. at p. 1175.) Accordingly, because Sagadin concluded it was the amount of damages that was uncertain, not merely the liability of the defendant, Sagadin is not applicable here.
In Wisper, the plaintiff's claim was based on negligence and the principal disputed issue was comparative fault between the plaintiff and the defendant; a claim for equitable contribution among insurers is an equitable action involving different considerations. Moreover, the court in Wisper examined the apportionment of responsibility between the litigating parties rather than, as National Union here contends, the claim that responsibility could be partly apportioned to absentee third parties.
Here, the amount sought by NCIC was based on an ascertainable amount; National Union's defense was that it owed nothing; and NCIC recovered virtually all of what it claimed to be owed. Accordingly, even assuming the approach articulated by Wisper was applicable to a claim for equitable contribution among insurers (but see Shell Oil Co. v. National Union Fire Ins. Co. (1996) 44 Cal.App.4th 1633, 1651 [prejudgment interest awarded where only issue was assigning priorities among insurers]; accord, Safeway Stores, Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa. (9th Cir. 1995) 64 F.3d 1282, 1291), the trial court's award of prejudgment interest was not an abuse of discretion.
DISPOSITION
The judgment is affirmed. NCIC is entitled to costs on appeal.
WE CONCUR: McCONNELL, P. J., HUFFMAN, J.