Roza Lopez sustained a cumulative injury while employed as a grocery clerk by Superior Center Concepts. Two insurers, Care West Pegasus Modesto (Care West) and Ullico Casualty Company (Ullico), were jointly and severally liable for claims arising from this injury. In a compromise and release agreement, they settled the employee’s claims and the insurers stipulated they would “pay, adjust, or litigate all liens of record,” and would “share equally for liability for med-legal charges,” and would allocate 52 percent of liability for the treatment charges to Care West and 48 percent to Ullico.
When Ullico became insolvent and was liquidated, responsibility for third party claims against it was assumed by the California Insurance Guarantee Association (CIGA), which the Legislature established in 1969 to protect against loss to insureds “arising from the failure of an insolvent insurer to discharge its obligations under its insurance policies.” CIGA moved to be dismissed from the instant workers’ compensation cases on the ground that it was authorized to pay only “covered claims,” from which the Legislature expressly excluded any “claim to the extent it is covered by any other insurance.” CIGA argued Care West’s policy constituted “other insurance” that covered third party claims. The Workers’ Compensation Appeals Board denied CIGA’s motion on the ground that the Care West/Ullico agreement limited Care West’s liability to roughly half of any third party claims, thereby rendering Care West’s insurance unavailable as to the remaining half.
The Court of Appeal summarily denied the petition for review filed by CIGA, but the Supreme Court granted review and remanded the case with directions to hear the matter on the merits. After review of the record, the Court of Appeal ruled that the order denying CIGA’s petition for reconsideration be annulled and the matter is remanded to the Appeals Board with directions to enter an order dismissing CIGA from these proceedings in the published case of CIGA v Workers’ Compensation Appeals Board.
The Appeals Board argued that the approved compromise and release was a final judgment that may not be relitigated, and after entry of that judgment Care West’s and Ullico’s liability was no longer joint and several. The Court of Appeal disagreed. “The argument reflects a basic misunderstanding of the nature of “several” liability, which is not, strictly speaking, a rule of liability at all – it is a rule of joinder.” Several liability has nothing to do with, and cannot be changed by, apportionment of an obligation between promissors.”
The Court concluded that the Care West/Ullico compromise and release agreement did not relieve Care West of its several liability for third party claims.The judgment merely apportioned liability; it did not change the joint and several nature of the now-apportioned liability.