Opinion
NOT TO BE PUBLISHED
Super. Ct. No. CV030565
SIMS, J.In this lawsuit by an insurance company against its broker for professional negligence, breach of fiduciary duty, equitable indemnity, and declaratory relief, plaintiff Essex Insurance Company (Essex) appeals from a judgment of dismissal following the sustaining of a demurrer brought by defendant Sovereign General Insurance (Sovereign). Essex contends the trial court erred in concluding the claims were barred by statutes of limitations and by Sovereign’s good faith settlement of a related case involving the insured. (Code Civ. Proc., §§ 339, 343, 877.6; undesignated statutory references are to the Code of Civil Procedure.) Essex also contends the trial court abused its discretion by not giving Essex an opportunity to amend the complaint. We shall conclude the complaint is barred by the statutes of limitations and the good faith settlement, and Essex fails to show a probability that it could cure these defects by amending the complaint. Accordingly, we shall affirm the judgment of dismissal.
Essex’s appellate brief contains several footnotes requesting judicial notice of documents which Essex has placed in its appellant’s appendix. We deny the requests, which fail to comply with the rule that requests for judicial notice be served and filed by way of a separate motion. (Cal. Rules of Court, rule 8.252; undesignated rule references are to California Rules of Court.) Moreover, as will appear, the documents do not help Essex in this appeal.
BACKGROUND
The complaint, filed September 20, 2006, alleged as follows:
Essex is a carrier of commercial excess and surplus insurance lines. Sovereign is a licensed insurance agent and acted as Essex’s broker in this case.
In 1993, (nonparty) Louis Sanchez doing business as L.A. Machinery Moving Company, applied for a new commercial general liability (CGL) insurance policy from Essex through Sanchez’s retail broker, (nonparty) Wenger Day Insurance Services. At that time, Essex was marketing CGL liability coverage through its managing general agent and surplus lines broker, Sovereign. The program was not intended to cover trucking operations but only risks such as non-vehicular accidents on the business premises. Sovereign had authority to act as Essex’s agent for the purpose of accepting applications, applying underwriting standards, and issuing policies.
In late 1993, Wenger forwarded Sanchez’s application for CGL coverage to Sovereign.
On January 7, 1994, Sovereign accepted the application and issued a binder valid for 30 days. Sovereign then tried to put together the documents that would comprise Sanchez’s CGL policy, through forms provided by Essex, as well as forms contained in Sovereign’s own files.
However, Sovereign failed to include in the packet it sent to Sanchez’s agent a critical form -- the ISO Commercial General Liability form -- which was the main form of the policy and contained, among other things, the actual agreement to provide insurance, identification of the risks insured, and standard conditions and exclusions. Essex was not aware of Sovereign’s failure to include the ISO form, as it was Sovereign’s duty to provide accurate policy forms to insureds.
In April 1994, Essex advised Sovereign to send Sanchez a notice of cancellation of the policy (for reasons not stated in the complaint). However, Sovereign did not send the notice until June 10, 1994, with a cancellation date of July 15, 1994.
Meanwhile, on June 13, 1994, Sanchez was delivering commercial dryers for its customer, (nonparty) Five Star Dye House, when one of the dryers was damaged while being transported from one of Sanchez’s trucks. The ISO form would have excluded coverage for this damage.
In January 1995, Five Star filed a claim against Sanchez for lost profits during the time the dryer was being repaired (which the complaint calls the “underlying action”).
In February 1996, Sanchez tendered his defense of the underlying action to Essex. Essex denied the tender, based primarily on exclusions in the ISO form.
In March 1996, Sovereign determined that the policy exclusions upon which Essex relied in denying coverage had never been provided to Sanchez during the term of the policy. Accordingly, Sovereign sent Sanchez a more complete copy of the policy, including the ISO form.
In May 1996, the underlying action was tried to the court, and judgment was entered in favor of Five Star, against Sanchez, in the amount of $1,350,000. Sanchez assigned to Five Star his rights against Essex for breach of the insurance contract, apparently in exchange for Five Star’s agreement not to execute on the judgment against Sanchez.
On August 29, 1996, Essex filed an action for declaratory relief against Five Star and Sanchez, both of whom cross-complained against Essex for breach of contract and breach of the covenant of good faith and fair dealing (which Essex refers to as the coverage action).
We shall conclude that by this point in 1996, Essex’s claims against Sovereign had accrued so as to start the two-year and four-year limitations periods, making Essex’s 2006 complaint against Sovereign untimely.
In January 2005, a final judgment was entered against Essex in the coverage action, in an amount over $2 million. The trial court in the coverage action found that Five Star’s claim for damages was covered under the Essex policy issued to Sanchez, that policy being limited to the forms initially provided to Sanchez. The court rejected Essex’s reliance on the ISO form that was not provided to Sanchez until almost two years after cancellation of the policy.
As alleged in the complaint at issue in this appeal (filed September 20, 2006), if the policy had been timely cancelled by Sovereign or if the correct forms had been attached to the original policy by Sovereign, no coverage would have existed for the damages awarded in the underlying action, and Essex would not have been subjected to the judgment in the coverage action, and Essex would not have incurred attorney fees and costs with respect to the coverage action. Essex also alleges that the judgment in the coverage action did not include an award for attorney fees payable to Five Star (Brandt fees), but the California Supreme Court has determined that Essex owes such fees above and beyond the judgment in the coverage action, the amount of which has yet to be determined.
Sovereign notes that, even if it was negligent, some of Essex’s alleged damages arose from its own independent decision to deny coverage even after it knew the policy was in effect.
Brandt v. Superior Court (1985) 37 Cal.3d 813, held an insured may recover, as damages, attorney fees incurred to obtain policy benefits wrongfully denied by the insurer. Essex Insurance Co. v. Five Star Dye House, Inc. (2006) 38 Cal.4th 1252, held such fees are recoverable by an insured’s assignee.
The complaint asserts four counts:
1. Professional negligence by Sovereign in failing to use reasonable and due care in fulfilling its obligations to Essex, causing damage to Essex in the amount it was found liable to Five Star in the coverage action and the amount of Brandt fees and costs.
2. Breach of fiduciary duty by Sovereign for the same conduct.
3. Equitable indemnity, subrogation, and/or contribution, to recover from Sovereign the amount Essex must pay to Five Star in the coverage action.
4. Declaratory relief as to the respective rights and duties of Essex and Sovereign.
In response to the complaint, Sovereign filed a demurrer, arguing the complaint was barred by various statutes of limitations and a good faith settlement. The demurrer asserted the first count (professional negligence) was barred by the two-year limitations period of section 339 for an action on an obligation or liability not founded upon an instrument in writing. The demurrer noted the complaint did not allege the date that Sovereign gave the incomplete forms to Sanchez, but the claim regarding failure to provide the correct forms began to run no later than March 1996 (when Sovereign corrected its mistake), such that the limitations period expired in March 1998, long before the September 2006 filing of this complaint. With respect to professional negligence in failing to cancel the policy in a timely manner, the demurrer argued the two-year limitations period began to run no later than June 10, 1994, when Sovereign issued the notice of cancellation, such that the deadline was June 1996, long before the September 2006 filing of the complaint. The demurrer argued the second count (breach of fiduciary duty) was barred by the four-year “catch-all” limitations period of section 343 (using the same accrual dates). The demurrer argued the third count (equitable indemnity) was barred by the Los Angeles County Superior Court’s June 1998 order approving a good faith settlement (§ 877.6) by Sovereign in the lawsuit filed by Essex against Five Star and Sanchez (the coverage action), in which Sovereign had been named as a cross-defendant in cross-complaints. The order dismissed Sovereign and stated in part: “All future claims for equitable comparative indemnity, partial indemnity and/or contribution against Sovereign General, regardless of the form in which such claims may be made, are barred as arising out of [specified Los Angeles County court case numbers].” The demurrer asserted that, since the first three counts were barred, there was no need for declaratory relief as pleaded in the fourth count.
Section 339 sets a two-year limitations period for “[a]n action upon a contract, obligation or liability not founded upon an instrument of writing [with inapplicable exceptions].”
Section 343 provides: “An action for relief not hereinbefore provided for must be commenced within four years after the cause of action shall have accrued.”
In opposition to the demurrer, Essex argued its complaint filed in 2006 was timely, because the two-year and four-year limitations periods did not begin to run until Essex suffered actual damage in 2005, when the Court of Appeal, Second Appellate District, affirmed the Los Angeles trial court’s judgment against Essex (in its coverage action) and denied rehearing on February 28, 2005. Essex asked for judicial notice of the Court of Appeal opinion in Essex Insurance Co. v. Five Star Dye House, Inc., B167295, previously published at 125 Cal.App.4th 1569, which affirmed judgment in an unpublished portion of the opinion and published only the portion about Brandt fees. Acknowledging that the Supreme Court had granted review of the Brandt fees issue, Essex said it cited the Court of Appeal opinion only to show the February 2005 date of denial of rehearing. Essex noted it originally won its coverage action in a summary judgment proceeding, but the appellate court reversed the summary judgment on the ground that triable issues existed. Essex also argued the good faith settlement of the coverage action does not bar this lawsuit, because the settlement was not related to a claim which could be offset against damages Essex was otherwise required to pay.
The trial court sustained the demurrer without leave to amend. Essex appeals from the ensuing judgment of dismissal.
DISCUSSION
I. Standard of Review
“On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, . . . [t]he reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.]” (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) In reviewing the sufficiency of a complaint against a demurrer, we also consider matters which may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
“[I]t is an abuse of discretion [for the trial court] to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. [Citation.]” (Aubry v. Tri-City Hospital Dist., supra, 2 Cal.4th at pp. 966-967.) The burden is on the appellant to show a reasonable possibility of curing a defect. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)
II. Statute of Limitations
Essex agrees its claims for professional negligence and breach of fiduciary duty are governed by the two-year limitations period of section 339 (fn. 5, ante). Sovereign at times continues to refer to a four-year limitations for breach of fiduciary duty but, as will appear, a four-year limitations would not save Essex’s complaint. As we shall explain, Essex’s claims against Sovereign accrued by August 1996, when Essex sustained the injury of having to litigate the coverage action caused by Sovereign’s alleged mistakes. Therefore, this lawsuit filed in September 2006 was untimely.
Essex notes the third count for equitable indemnity, and declaratory relief on that claim as alleged in count four, do not accrue until the indemnitee has suffered loss through payment. (Mangini v. Aerojet General Corporation (1991) 230 Cal.App.3d 1125, 1154-1155.)
Essex argues its 2006 complaint is timely because the accrual date for the two-year (and four-year) limitations periods occurred in 2005, when the Court of Appeal, Second Appellate District, issued its opinion affirming the judgment against Essex in the coverage action, and the California Supreme Court denied review (except as to the matter of Brandt fees). Essex points out it initially won its coverage action in a summary judgment proceeding, but the summary judgment was reversed by the Court of Appeal on the ground that triable issues existed. Essex argues the limitations periods began to run only when Essex had a claim for a legal remedy, which did not occur until it was finally determined upon exhaustion of appeals that Sovereign’s errors had irrevocably caused Essex harm, in the form of forcing Essex to indemnify the judgment Five Star had obtained against Sanchez. We disagree with Essex’s calculation of the accrual date.
A cause of action for professional negligence under section 339 accrues “‘on discovery of the loss or damage suffered by the aggrieved party,’ but until the client suffers damage or actual injury from the negligence, a cause of action for professional negligence cannot be established.” (International Engine Parts, Inc. v. Feddersen & Company (1995) 9 Cal.4th 606, 608 (Feddersen).)
Essex’s cause of action against Sovereign accrued by August 1996, when Essex filed its coverage action seeking declaratory relief as against the insured. By that point, Essex was aware of Sovereign’s alleged mistakes, and Essex suffered damage by having to incur the expense of pursuing the coverage action. Indeed, Essex claimed these litigation expenses from the coverage action as damages in the current lawsuit against Sovereign. Essex’s current complaint against Sovereign prayed for damages including “the amount of attorneys fees and costs incurred by Essex with respect to the coverage action . . . .”
It appears such expenses may be recoverable as damages under the “tort of another” doctrine, pursuant to which, “[a] person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney’s fees, and other expenditures thereby suffered or incurred. [Citations.]” (Prentice v. North Amer. Title Guar. Corp. (1963) 59 Cal.2d 618, 620.) In Prentice, an escrow holder’s negligence in closing a land sale forced the sellers to bring a quiet title action against third persons. In the same suit, they named the escrow holder as a defendant and were allowed to recover from the escrow holder the attorney fees incurred by the sellers in suing the third persons. (Ibid.) The “tort of another” doctrine requires that the party being ordered to pay the fees have a relationship which creates a duty to indemnify the party seeking the fees. (Watson v. Dept. of Transportation (1998) 68 Cal.App.4th 885, 893-895.) That appears to be the case here, where Sovereign was Essex’s agent in dealing with Essex’s insureds.
We also observe that litigation expenses with respect to the third person are incurred and therefore recoverable as damages regardless whether or not the party seeking the fees prevails in the litigation with the third person. (E.g., Saunders v. Cariss (1990) 224 Cal.App.3d 905, 909-910.) Essex had to pay the litigation costs of the coverage action regardless of the outcome of the coverage action. Even though the amount of damages was uncertain at that point, they would become certain by the close of the coverage lawsuit, and the very act of having to file the coverage action in order to try to avoid having to pay Sanchez or Five Star constituted actual harm sufficient to trigger the limitations periods.
Indeed, Essex admits in its reply brief that it did file an amended complaint in the coverage action, naming Sovereign as a defendant and seeking indemnity. Although Essex later dismissed these claims without prejudice (after the Los Angeles court approved Sovereign’s good faith settlement with Sanchez and Five Star), any inability of Essex to pursue claims against Sovereign was not caused by the absence of an accrued cause of action.
In its reply brief, Essex argues the California Supreme Court in Feddersen, supra, 9 Cal.4th 606, rejected the notion that incurring legal fees constitutes damage sufficient to start the limitations period. However, Feddersen is distinguishable. It held the limitations period in an accountant malpractice case alleging negligent preparation of tax returns commences when the IRS assesses the tax deficiency after the audit, not when administrative appeal of the IRS assessment has been completed. Feddersen did reject prior case law that payment of attorney fees for the audit process amounted to actual injury triggering the limitations period under section 339. (Id. at pp. 617-620.) However, as Feddersen observed, “The taxpayer’s tax returns may have been selected for audit for a number of reasons, some unrelated to the alleged accountant malpractice.” (Id. at p. 620.) Here, in contrast, Sovereign’s alleged mistakes were the only reason that Essex incurred the expense of litigating the coverage action with the insured.
Thus, Essex’s was aware of Sovereign’s negligence and sustained actual damage no later than August 1996, when Essex filed the coverage action seeking to avoid its legal liability on the insurance policy.
That the amount of damages was not yet clear in 1996 does not prevent the triggering of the limitations period.
Roger E. Smith, Inc. v. SHN Consulting Engineers & Geologists, Inc. (2001) 89 Cal.App.4th 638 (Smith), involved a professional negligence claim against an architect and construction manager for economic losses sustained by a general contractor. The plaintiff argued its cause of action did not accrue until its client (the County) refused to pay the expenses the plaintiff incurred due to the defendants’ deficient work, even though the plaintiff acknowledged it became aware of the deficiencies during the course of construction and incurred costs to fix them. (Id. at pp. 650-651.) The appellate court rejected the plaintiff’s argument that its damages remained speculative until the County refused to pay for the cost overruns pursuant to the County’s agreement with the plaintiff. (Id. at p. 651.) Smith said the argument confused the distinction between the fact and knowledge of damage and the amount of damage. (Ibid.) It is uncertainty as to the fact of damage, rather than its amount, which negates the existence of the cause of action. (Ibid.) Smith said the plaintiff indisputably suffered out-of-pocket costs during construction due to the 200 requests for information it claimed were necessitated by the defendants’ deficient work. (Ibid.) Whether the County would agree to reimburse the plaintiff for some or all of these costs did not change the fact that the plaintiff had suffered losses attributable to the defendants’ negligence. (Ibid.) Once a plaintiff has suffered actual and appreciable harm, neither the speculative nor uncertain character of damages nor the difficulty of proof will toll the limitations period. (Id. at pp. 651-652.)
Essex argues Smith, supra, 89 Cal.App.4th 638, is distinguishable because the plaintiff there admitted having suffered damages at a point more than two years before filing suit. However, Essex’s actions admit it suffered damages by 1996, in that Essex named Sovereign as a defendant in an amended complaint in the coverage action, and seeks in this lawsuit to recover from Sovereign for litigation costs for the 1996 coverage action.
In support of its argument that its cause of action did not accrue until the finality of appeals of the coverage action, Essex quotes from a legal malpractice case, Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739 (Jordache), that “the inquiry concerns whether ‘events have developed to a point where plaintiff is entitled to a legal remedy, not merely a symbolic judgment such as an award of nominal damages.’ [Citation.]” (Id. at p. 752.) However, Essex’s quotation ends too soon, because the next sentence in Jordache said: “However, once the plaintiff suffers actual harm, neither difficulty in proving damages nor uncertainty as to their amount tolls the limitations period. [Citation.]” (Jordache, supra, 18 Cal.4th at p. 752.)
Essex argues that Sovereign (and perhaps the trial court) improperly relied on legal malpractice cases such as Laird v. Blacker (1992) 2 Cal.4th 606, which said the limitations period is not tolled during appeal of the judgment in which the attorney allegedly committed malpractice. Essex argues legal malpractice cases do not govern here, because a specific statute (§ 340.6) limits tolling of the limitations period in legal malpractice actions. However, we do not rely on any analysis unique to the legal malpractice statute.
Essex argues the August 1996 date (when Essex filed its coverage action) cannot be the accrual date, because the Los Angeles Superior Court initially upheld Essex’s coverage position in the coverage action and ruled that Essex owed no duty to defend or indemnify. However, even at that point, Sovereign’s alleged negligence had caused actual harm to Essex, by causing Essex to incur the litigation expense of getting that ruling from the Los Angeles Superior Court. These costs were not dependent on the outcome of the coverage action. Even if Essex had prevailed in the coverage action and been found not liable to Sanchez or Five Star on the insurance policy, Essex would still have incurred those expenses as a result of Sovereign’s alleged negligence and breach of fiduciary duty.
Essex cites Archdale v. American Internat. Specialty Lines Ins. Co. (2007) 154 Cal.App.4th 449 (Archdale), where a trial court granted summary judgment to an insurer on claims for breach of contract and breach of the implied covenant of good faith and fair dealing, brought by an insured and his claimants/assignees. The insurer provided a defense to a personal injury action brought against the insured by the claimants/assignees, which resulted in a judgment in excess of the policy limits. The complaint alleged the insurer failed to accept reasonable settlement offers within the policy limits. The Court of Appeal reversed as to the claimants/assignees’ contractual cause of action for breach of the implied covenant of good faith and fair dealing and otherwise affirmed the judgment. The appellate court said the insured’s tort claim was untimely because he did not authorize the filing of the complaint until after the limitations period expired. However, as to the claimants/assignees’ contract claim for breach of the implied covenant, the excess judgment could be recovered as foreseeable damages. The claimants/assignees’ claim accrued when the underlying judgment was rendered, but the limitations period was equitably tolled while the insurer pursued an appeal (on behalf of the insured) of the underlying property damage and personal injury case. (Id. at pp. 473-479.) The insured’s retroactive ratification of the filing of the complaint and retroactive assignment did not prejudice the insurer, because the limitations period had not expired. (Id. at pp. 479-450.)
We agree with Sovereign that Archdale, supra, 154 Cal.App.4th 449, is distinguishable because there the insurer in its appeal challenged the jury’s allocation of fault to non-insureds and, if successful, could have reduced the allocation to the insureds to an amount below policy limits, in which case there would be no claim for unreasonable refusal to accept a below-policy-limits settlement, since there would be no judgment in excess of policy limits. The Archdale court stated no contract claim based on an insurer’s failure to settle a claim exists until a judgment in excess of the policy limits has been rendered against the insured. (Id. at p. 474.) “[T]here can be no liability for the failure to accept a reasonable settlement offer unless and until there is an excess judgment entered against the insured. [Citations.]” (Id. at p. 476.) Thus, an insured’s cause of action for breach of the implied covenant of good faith and fair dealing may accrue on the entry of the judgment, but until the judgment becomes final, the insured has either not been harmed or the amount of harm cannot be determined. (Ibid.)
Applying Archdale, supra, 154 Cal.App.4th 449, to this case would mean (at best, for Essex) that equitable tolling may have been appropriate during an appeal of the judgment entered against Sanchez in the complaint filed by Five Star against Sanchez. However, nothing in the record indicates any such appeal of that judgment. Archdale does not support tolling the limitations period for Essex’s claim against Sovereign while Essex pursued its coverage action against the insured and the claimant.
We conclude the first count (professional negligence) and the second count (breach of fiduciary duty) are barred by the statutes of limitations, and therefore the demurrer was properly sustained as to those counts. As we discuss post, plaintiff fails to show any possibility that an amendment could cure the defects in the complaint. In light of our conclusion that the demurrer to the first two counts was properly sustained on limitations grounds, we need not address the new arguments in Sovereign’s respondent’s brief on appeal, arguing that these two counts are also barred by the good faith settlement and res judicata.
III. Good Faith Settlement
Essex argues it is unclear whether the trial court based its ruling solely on the statutes of limitations or also upon the good faith settlement. However, the demurrer did not argue the statutes of limitations with respect to the third count for equitable indemnity. Rather, the demurrer argued the equitable indemnity claim was barred by good faith settlement pursuant to sections 877.6 and 877.
Section 877.6 provides in part: “(a)(1) Any party to an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors, upon giving notice in [a specified manner]. [¶] . . . [¶] (c) A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.”
Section 877 provides: “Where a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment is given in good faith before verdict or judgment to one or more of a number of tortfeasors claimed to be liable for the same tort, or to one or more other co-obligors mutually subject to contribution rights, it shall have the following effect: [¶] (a) It shall not discharge any other such party from liability unless its terms so provide, but it shall reduce the claims against the others in the amount stipulated by the release, the dismissal or the covenant, or in the amount of the consideration paid for it whichever is greater. [¶] (b) It shall discharge the party to whom it is given from all liability for any contribution to any other parties. [¶] (c) This section shall not apply to co-obligors who have expressly agreed in writing to an apportionment of liability for losses or claims among themselves. [¶] (d) This section shall not apply to a release, dismissal with or without prejudice, or a covenant not to sue or not to enforce judgment given to a co-obligor on an alleged contract debt where the contract was made prior to January 1, 1988.” (Italics added.)
“A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.” (§ 877.6, subd. (c).) The good faith settlement “shall discharge the party to whom it is given from all liability for any contribution to any other parties.” (§ 877, subd. (b).) The goals of section 877.6 are the equitable sharing of costs among the parties at fault and the encouragement of settlements. (Wilshire Ins. Co. v. Tuff Boy Holding, Inc. (2001) 86 Cal.App.4th 627, 641.)
As we have mentioned, Sovereign obtained a determination of good faith settlement in the coverage action. The order dismissing Sovereign from the coverage action, and determining Sovereign’s settlement was in good faith, provided in part: “All future claims for equitable comparative indemnity, partial indemnity and/or contribution against Sovereign General, regardless of the form in which such claims may be made, are barred as arising out of [specified Los Angeles County court case numbers including the coverage action].”
This order on its face bars the indemnity action pleaded by Essex in this case. Essex makes a number of arguments as to why its indemnity claims should not be barred. We shall discuss these attacks on the good faith settlement determination in a moment. First, however, we note that Essex’s counsel admitted at oral argument that, although Essex filed a writ petition to contest the good faith determination, the petition was denied as untimely. There may be no attack on a good faith settlement determination unless a writ petition is timely filed. (§ 877.6, subd. (e); O’Hearn v. Hillcrest Gym & Fitness Center, Inc. (2004) 115 Cal.App.4th 491; 498-499.)
Since the good faith determination order in the coverage action has never been reversed or vacated, it is a valid, final order that blocks Essex’s indemnity claims. Essex may not collaterally attack that order in this case, because such a belated procedure would eviscerate the policy of section 877.6 to obtain speedy finality of settlements. (See O’Hearn, supra, 115 Cal.App.4th at pp. 498-499.)
Essex argues a good faith settlement bars further claims only when they are indemnity claims for which the same liability is at issue, and the non-settling defendant actually receives an offset based on the settlement amount paid by the settling party.
However, on the face of the documents in the record, it seems clear the same liability is at issue in this case as in the good faith settlement. Sovereign reached a settlement with Sanchez and Five Star in the coverage action filed by Essex against Sanchez and Five Star, in which Sovereign was sued as a cross-defendant. The coverage action related to the question whether the Essex insurance policy, issued by Sovereign as Essex’s broker, covered Five Star’s claim against Sanchez. In this lawsuit, Essex claims that, but for Sovereign’s negligence, there would be no insurance coverage.
Essex argues the settlement related to damages different from the damages awarded to Five Star as against Essex, and Essex was not allowed to offset the settlement against damages awarded by the Los Angeles court. Essex refers to the fact that the attorney for Sanchez and Five Star, in a memorandum of points and authorities filed in opposition to some motion to modify the Los Angeles judgment, argued that Essex’s motion was flawed because it sought a reduction of the $2.2 million Los Angeles judgment against Essex based on section 877 (fn. 9, ante), which (according to the attorney for Sanchez and Five Star) applied only to torts, not to contract claims, and in any event did not apply because the settlement terms expressly designated the settlement money for emotional distress, not the damages sought against Essex for its breach of contract. Essex in its opening brief provides no legal analysis and cites no authority requiring us to accept the settling party’s designation of the settlement as emotional distress damages. We therefore need not consider the matter further. (Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979 [reviewing court need not address contentions unsupported by citation to authority].)
We also need not consider Essex’s argument, unsupported by legal authority or analysis, that the settlement bars liability only if Essex actually received an offset. We nevertheless note that neither section 877 nor section 877.6 contains such a qualification. Instead, the statutes provide for unqualified discharge of the party who obtains a court determination of good faith settlement. To read into the statutes a qualification requiring the settling party to prove that non-settling parties actually got an offset would undermine the statutory goal of encouraging settlements (Wilshire Ins. Co. v. Tuff Boy Holding, Inc. (2001)86 Cal.App.4th 627, 641), because it would require the settling party’s continued involvement in the ongoing litigation among the non-settling parties. Also, such a rule would allow a non-settling party to go after the settling party rather than pursue an appeal of a trial court’s denial of an offset. This too, by leaving the settling party’s liability open, would discourage settlements.
We also observe that, even assuming that Essex’s points about good faith settlements have merit, Essex fails to show that the burden was on Sovereign to establish that Essex actually received an offset. It seems the burden would be on Essex to prove it did not receive an offset and to show the reason, a burden which Essex failed to meet adequately in this case.
Essex cites authority that a good faith settlement provides an offset to non-settling parties against their remaining liability. (Heppler v. J.M. Peters Co. (1999) 73 Cal.App.4th 1265; Ortega v. Pajaro Valley Unified School Dist. (1998) 64 Cal.App.4th 1023.) However, this legal principle does not demonstrate that Essex was denied an offset or that denial of offset was attributable to inapplicability of sections 877 and 877.6, rather than court error or some other reason.
We conclude Sovereign met its burden on demurrer by submitting the Los Angeles court’s order approving the good faith settlement.
We also observe that Essex fails to substantiate in its opening brief its assertion that it did not receive an offset. Instead, Essex merely cites to a memorandum of points and authorities and declaration from the attorney for Sanchez and Five Star in the Los Angeles case, filed in opposition to some motion to modify the Los Angeles judgment, in which the attorney for Sanchez and Five Star argued that Essex’s motion was flawed because it sought a reduction of the $2.2 million Los Angeles judgment against Essex based on section 877 (fn. 9, ante), which (according to the attorney for Sanchez and Five Star) applied only to torts, not to contract claims, and which in any event did not apply because the settlement money was paid to Sanchez, not Five Star, and the settlement terms expressly designated the settlement money for emotional distress, not the damages sought against Essex for its breach of contract. Essex in this appeal also cites the Los Angeles judgment against it in the amount of $2.2 million. However, the Los Angeles judgment predates the other documents cited by Essex, which referred to a motion by Essex to modify the judgment. Thus, the judgment does not prove that the trial court denied the modification motion.
One of the documents for which Essex seeks judicial notice (without the proper noticed motion, see fn. 1, ante) is a partial satisfaction of judgment showing Essex paid over $2.8 million to Five Star. However, this document does not break this figure down, so we do not know how much, if any, was for interest or other costs.
In its reply brief in this appeal, Essex argues the Court of Appeal (Second District) in the unpublished portion of its opinion in the coverage action said that Essex was not entitled to an offset for Sovereign’s good faith settlement. At the same time Essex filed its reply brief in this court, Essex filed an “AMENDED APPELLANT’S APPENDIX” which included a copy of the unpublished portion of the Court of Appeal opinion from the Second Appellate District. However, we do not allow appellants to raise new points in a reply brief, which should have been and could have been raised in the opening brief, because to do so would be unfair to the respondent. (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 763, 766; Neighbours v. Buzz Oates Enterprises (1990) 217 Cal.App.3d 325, 335, fn. 8.) We recognize rule 8.124(e)(4) authorizes the filing of an “appellant’s reply appendix,” to be served and filed with the appellant’s reply brief. However, Essex did not file a reply appendix but an amended appellant’s appendix. While we would obviously consider documents in a reply appendix, if needed to reply to points raised in a respondent’s appendix, that is not the case here, where no respondent’s appendix was filed, and Essex could have and should have presented this point in its opening brief. We accordingly disregard the new points raised in Essex’s reply brief.
We conclude Sovereign met its burden of showing the indemnity claim was barred by the good faith settlement, and Essex failed to show to the contrary.
Essex argues the good faith settlement cannot bar its indemnity claim for “Brandt fees” (pursuant to which assignees of an insured can recover fees against the insurer), because the court opinion extending Brandt to assignees of the insured (which was a Supreme Court decision involving this exact same case, Essex Insurance Co. v. Five Star Dye House, supra, 38 Cal.4th 1252) did not issue until after the good faith settlement. However, Essex cites no authority and offers no legal analysis that the statutorily-mandated discharge of a settling party under section 877.6 is to be undone whenever a new court opinion is filed which the nonsettling party views as an expansion of remedies. We need not consider arguments unsupported by legal authority or analysis. (Kim v. Sumitomo Bank, supra, 17 Cal.App.4th at p. 979.)
We conclude the trial court properly sustained the demurrer on the ground of the good faith settlement.
IV. Leave to Amend
Essex argues the trial court abused its discretion in failing to grant Essex leave to amend the complaint. However, Essex fails to meet its burden on appeal to identify how it could cure the complaint’s defects. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)
Essex says it can cure the limitations defect by adding the following allegations:
1. In October 1998, in the underlying action by Five Star against Sanchez, the Los Angeles County Superior Court ruled that Essex owed no coverage to Sanchez for the claims asserted in the underlying action. On September 12, 2000, the Court of Appeal reversed, and the case was remanded for a jury trial.
In a footnote in the statement of facts in its appellate brief, Essex asks us to take judicial notice of a record in the trial court which supposedly shows the trial court’s October 1998 ruling. However, Essex merely refers to a page it inserted in the appellant’s appendix which is an unsigned proposed judgment, and Essex fails to comply with rule 8.252, which requires a party to serve and file a separate motion when seeking judicial notice by a reviewing court. We therefore deny the request for judicial notice.
2. On March 3, 2003, the Los Angeles County Superior Court entered judgment in favor of Five Star that coverage existed pursuant to the policy forms issued by Sovereign. Essex timely appealed from that judgment.
3. On January 27, 2005, the judgment was affirmed by the Court of Appeal, except for the trial court’s ruling that Five Star, as an assignee, was not entitled to Brandt fees. Essex filed a petition for rehearing, which was denied, and a petition for review to the California Supreme Court, which granted review limited to the issue of Brandt fees. As of the date the Supreme Court granted review, Essex became finally and irrevocably obligated to pay the damages awarded by the Los Angeles County Superior Court to Five Star by reason of the policy forms and Essex’s actions taken in reliance upon the representations made by Sovereign.
4. Essex paid all damages awarded to Five Star, including interest, but not including Brandt fees, around June 20, 2005.
5. On February 22, 2007, pursuant to an order of the Los Angeles County Superior Court dated February 2, 2007, Essex paid the Brandt fees to Five Star.
However, Essex fails to explain how these allegations would cure the complaint’s defects. We have already rejected Essex’s argument that its cause of action did not accrue until after all these listed events occurred.
Under the separate statement of facts in its appellate brief, Essex says that, although not alleged in the complaint, it is judicially noticeable and can be inserted in any amended complaint that Sanchez brought separate actions against his broker, Wenger-Day, and against Sovereign which, for some period of the litigation, were found to be “related” actions. Aside from Essex’s failure to seek judicial notice by a separate motion (rule, 8.252), Essex fails to explain how this would cure the complaint’s defects.
Essex cites California Federal Bank v. Matreyek (1992) 8 Cal.App.4th 125, which said that, where a demurrer is sustained to the original complaint, denial of leave to amend constitutes an abuse of discretion if the pleading does not show on its face that it is incapable of amendment. (Id. at pp. 130-131.) However, California Federal Bank affirmed the sustaining of a demurrer without leave to amend, and the case therein cited (King v. Mortimer (1948) 83 Cal.App.2d 153, 158-159, 163) said the complaint was uncertain in critical respects, and the demurrer was brought in part on the ground of insufficient facts alleged in the complaint. Here, there is no uncertainty in the complaint. We reject Essex’s suggestion that the complaint was uncertain justifying leave to amend because the complaint alleged the full amount of damages had yet to be determined. We see no way to cure the defects, and Essex proffers none.
We conclude Essex fails to show grounds for leave to amend the complaint.
DISPOSITION
The judgment of dismissal is affirmed. Sovereign General
Insurance shall recover its costs on appeal. (Cal. Rules of court, rule 8.278(a)(1).)
We concur: BLEASE, Acting P.J., HULL, J.