Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County, Leon S. Kaplan, Judge, Super. Ct. No. LC070139
Ropers, Majeski, Kohn & Bentley, Marta B. Arriandiaga, Michael T. Ohira and Terry Anastassiou for Plaintiffs and Respondents.
Law Offices of Jeffrey A. Coleman and Jeffrey A. Coleman for Defendant and Appellant.
ALDRICH, J.
INTRODUCTION
After Fire Insurance Exchange and Truck Insurance Exchange (together Fire Insurance Exchange) settled a third party action on behalf of its insureds, Giovanni Brambilla and his wife, son, and daughter-in-law, it brought the instant action for declaratory relief and reimbursement of the defense and settlement costs it expended based on its earlier reservation of rights. Fire Insurance Exchange asserted that none of the allegations against Giovanni in the third party action was covered by the homeowners’ policy, and so it was entitled to full reimbursement. Both parties moved for summary judgment. The trial court granted Fire Insurance Exchange’s motion and denied Giovanni’s. Giovanni appeals contending there were triable issues of fact about whether Fire Insurance Exchange acted with unclean hands when it settled the third party lawsuit, which issues precluded the grant of Fire Insurance Exchange’s motion and the denial of his motion. We affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The following are the stipulated facts:
Marco and his wife Sonia Brambilla obtained a homeowners’ policy from Fire Insurance Exchange (Policy No. 0918022847) (hereinafter the policy) providing $1 million liability coverage. Marco and Sonia were named insureds, and Giovanni and his wife Tatiana Brambilla, parents of Marco Brambilla, were permanent residents of the insured household, and so were also “insureds” under the policy.
The Brambillas also had an umbrella policy issued by Truck Insurance Exchange. Policy number 094153564 provided limits of $1 million for each occurrence with a $250 retained limit.
1. The lawsuit against the Brambillas
On May 19, 2003, the Los Angeles County District Attorney charged Giovanni with violation of Penal Code section 288a, subdivision (b)(2) – oral copulation of a person under the age of 16. The incident had occurred on April 16, 2003. Giovanni pled guilty to the charge.
Thereafter, Roe M., by and through his guardian ad litem, Jane M., filed a civil action naming all four Brambillas as defendants (hereinafter the Roe lawsuit). The gravamen of the Roe lawsuit was that Giovanni had molested the minor, had threatened and belittled him, and falsely imprisoned him, to engage in sexual acts, and that the remaining defendants failed to stop the conduct. The Roe lawsuit sought not less than $22,000 in special damages and $5 million in general damages, plus $25 million in punitive damages against each individual defendant.
2. Fire Insurance Exchange undertook the defense and settled the Roe lawsuit
On April 14, 2004, the Brambillas tendered the Roe lawsuit to Fire Insurance Exchange to provide all the insureds with a defense.
On May 20, 2004, Fire Insurance Exchange wrote to the insureds agreeing to provide a defense, subject to a reservation of its right to withdraw from the defense, file a declaratory relief action, and seek reimbursement of its defense fees and costs.
In April 2005, Fire Insurance Exchange settled the Roe lawsuit for $155,000, subject to its reservation of the right to seek reimbursement.
3. The instant action
After settling the Roe lawsuit, Fire Insurance Exchange filed its complaint against the Brambillas seeking declaratory relief and quasi-contractual damages on the ground that the conduct alleged in the Roe lawsuit was not covered by the policy, with the result Fire Insurance Exchange had no duty to defend, settle, or indemnify the four Brambillas. Fire Insurance Exchange sought as quasi-contractual damages, reimbursement for the settlement amounts and defense fees and costs it paid for the Roes’ claims because they were either not covered or excluded.
In their answer, the Brambillas raised as an affirmative defense that Fire Insurance Exchange’s causes of action were barred “due to the plaintiffs’ unclean hands.”
4. The policies at issue
The Brambillas’ policy with Fire Insurance Exchange provided liability coverage for “damages which an Insured becomes legally obligated to pay because of bodily injury . . . or personal injury resulting from an occurrence to which this coverage applies.” (Italics added.) “Occurrence” was defined in the policy as “an accident including exposure to conditions which results during the policy period in bodily injury or property damage. Repeated or continuous exposure to the same general conditions is considered to be one occurrence.”
Endorsement E4207 of the policy specifically excluded coverage for child molestation. Also excluded from coverage were damages arising from intentional acts and personal injury caused by a violation of penal law.
As for a defense, the Fire Insurance Exchange policy provided, “[a]t our expense and with attorneys of our choice, we will defend an insured against any covered claim or suit. We are not obligated to pay defense costs, including attorneys’ fees of any claim of suit where you select an attorney not chosen by us because there is a dispute between you and us over coverage. We may investigate and settle any claim or suit that we consider proper. Our obligation to defend any claim or suit ends once we have paid our limit of liability.” (Italics added.)
After the case was at issue, the parties agreed to resolve their dispute by cross-motions for summary judgment based on the above stipulated facts with a single plaintiff (Fire Insurance Exchange) and a single defendant (Giovanni Brambilla).
5. Fire Insurance Exchange’s summary judgment motion
In its motion, Fire Insurance Exchange asserted that there was no dispute of fact that all of the allegations in the Roe lawsuit were either of sexual molestation or of acts that were inextricably intertwined and inseparable from sexual molestation and hence either were not covered or were excluded from coverage under the policy. Fire Insurance Exchange also asserted that it was undisputed that Giovanni tendered the Roe lawsuit to the company and Fire Insurance Exchange had settled the Roe lawsuit subject to its reservation of rights. Hence, as a matter of law, Fire Insurance Exchange argued that it owed no duty to defend the Roe lawsuit and was entitled to reimbursement of its defense and settlement costs.
6. Giovanni’s cross-motion for summary judgment
Giovanni’s cross-motion was premised on the grounds that: (1) Fire Insurance Exchange had a duty as a matter of law to pay the settlement and defense costs; (2) Giovanni repeatedly informed Fire Insurance Exchange he did not want benefits from the insurer and so Fire Insurance Exchange paid the settlement amounts as a “volunteer;” and (3) Fire Insurance Exchange settled the Roe lawsuit without Giovanni’s consent and in so doing, colluded with the Roe plaintiffs against him “so [that Fire Insurance Exchange] could . . . sue him for the settlement.”
In support of these assertions, Giovanni submitted his own separate statement of facts that: (1) Fire Insurance Exchange requested Giovanni’s consent before entering into the settlement, but no consent was given; (2) upon learning Fire Insurance Exchange planned to provide a defense for Giovanni in the Roe lawsuit, Giovanni repeatedly told the insurer that he did not want to be defended; (3) Giovanni stressed to Fire Insurance Exchange that he was old, ill, destitute, completely judgment proof, and his family had suffered enough abuse out of the Roe lawsuit; (4) despite his pleas to be left alone and requests to allow default to be entered, Fire Insurance Exchange hired attorneys to defend Giovanni in the Roe lawsuit; and (5) in the days leading to the settlement Giovanni advised Fire Insurance Exchange he was not ready to agree to settlement on the terms proposed by his carriers.
Giovanni submitted the declaration of Harry A. Safarian, his personal counsel, who stated that “[u]pon learning Fire Insurance Exchange intended to enter an appearance in an underlying action (Roe M. v. Brambilla) for him, Giovanni requested I take whatever steps I could to prevent [Fire Insurance Exchange] from acting on his behalf. Giovanni requested I inform [Fire Insurance Exchange] of the fact he was ill, destitute and did not want to be involved in the underlying suit. I followed Giovanni’s wishes, repeatedly informing [Fire Insurance Exchange’s] claims examiner, Loren Davis, of these wishes. . . . [Fire Insurance Exchange] declined to honor Giovanni’s wishes despite repeated pleas.” “Notwithstanding these objections, [Fire Insurance Exchange] hired attorneys to represent Giovanni in the underlying action.” Safarian further stated that Fire Insurance Exchange requested Giovanni’s consent to settle, “but no consent was given.” Safarian closed by stating, “It is clear from the facts leading up to the underlying settlement, including the attached declaration of Todd Lavin [attorney representing the Roe plaintiffs], that [Fire Insurance Exchange] attempted to create a sense of false urgency, colluding against Giovanni, their own insured, so they could then sue him for the settlement.”
Todd Lavin stated in his declaration that on April 4, 2005, Marta Arriandiaga, counsel for the insurance companies, telephoned Lavin and “advised she ‘need[ed] a nasty letter’ from me stating that (1) my clients’ $155,000 demand was significantly below the value of the [Roe] Action; (2) it would be taken ‘off the table’ permanently if not accepted by close of business on April 4, 2005, and (3) that I would be seeking $1 million or more if the case did not settle. [¶] . . . In response to Ms. Arriandiaga’s request, I expressed that I believed we already had an agreement to settle for $155,000 that was enforceable, and I did not want to prepare any writing in contradiction to that agreement. She responded that I could qualify my letter to her by expressing my belief that the parties already had a settlement agreement. She added that if I sent this letter to her, Farmers [Insurance Group] would pay the settlement funds and she would send me a letter confirming this.”
7. Fire Insurance Exchange’s opposition to Giovanni’s motion
Fire Insurance Exchange disputed Giovanni’s facts. It submitted, under the authenticating declaration of Loren Davis, the claims representative handling the claims against the Brambillas, the letter from Marco Brambilla to Farmers Insurance Group, tendering the defense to Fire Insurance Exchange: On April 14, 2004, Marco Brambilla wrote, “The defense of this matter is hereby tendered on behalf of the defendants under Farmers’ Homeowner’s Policy No. 91802-28-47 (‘the Policy’). Each defendant is, and at all relevant times was, a permanent resident of the covered home.”
Fire Insurance Exchange also submitted an email and a letter from Safarian to Arriandiaga dated March 16, 2005, and March 21, 2005, respectively, less than a month before the settlement was finalized in the Roe lawsuit, in which Safarian reiterated that Giovanni and his wife were entitled to Cumis counsel. Nowhere in these missives did Safarian insist that Giovanni did not want to be represented by Fire Insurance Exchange.
Fire Insurance Exchange also submitted 11 separate pieces of correspondence between Arriandiaga and Safarian from March 10 to April 4, 2005. Therein, Arriandiaga explained to Safarian and other Cumis counsel that she was “aware of Harry Safarian’s numerous demands that [Fire Insurance Exchange] agree to settle said underlying [Roe] suit.” On March 10, 2005, Arriandiaga renewed Fire Insurance Exchange’s reservations of rights and notified the Brambillas’ attorneys that “[i]n the event that the [Roe] plaintiffs make a settlement demand that [Fire Insurance Exchange] considers reasonable and that it is willing to fund, subject to a reimbursement claim against your clients, please be advised that your clients can opt to avoid such a settlement by asking [Fire Insurance Exchange] to forego meeting plaintiffs’ demand(s). If this option is selected, however, your clients would be responsible for assuming responsibility to fund their continued defense against the underlying lawsuit. [¶] Any decision by [Fire Insurance Exchange] to settle or to contribute towards a settlement of the underlying lawsuit would be based upon the language of the insurance contract which allows [Fire Insurance Exchange] to settle any claim or suit at its discretion.” (Italics added.)
Cumis counsel wrote Arriandiaga on March 29, 2005, “confirm[ing] receipt of your . . . letter to my attention concerning your attempts to settle this case on behalf of Defendants Marco, Sonia, Tatiana and Giovanni Brambilla under the ‘Blue Ridge’ decision. Needless to say, the approach and handling of this case and attempt to settle by [Fire Insurance Exchange], has caused extreme upset and emotional upheaval in the Brambilla family. The family will respond to your letter, but at this point . . . they are so upset that any meaningful discussion . . . is not practical.” (Italics added.)
Arriandiaga replied on March 30, 2005, stating, “Almost from the inception of the underlying lawsuit, personal counsel for the insureds (Harry Safarian) has frequently, forcefully, and unequivocally” “on a daily basis during the past few weeks” “insisted that [Fire Insurance Exchange] agree to settle Marco and Sonia Brambilla out of the underlying lawsuit. Mr. Safarian was not particularly interested in securing a dismissal for Giovanni Brambilla (the individual who actually pled guilty to the sexual molestation of the minor plaintiff), nor of his wife Tatiana – he felt that because Giovanni was so advanced in age, had no personal assets, and had no insurance coverage, plaintiffs and their counsel would perhaps be more inclined to dismiss the entire underlying lawsuit if they received some significant settlement funds on behalf of Marco and Sonia . . . . [who had] ‘deeper pockets’ . . . .” Arriandiaga observed that the “substantially discounted $155,000 settlement demand should be accepted” and that “[t]ime is of the essence. We need a decision from the insureds as soon as possible” about whether they wanted to proceed with the proposed settlement. (Italics added.)
During mediation, the Roe plaintiffs’ counsel had made a policy limits demand of $1 million. Thereafter, on March 28, 2005, the Roes reduced their demand by almost 90 percent to $155,000. In a letter sent to Safarian and Cumis counsel, on March 31, 2005, Arriandiaga expressed her “serious[] doubt” that the Roe plaintiffs “will ever make such a low settlement demand again.” Arriandiaga again requested that Cumis counsel and Safarian “both try to come to some agreement after consultation with your clients about exactly which insured(s) you want settled out of the underlying lawsuit and which insured(s) you did not want to be settled out of that case, and then advise us accordingly.” (Emphasis in original, italics added.)
Finally, Fire Insurance Exchange included Lavin’s letter sent on April 4, 2005. The letter reflected that on March 28, 2005, the mediator advised Lavin that Fire Insurance Exchange and the Roe plaintiffs had reached a settlement in the sum of $155,000 to settle the Roe lawsuit, which settlement Lavin considered “to be a binding . . . agreement.” Lavin continued, “[t]he Plaintiffs made a substantial compromise in agreeing to the $155,000 settlement figure.” Lavin expressed his opinion that the Roes suffered damages that “far outweigh the $155,000 settlement figure” and that should Fire Insurance Exchange challenge the existence of a settlement agreement, “my clients will be looking to recover damages in excess of the $1,000,000 policy limits which we previously demanded.”
As noted, the settlement was executed on April 14, 2005.
On these papers, the trial court granted Fire Insurance Exchange’s summary judgment motion, and denied Giovanni’s cross-motion. The court ordered Giovanni to pay Fire Insurance Exchange $90,718.68, plus interest, and awarded Fire Insurance Exchange the costs of suit. Giovanni’s timely appeal followed.
CONTENTIONS
Giovanni contends that material factual disputes exist about whether Fire Insurance Exchange acted with unclean hands in settling the Roe lawsuit necessitating a denial of the insurance company’s summary judgment motion.
DISCUSSION
1. Standard of review
“The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. [Citation.]” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Thus, summary judgment is granted when a moving party establishes the right to entry of judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).)
A plaintiff moving for summary judgment “has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on that cause of action.” (Code Civ. Proc., § 437c, subd. (p)(1).) If the defendant does not make such a showing, summary judgment in favor of the plaintiff is appropriate.
In cross-motions for summary judgment, the “cross-defendant has met his or her burden of showing that . . . there is a complete defense to that cause of action. Once the . . . cross-defendant has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).)
On appeal from a summary judgment, we make “an independent assessment of the correctness of the trial court’s ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law. [Citations.]” (Iverson v. Muroc Unified School Dist. (1995) 32 Cal.App.4th 218, 222-223.) We “review the record de novo, considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained. [Citation.]” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) We construe the moving party’s affidavits and declaration strictly, and the opposing party’s evidence liberally, and resolve doubts about the propriety of granting the motion in favor of the party opposing it. (Castillo v. Express Escrow Co. (2007) 146 Cal.App.4th 1301, 1306.)
2. As a matter of law, Fire Insurance Exchange is entitled to reimbursement for the cost to it of defending and settling the Roe lawsuit
Giovanni’s sole contention on appeal is that the trial court erred in granting Fire Insurance Exchange’s summary judgment motion because Giovanni presented a triable issue of material fact about his affirmative defense that the insurance company acted with unclean hands in settling the Roe lawsuit. Giovanni raises no challenge to the reasonableness of the settlement amount. Additionally, Giovanni effectively concedes that the trial court properly ruled that none of the conduct alleged in the Roe lawsuit was covered by the policy, and so Fire Insurance Exchange owed no duty to indemnify Giovanni.
a. Fire Insurance Exchange carried its burden in its motion for summary judgment to show its entitlement to judgment in its favor
The first issue then is whether Fire Insurance Exchange carried its burden as plaintiff in its motion for summary judgment to show there was no dispute of fact and so, as a matter of law, it was entitled to reimbursement for the cost of defending Giovanni and settling the Roe lawsuit.
(i) Fire Insurance Exchange satisfied the prerequisites to reimbursement
An insurer is entitled to reimbursement when it agrees to accept a defense for noncovered claims under an express reservation of rights. Our Supreme Court established in Blue Ridge Ins. Co. v. Jacobsen (2001) 25 Cal.4th 489 (Blue Ridge) that “An insurer may agree to defend a suit subject to a reservation of rights. [Citation.] In this manner, an ‘insurer meets its obligation to furnish a defense without waiving its right to assert coverage defenses against the insured at a later time.’ [Citation.] As we stated 35 years ago, ‘if the insurer adequately reserves its right to assert the noncoverage defense later, it will not be bound by the judgment. If the injured party prevails, that party or the insured will assert his claim against the insurer. At this time the insurer can raise the noncoverage defense previously reserved.’ [Citation.] [¶] An insurer can reserve its right to assert noncoverage unilaterally merely by giving notice to the insured. [Citations.] By accepting the insurer’s defense under these circumstances, the insured is deemed to have accepted this condition. [Citations.]” (Id. at pp. 497-498.)
The insurer who accepts a defense subject to a reservation of rights may seek reimbursement, even if the insured does not expressly agree to the settlement. Blue Ridge stated, “[T]he issue here is whether Blue Ridge may seek reimbursement for the settlement paid on the Jacobsens’ [the insured’s] behalf even in the absence of the Jacobsens’ express agreement. We conclude it may. Here, the Jacobsens were on notice both by the policy language and by Blue Ridge’s express reservation of rights when it assumed the defense that Blue Ridge might seek reimbursement from them for what were ultimately determined to be noncovered claims. Moreover, Blue Ridge notified the Jacobsens of its intention to accept what was ultimately determined to be a reasonable settlement offer, and offered the Jacobsens the opportunity to assume their own defense. Under such circumstances, Blue Ridge satisfied the prerequisites for seeking reimbursement for noncovered claims included in a reasonable settlement payment: (1) a timely and express reservation of rights; (2) an express notification to the insureds of the insurer’s intent to accept a proposed settlement offer; and (3) an express offer to the insureds that they may assume their own defense when the insurer and insureds disagree whether to accept the proposed settlement.” (Blue Ridge, supra, 25 Cal.4th at p. 502, italics added.)
The undisputed record shows that Fire Insurance Exchange satisfied the Blue Ridge prerequisites for seeking reimbursement for the noncovered claims included in the settlement of the Roe lawsuit. It is undisputed that Giovanni was (1) on notice both by the language of the policy and by Fire Insurance Exchange’s repeated, express, timely reservation of rights when it assumed the defense that Fire Insurance Exchange would seek reimbursement from Giovanni for what are conceded to be noncovered claims. Additionally, the evidence submitted by Fire Insurance Exchange in opposition to Giovanni’s summary judgment motion shows indisputably that Fire Insurance Exchange (2) notified Giovanni of its intention to accept the Roe plaintiffs’ settlement offer along with its explanation for why it deemed the settlement to be reasonable. Giovanni effectively concedes the reasonableness of that settlement. Finally, Fire Insurance Exchange (3) repeatedly offered Giovanni the opportunity to reject the settlement offer and assume his own defense. (Blue Ridge, supra, 25 Cal.4th at p. 503.)
In sum, Fire Insurance Exchange carried its burden in the cross-motions for summary judgment to show, there being no dispute of fact, that Fire Insurance Exchange was entitled to reimbursement of the costs of defending Giovanni and settling the uncovered Roe lawsuit against him as a matter of law (Blue Ridge, supra, 25 Cal.4th at p. 502) and so the trial court properly granted Fire Insurance Exchange’s summary judgment motion.
b. Giovanni did not carry his burden in his cross-motion to demonstrate a complete defense to Fire Insurance Exchange’s causes of action
In his cross-motion for summary judgment, Giovanni asserted there was no dispute that (1) he never consented to Fire Insurance Exchange’s defense; (2) he never consented to the settlement; (3) Fire Insurance Exchange paid the settlement as a volunteer; and (4) Fire Insurance Exchange colluded with counsel for the Roe plaintiffs against Giovanni and forced Giovanni into a settlement. Therefore, he contends, as a matter of law, Fire Insurance Exchange had unclean hands, which fact prevented it from obtaining the equitable relief it seeks in its complaint. We disagree.
(i) Giovanni requested that Fire Insurance Exchange defend him
Contrary to Giovanni’s assertion, the record shows that he did not protest the Fire Insurance Exchange defense. According to the record, the parties stipulated that Giovanni tendered the Roe lawsuit to Fire Insurance Exchange for a defense. Manifestly, Giovanni cannot create a dispute after having stipulated that his defense was tendered to Fire Insurance Exchange by asserting otherwise in his subsequent statement of facts. Indeed, Marco Brambilla’s letter tendering the Roe lawsuit to Fire Insurance Exchange is in the record and indisputably requested a defense on behalf of all four Brambillas. The record also shows indisputably that as late as March 21, 2005, two weeks before Fire Insurance Exchange settled the Roe lawsuit, Giovanni, through his attorney continued to request that Fire Insurance Exchange provide him Cumis counsel. None of the correspondence from Safarian reflects a request that Fire Insurance Exchange withdraw its defense on Giovanni’s behalf. Hence, Fire Insurance Exchange properly undertook to resolve the Roe lawsuit on his behalf.
(ii) Giovanni’s consent to the settlement was not required
Giovanni contends, “Over [Giovanni’s] repeated protests, [Fire Insurance Exchange] defended him in the Underlying Action anyway” and “settled the suit without [Giovanni’s] input and consent.”
The record indeed shows that Giovanni did not transmit his protest of or consent for the settlement. After the Roes made an offer of $155,000 in mediation, Arriandiaga notified Safarian of the proposed settlement and gave Giovanni the opportunity to reject it. Arriandiaga asked for “a decision from the insureds as soon as possible” about whether they agreed with the proposed settlement and “some agreement . . . about exactly which insured(s) you want settled out of the underlying lawsuit and which insured(s) you do not want to be settled out of that case . . . .” (Emphasis in original.) Rather than to reject the settlement or opt out of it, Giovanni did not respond.
As a matter of law, Giovanni’s consent is irrelevant. Where the insurance policy grants the insurer authority to defend any claim for covered damages and the right to settle any claim within policy limits, the insurer need not obtain the insured’s consent before settling within policy limits. (Hurvitz v. St. Paul Fire & Marine Ins. Co. (2003) 109 Cal.App.4th 918, 929-931.) The policy here entitled Fire Insurance Exchange to settle any claim it considered proper up to the policy limits. Therefore, once having accepted tender of the defense subject to a reservation of rights, Fire Insurance Exchange was not required to obtain Giovanni’s consent.
More relevant than Hurvitz where the claim was covered, in Blue Ridge the claims were not covered by the policy (Blue Ridge, supra, 25 Cal.4th at p. 496) and still the insured’s consent for the settlement was not needed. (Id. at p. 502 [“the issue here is whether Blue Ridge may seek reimbursement for the settlement paid on the Jacobsens’ behalf even in the absence of the Jacobsens’ express agreement. We conclude it may.” (Italics added.)].) The reason it was not necessary is that “an insurer that fails to accept a reasonable settlement offer within the policy limits because it does not believe the policy provides coverage, assumes the risk it will be held liable for all resulting damages including a judgment that exceeds the policy limits. [Citation.]” (Id. at p. 498, citing Johansen v. California State Auto. Assn. Inter-Ins. Bureau (1975) 15 Cal.3d 9, 12, 15.) The insurer is “obligated to accept a reasonable settlement offer as part of its duty of good faith and fair dealing . . . . [Citations.]” (Id. at p. 504.) By satisfying the three Blue Ridge prerequisites, the insurer is freed from the obligation of obtaining consent. To conclude otherwise would be to ignore the express holding of Blue Ridge. It would also allow Giovanni to tender the case to Fire Insurance Exchange, fail to respond to Fire Insurance Exchange’s repeated inquiries about whether he wanted to opt out of the settlement, and then force Fire Insurance Exchange to pay the settlement and surrender its right to recourse against him, all for claims he concedes are not covered. According to both Hurvitz and Blue Ridge, Giovanni’s lack of consent has no legal effect on Fire Insurance Exchange’s right to recovery under the undisputed facts of this case.
(iii) Fire Insurance Exchange was not a volunteer
We are unpersuaded by Giovanni’s argument that Fire Insurance Exchange paid the settlement as a volunteer. Blue Ridge rejected the same argument offered by the insured there, reasoning, “It is not apparent how an insurer that has been precluded from earlier resolving the question of coverage, and that is obligated to accept a reasonable settlement or risk excess exposure, acts as a volunteer in accepting that settlement merely because its insured objects to its reservation of the right to seek reimbursement. ‘Absent a final judgment of noncoverage as to any of the policies, all insurers were also under a duty to settle once liability of the insureds became reasonably clear. [Citations.] And failure of the insurers to settle under those circumstances might well have exposed them to bad faith claims by the insureds. [Citations.] Thus, the ruling is not defensible on the basis State Farm was a volunteer.’ ” (Blue Ridge, supra, 25 Cal.4th at p. 504.)
(iv) There was no evidence of collusion
Giovanni’s cross-motion for summary judgment also asserted that Fire Insurance Exchange “create[d] a sense of urgency” about the settlement, “colluding against Giovanni, their own insured, so they could then sue him for the settlement.” As evidence of this asserted collusion, Giovanni relies on Lavin’s declaration that Arriandiaga requested a “nasty” letter stating that the Roe plaintiffs’ $155,000 demand was significantly below the value of the lawsuit; that Lavin would take the offer “ ‘off the table’ ” if it was not accepted by April 4, 2005; and the Roes were “seeking $1 million or more if the case did not settle.”
Construing Giovanni’s moving papers strictly (Castillo v. Express Escrow Co., supra, 146 Cal.App.4th at p. 1306), we do not read Lavin’s declaration as evidence of Fire Insurance Exchange’s collusion with the Roe plaintiffs. Lavin’s implication in his declaration that he was reticent to send such a letter, coupled with his assertion therein that the parties had already reached an enforceable agreement to settle for $155,000, eliminate any possible inference from Lavin’s declaration of complicity between Lavin and Arriandiaga in reaching the settlement. Thus, the only reasonable inference to be drawn from the Lavin declaration is that Arriandiaga needed a letter from Lavin for some purpose other than “colluding against Giovanni,” such as obtaining approval for the settlement from her client, Fire Insurance Exchange. The declaration does not support an inference of collusion.
Also as evidence of collusion, Giovanni submitted Safarian’s opinion that Fire Insurance Exchange created a sense of false urgency about the settlement. That is not evidence that Fire Insurance Exchange created a false sense of urgency to settle. There is nothing in the record to suggest there was not a sense of urgency to settle. Roe plaintiffs sought damages in the millions of dollars for the criminal sexual molestation by Giovanni – who admitted the crime – and then settled for so little.
(v) There being no dispute about the extrinsic facts, as a matter of law, Fire Insurance Exchange did not have unclean hands
Turning to the legal issue raised by Giovanni, although “application of this defense [of unclean hands] generally rests on questions of fact [citation]” (Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 681), we conclude that the only inference to be drawn from the undisputed facts here is that Fire Insurance Exchange did not have unclean hands (cf. Carlton v. St. Paul Mercury Ins. Co. (1994) 30 Cal.App.4th 1450, 1459 [while reasonableness of insurer’s claims handling is a factual question, only inference derivable from facts is handling was not unreasonable]). First, as analyzed, Fire Insurance Exchange provided a defense at Giovanni’s behest. It also fully, forthrightly, and repeatedly asserted its reservation of rights and offered Giovanni the chance to reject the settlement. Thus, it satisfied all of the prerequisites of Blue Ridge. Giovanni’s consent to the settlement is irrelevant to the analysis, and so his failure to consent is not evidence of unclean hands. This case represents a paradigmatic example of what an insurer should do when faced with a potentially mixed coverage case. Second, there is no evidence of collusion and no evidence that the urgency was falsely created. Consequently, the doctrine cannot be applied in this case.
Finally, we note, Fire Insurance Exchange was entitled to reimbursement of the defense costs, even had it not settled the Roe lawsuit. (Buss v. Superior Court (1997) 16 Cal.4th 35, 48, 50.) The early settlement here reduced the overall amount of attorney fees and costs that would have accumulated had the Roe lawsuit proceeded to trial. And, had the case proceeded to trial, Giovanni would have had to pay the resulting judgment; had Fire Insurance Exchange paid that judgment, Giovanni still would have been indebted to the company for what would clearly have been far in excess of the amount paid in settlement. The Roe lawsuit sought well in excess of $5 million in compensatory damages and requested punitive damages. Manifestly, the $155,000 settlement fell far below the liability all four Brambillas were facing for Giovanni’s admitted, and allegedly repeated, criminal sexual molestation of a child. In short, there is no basis for concluding that Fire Insurance Exchange acted with unclean hands.
As Giovanni failed to carry his burden to demonstrate the defense of unclean hands, the trial court properly ruled against him as a matter of law.
DISPOSITION
The judgment is affirmed. Fire Insurance Exchange to recover costs on appeal.
We concur: KLEIN, P. J., KITCHING, J.