Plausible reasons support both conclusions. Cases permitting discovery include Brackett v. Woodall Food Products, Inc., D.C.E.D.S.D.Tenn.1951, 12 F.R.D. 4; Hurt v. Cooper, D.C.W.D.Ky.1959, 175 F.Supp. 712; Orgel v. McCurdy, D.C.S.D.N.Y.1948, 8 F.R.D. 585; Superior Insurance Co. v. Superior Court, 1951, 37 Cal.2d 749, 235 P.2d 833; Pettie v. Superior Court, 1960, 178 Cal.App.2d 680, 3 Cal.Rptr. 267; Maddox v. Grauman, Ky.1954, 265 S.W.2d 939, 41 A.L.R.2d 964; Lucas v. District Court, 1959, 140 Colo. 510, 345 P.2d 1064; People ex rel. Terry v. Fisher, 1957, 12 Ill.2d 231, 145 N.E.2d 588. Cases denying discovery include McNelly v. Perry, D.C.E.D.Tenn.1955, 18 F.R.D. 360; Roembke v. Wisdom, D.C.S.D.Ill.1958, 22 F.R.D. 197; Gallimore v. Dye, D.C.E.D.Ill.1958, 21 F.R.D. 283; McClure v. Boeger, D.C.E.D.Pa.1952, 105 F.Supp. 612; Jeppeson v. Swanson, 1955, 243 Minn. 547, 68 N.W.2d 649; Brooks v. Owens, Fla. 1957, 97 So.2d 693; State ex rel. Allen v. Second Judicial District Court, 1952, 69 Nev. 196, 245 P.2d 999; Peters v. Webb, Okl.1957, 316 P.2d 170; Di-Pietruntonio v. Superior Court, 1958, 84 Ariz. 291, 327 P.2d 746; Vernastro v. Grecco, 21 Conn.Supp. 165, 149 A.2d 703; Ruark v. Smith, 1 Storey, Del., 420, 147 A.2d 514.
"[T]he statute (Code Civ. Proc., § 2016, subdivision (b)) expressly provides that discovery may be had as to any matter which is relevant to the subject matter involved in the pending action, with added proviso that inadmissibility at trial is not ground for objection if the information sought appears to be reasonably calculated to lead to the discovery of admissible evidence." ( Pettie v. Superior Court, 178 Cal.App.2d 680, 688 [ 3 Cal.Rptr. 267].) As to the new discovery procedures authorized by 1957 amendments to the Code of Civil Procedure (Stats.
Laddon then held that the defendant physician must answer interrogatories asking whether he carried malpractice insurance at the time in issue, and if so, the name and address of the insurer and the policy limits. In Pettie v. Superior Court (1960), 178 Cal.App.2d 680 [ 3 Cal.Rptr. 267], a case dealing with discovery in a personal injury action resulting from the claimed negligent operation of an automobile, the court stated that inquiry as to the existence and policy limits of liability insurance is permitted primarily upon the grounds that section 11580 creates a contractual relation between the insurer under a liability insurance policy and third persons who are negligently injured by the assured, and that a plaintiff in a personal injury action has a discoverable interest in a defendant's liability insurance which arises with the pendency of the action against the assured. Pettie further states that while the matter of a liability policy is not within the issues determinable in a personal injury action, nor is information concerning it reasonably calculated to lead to the discovery of admissible evidence, it is "relevant to the subject matter" which is one of the grounds for discovery provided by section 2016, subdivision (b), Code of Civil Pro
The basic question here is whether the information as to the defendant's financial condition here sought by plaintiffs is discoverable under the circumstances of this case. While defendant concedes that plaintiffs may have pretrial discovery with respect to the existence and amount of defendant's public liability insurance under Laddon v. Superior Court, 167 Cal.App.2d 391 [ 334 P.2d 638], and Pettie v. Superior Court, 178 Cal.App.2d 680 [ 3 Cal.Rptr. 267], he contends that the rule of those cases should not be extended to permit discovery of a defendant's other assets. We agree.
(2) Evidence of a tort defendant's liability insurance is generally unrelated to a party's claims or defenses at trial; hence the common law rule has long been that such insurance coverage evidence is inadmissible at trial. ( Laddon v. Superior Court, supra, 167 Cal.App.2d 391, 396 ( Laddon); Pettie v. Superior Court (1960) 178 Cal.App.2d 680, 690 [ 3 Cal.Rptr. 267] ( Pettie).) The rule is codified in Evidence Code section 1155, which provides that "[e]vidence that a person was, at the time a harm was suffered by another, insured wholly or partially against loss arising from liability for that harm is inadmissible to prove negligence or other wrongdoing."
Each of these purposes was generally expressed in the case of Hickman v. Taylor, 329 U.S. 495 [67 S.Ct. 385, 91 L.Ed. 451], which interpreted the federal rules of discovery in 1947, and of which the California Legislature is deemed to have been cognizant when adopting those rules. Similar concepts of the purposes of discovery were expressed in Pettie v. SuperiorCourt, 178 Cal.App.2d 680, at p. 689 [ 3 Cal.Rptr. 267], and in Caryl Richards, Inc. v. Superior Court, 188 Cal.App.2d 300 [ 10 Cal.Rptr. 377]. While the discovery act was thus intended to take the "game" element out of trial preparation, it was not intended to adversely affect the general adversary nature of litigation under our system of law.
As a result of that statute, a contractual relationship was created between the insurer and every person who might be injured by the insured, giving the injured person a "discoverable interest" in the existence and terms of the defendant's liability policy. ( Superior Ins. Co. v. Superior Court (1951) 37 Cal.2d 749, 754 [ 235 P.2d 833]; Pettie v. Superior Court (1960) 178 Cal.App.2d 680, 684-688 [ 3 Cal.Rptr. 267] ( Pettie); Laddon, supra, 167 Cal.App.2d at p. 395.) The Pettie court noted in dicta that allowing such discovery could also help settle more cases because plaintiffs could learn whether there might be no more than a nominal recovery that would not justify extensive trial preparation and, because an insurer generally steps into the shoes of its insured, the plaintiff would be able to deal with his true litigation adversary.
However, the California case law recognizes a broad right of discovery in this area. See, e.g., Pettie v. Superior Court (1960) 178 Cal.App.[2]d 680 [ 3 Cal.Rptr. 267]; Smith v. Superior Court (1961) 189 Cal.App.[2]d 6 [ 11 Cal.Rptr. 165, 88 A.L.R.2d 650]. In 1970 the Federal Rules of Civil Procedure were amended to include explicit recognition of the discoverability of liability insurance information.
Had Claimants filed personal injury lawsuits, there is no question the policy limits of the insurance contracts would have been discoverable. ( Laddon v. Superior Court (1959) 167 Cal.App.2d 391, 396 [ 334 P.2d 638]; Pettie v. Superior Court (1960) 178 Cal.App.2d 680, 683 [ 3 Cal.Rptr. 267]; cf. Smith v. Superior Court (1961) 189 Cal.App.2d 6, 11 [ 11 Cal.Rptr. 165, 88 A.L.R.2d 650].) Additionally, had Claimants attempted to perpetuate testimony by collateral proceedings, the existence of an insurance policy and its limits would have been discoverable.
( Darbee v. Superior Court (1962) 208 Cal.App.2d 680, 688 [ 25 Cal.Rptr. 520].) Information is "relevant to the subject matter" if its discovery will tend to promote settlement ( Pettie v. Superior Court (1960) 178 Cal.App.2d 680, 688 [ 3 Cal.Rptr. 267] ) or assist the party in preparing for trial ( Davies v. Superior Court (1984) 36 Cal.3d 291, 301 [ 204 Cal.Rptr. 154, 682 P.2d 349]). (5b) Clearly, discovery of the terms and conditions of State Farm's settlement of the Eins' property damage claim could assist in reaching a settlement or preparing for trial in the present action. Therefore, the first prong of the discoverability test is met.