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Ford Motor Co. v. Home Insurance Co.2/2/1981
in cases of malicious prosecution.
Appellant contends that since all punitive damages are not assessed on the basis of harm caused by willful conduct, then all punitive damages are not uninsurable because the public policy expressed in Insurance Code section 250, that all losses are insurable, is limited only by Insurance Code section 533, prohibiting insurability of losses caused by the willful act of the insured.
City Products addresses the question of whether punitive damages are uninsurable as a matter of public policy as a separate and distinct issue from whether conduct is uninsurable under Insurance Code section 533. In fact, the opinion indicates that, without respect to the limitations of section 533, punitive damages are uninsurable. (City Products Corp. v. Globe Indemnity Co., supra, 88 Cal. App. 3d 31, 39.)
The City Products rule prohibits insurance coverage of punitive damages, regardless of the context of the award. It is thus broader than the
proscription in Insurance Code section 533. Section 533 relieves the insurer of the obligation to indemnify not only punitive damages, but also compensatory damages in the face of an intentional infliction of harm. This is in keeping with the long-standing public policy against indemnifying such an intentional wrongdoer.
Because the punitive damages award in City Products was based on a finding of intentional conduct, this court found that section 533 was applicable. Since the plaintiff insured had been found liable for the intentional tort of malicious prosecution, the court held that even if the insurance policy expressly provided coverage for that tort, the insurer could not, under the policy expressed in section 533, indemnify the insured. The court made it clear that this prohibition against insurability applied to both compensatory and punitive damages by distinguishing exceptions when the insurer may indemnify an insured held vicariously liable for compensatory damages resulting from the willful conduct of another. (City Products Corp. v. Globe Indemnity Co., supra, 88 Cal. App. 3d 31, 37-38.)
The question presented by appellant in the instant case is indemnity for punitive damages in product liability actions, not in intentional tort matters. The respondents apparently never refused to indemnify appellant for compensatory damages as provided in the insurance policies. The question of whether the appellant's conduct was willful so as to totally preclude indemnity under the statutory provision in section 533 is not at issue in this appeal.
For the reasons set forth above, we conclude that the trial court correctly applied the City Products prohibition against indemnity for punitive damages to the specific question of indemnity in product liability actions. In view of the public policy against insurance coverage for punitive damages, appellant could not obtain the declaration it sought.
Hence the trial court properly granted judgments dismissing appellant's complaint.
The judgments are affirmed.
Disposition
The judgments are affirmed.
Judges Footnotes
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