INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Naming of both defendant and its insurer permitted in complaint
While a pedestrian on a Riverside, California, roadway, Ferial Harb was killed after he was hit by a vehicle operated by Brian Bozarth. Several Harb family members (the Harbs) formally filed a complaint. The Harbs sued several parties including Brian Bozarth as well as his parents (owners of the vehicle that struck Ferial), Riverside City and County, and the State of California.
The Harbs’s complaint focused on their belief that the loss of their loved one was caused by dangerous conditions existing on public property. Specifically, they claimed that the accident location was the site of frequent collisions, was deficient in traffic signage, had too few traffic signals, suffered from poor visibility and the dangers were hidden.
It was the City of Riverside (Riverside) that took the lead answering the Harbs’s complaints. Riverside denied responsibility for the loss. A major part of its defense was that if any negligence existed, several other parties were contributors. Soon afterwards, the city submitted a cross-complaint that was immediately amended. The amended action listed many other third parties, including consultants, contractor Design Services Inc. (DSI), a design specialist, an arborist and their insurers.
The amended cross-complaint made by Riverside was particularly important. It pointed out that DSI was hired by the city to assess the area’s lighting needs, make lighting recommendations, and schedule and install replacement lighting. Because of the extent of DSI’s work, the city required that Riverside be added as an additional insured on DSI’s general liability coverage which was issued by RLI Insurance Company (RLI). Riverside held certificates of insurance as well as an endorsement from RLI documenting its insured status.
RLI filed a demurrer (a statement contesting whether an opposing party has made a legally sufficient complaint or pleading). RLI argued that Riverside was not allowed to have both it (as a defendant) appear on a lawsuit along with RLI (defendant insurer). The trial court ruled in favor of RLI, dismissing it from appearing on Riverside’s complaint. The city appealed.
The State Supreme Court noted that the trial court hung its opinion based on a reading and interpretation of an iconic state case related to Riverside’s argument used in its cross-complaint. In essence, the case ruling was upon the effect that may occur when both a party and the party’s insurer are specifically listed on the same side of a lawsuit.
State law largely prohibits this practice. It may result in creating greater awareness to jurors that significant financial resources are available to respond to requests for damages. Further, should an insurer have to defend against the suit in which it is named along with a defendant, it may create prejudice.
The state’s high court reviewed several relevant cases, including the one cited, and relied upon in the lower court’s ruling. It also pored over several relevant portions of state law. In many cases, Riverside’s cross-complaint would not be allowed. However, after examining the city’s argument more closely, the higher court determined that neither prejudice nor a problem involving knowledge of a deep pocket existed.
The State Supreme Court’s rationale was that a trial court has full discretion to examine and then determine whether a cross-complaint as opposed to a separate, additional complaint creates any issues of prejudice or conflicts of interest. Since Riverside’s argument revolved around the questions of whether RLI owed an obligation to defend the city due to it having added the city as an additional insured, as well as pure contract issues, the city’s cross-complaint was not problematic. The court reversed and remanded the trial court decision to be reheard in light of its findings.
City of Riverside v. RLI Insurance Company—Court of Appeal, Fourth Appellate District, Division One, State of California—No. D085905—March 20, 2026.
