The Travelers Indemnity Co. of Conn. v. Navigators Specialty Ins. Co. CA4/1

Filed 9/22/21 The Travelers Indemnity Co. of Conn. v. Navigators Specialty Ins. Co. CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

THE TRAVELERS INDEMNITY D078852
COMPANY OF CONNECTICUT,

Plaintiff and Appellant,
(Super. Ct. No. CV275515)
v.

NAVIGATORS SPECIALTY
INSURANCE COMPANY et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of Santa Clara County,
Mary E. Arand, Judge. Reversed and remanded.
The Aguilera Law Group, A. Eric Aguilera, Raymond E. Brown and
Lindsee B. Falcone for Plaintiff and Appellant.
Morison & Prough, Prough Law, Michael D. Prough and Dean C.
Burnick for Defendant and Respondent Mt. Hawley Insurance Company.
Gordon Rees Scully Mansukhani, Matthew G. Kleiner, George P.
Soares and Tiffany Chiu for Defendant and Respondent Navigators Specialty
Insurance Company.
 The Travelers Indemnity Company of Connecticut (Travelers) appeals
from an order sustaining the demurrers filed by Navigators Specialty
Insurance Company (Navigators) and Mt. Hawley Insurance Company (Mt.
Hawley) to the third amended complaint. Travelers contends that the trial
court incorrectly concluded that the causes of action for equitable
contribution and equitable indemnity fail to state a claim. Travelers also
argues that, in the event we contend that the trial court properly sustained
the demurrers, we should order that Travelers be given leave to amend its
complaint to plead a claim for equitable subrogation.
We conclude that the trial court erred in sustaining the demurrers to
both the equitable contribution and equitable indemnity causes of action.
Accordingly, we reverse the judgment and remand for further proceedings.
I.
FACTUAL AND PROCEDURAL BACKGROUND
In the instant action, Travelers seeks to recover from other insurance
carriers some or all of the amounts it paid to defend TF McGuckin, Inc.,
(TFM) in an underlying construction defect litigation.
A. The Underlying Construction Defect Action and Travelers’ Agreement to
Provide a Defense to TFM Subject to a Reservation of Rights
As alleged by Travelers,1 the underlying construction defect litigation
was filed on December 15, 2010, in a complaint entitled Corvin Business
Center Owners’ Association, et al. v. Corvin Commercial Condominiums, LLC,
et al., Santa Clara County Superior Court, Case No. 110CV189732 (the
construction defect action). TFM was allegedly the “general

1 As this appeal is from an order sustaining demurrers, we necessarily
base our factual recitation on the facts as they are alleged in Travelers’
operative third amended complaint, along with any documents subject to
judicial notice.

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contractor/developer” of a condominium construction project that contained
construction defects.
Travelers alleges that, as part of the condominium construction project,
TFM entered into agreements with subcontractors. Among those
subcontractors were F&F Steel and Stairway, Inc. (F&F) and Calvac Inc. dba
Calvac Paving (Calvac). According to Travelers, each of TFM’s agreements
with its subcontractors contained a provision which required the
subcontractor to defend and indemnify TFM with respect to any claim or
liability arising out of that subcontractor’s work on the construction project.
Further, as Travelers alleged, the agreements between TFM and its
subcontractors required each subcontractor to maintain general liability
insurance and to name TFM as an additional insured on the subcontractors’
insurance policies. Navigators allegedly issued general liability insurance
policies to F&F that met this requirement. Travelers allegedly issued such
insurance policies to Calvac.
After the construction defect action was filed, Travelers conducted an
investigation and decided to provide TFM with a defense subject to a

reservation of rights.2 Travelers’ agreement to provide a defense was based
on its conclusion that “the damage alleged to the Project actually or
potentially falls within the scope of the indemnity and defense obligations of
the subcontractors, and each of them, as set forth in their subcontract
agreements with [TFM].” Therefore, “[s]ubject to a reservation of rights and
based on a good faith and reasonable belief that it had a duty to do so,

2 At the time it filed its third amended complaint in June 2018, Travelers
had allegedly paid over $498,000 to defend TFM. According to the parties,
TFM was dismissed with prejudice from the construction defect action in
2017, and Travelers is no longer paying any defense costs to TFM.

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[Travelers] agreed to provide [TFM] with a defense to the Construction Defect
Action pursuant to policies issued to [Calvac].”
B. Travelers Files the Instant Action Against Navigators and Mt. Hawley
In January 2015, Travelers filed the instant action to recover from
various third parties some or all of the defense costs that it paid to defend
TFM in the construction defect action. Travelers’ first amended complaint
added Navigators and Mt. Hawley as defendants. Mt. Hawley was named as

a defendant because it allegedly issued insurance policies to TFM.3
Navigators was added as a defendant because it allegedly issued insurance
policies to F&F.
Travelers’ first amended complaint (and subsequently, identically, its
second amended complaint) alleged three causes of action against Navigators
and Mt. Hawley: declaratory relief, equitable contribution, and equitable
indemnity. Specifically, Travelers alleged that both Mt. Hawley and
Navigators had a duty to defend TFM in the construction defect litigation
based on their applicable insurance policies but failed to comply or fully
comply with that obligation. Therefore, Travelers sought a declaration that
TFM’s defense costs should be equitably apportioned between it, Mt. Hawley,
and Navigators. Travelers also sought an order requiring that Mt. Hawley
and Navigators be required to reimburse an equitable share of the defense
costs already paid by Travelers, either under the principle of equitable

3 The only information Travelers alleged about the insurance policies Mt.
Hawley issued to TFM was as follows: “[Travelers] is informed and believes,
and thereupon alleges, that Mt. Hawley insured [TFM] via policy number
MGL0141639 and MGL0149236, for the periods of 1/22/05 - 1/22/06 and
1/22/06 - 1/22/07, and is informed and believes, and thereupon alleges that
Mt. Hawley has a duty to defend [TFM] against the Construction Defect
Action pursuant to the terms and conditions of such policy.”

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contribution, or in the alternative, the principle of equitable indemnity. In
the equitable contribution cause of action, Travelers alleged, “To the extent
that [Travelers] pays or is required to pay more than its equitable share of
any sums attributable to [TFM’s] defense against the Construction Defect
Action, [Travelers] is entitled to recover from Insurer Defendants, and each of
them, who paid less than their equitable share.” In the cause of action for
equitable indemnity, Travelers alleged that “Insurer Defendants . . . are
primarily and/or exclusively liable for the defense costs of [TFM], and thus in
equity are required to reimburse [Travelers] for their equitable share of said
defense costs.”
C. Travelers Files a Third Amended Complaint
In March 2018, Travelers filed a motion for leave to file a third
amended complaint. Travelers explained that recently-obtained evidence
called into question whether the insurance policies it issued to Calvac gave
rise to a duty to defend TFM in the construction defect action, and that
Travelers had been “deceived into providing a defense for [TFM].”
Specifically, Travelers obtained evidence showing that TFM and Calvac had
signed a new subcontractor agreement only after the construction defect
action was filed, but that the agreement was fraudulently backdated to make
it appear that it was entered into at the time of the construction project.
Travelers explained that the subcontractor agreement between Calvac and
TFM in existence prior to the filing of the construction defect action did not
require Calvac to obtain additional insured coverage for TFM. According to
Travelers, the backdating of the agreement was significant because
Travelers’ insurance policies state that coverage for TFM as an additional
insured “is not triggered . . . unless there is a prior written agreement
requiring Calvac to obtain such coverage.” (Bolding omitted.) Travelers

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believed that because there was not a “prior written agreement,” it never had
any duty to provide a defense to TFM in the construction defect action.
Travelers sought to amend its complaint to reflect the theory that because it
never had any duty to defend TFM, it was “entitled to full reimbursement of
what it paid to defend the [construction defect] action.” (Italics added.)
The trial court granted leave to amend. In the third amended
complaint, the equitable contribution and equitable indemnity causes of
action remained the same as in the previous versions of the complaint.
Specifically, Travelers sought an order, through those causes of action, that
Navigators and Mt. Hawley be required to reimburse an equitable share of
TFM’s defense costs that were paid by Travelers. However, to reflect its new
theory that it never owed any duty to defend TFM, the third amended
complaint contained an amended declaratory relief cause of action.
The first subpart of the declaratory relief cause of action in the third
amended complaint identified the following issues in dispute for which a
declaration was sought:
“a. Insurer Defendants had and have a duty to defend [TFM]
against the claims, demands, actions and causes of action
asserted against [TFM] in the Construction Defect Action;

“b. Insurer Defendants had and have an equitable duty and
responsibility to pay the entire costs of defense incurred on behalf
of [TFM]; [¶] and

“c. The fees and costs associated with the defense of [TFM]
should be equitably apportioned between and among the Insurer
Defendants, under applicable law and equitable principles.”
(Italics added.)

The second subpart of the declaratory relief cause of action identified
the following issues in dispute:

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 “a. [Travelers] did not have a duty to defend [TFM] against the
claims, demands, actions and causes of action asserted against
[TFM] in the Construction Defect Action;

“b. [Travelers] did not have an equitable duty and responsibility
to pay any portion of the costs of defense incurred on behalf of
[TFM]; and

“c. The fees and costs of defending [TFM] have been and are
being borne disproportionately by [Travelers].” (Italics added.)

The third amended complaint also added a sentence to its general
allegations to reflect Travelers’ newly developed belief that it did not owe any
duty to defend. Specifically, Travelers stated that although it had agreed,
subject to a reservation of rights, to provide TFM with a defense,
“[s]ubsequent facts revealed, however, that [Travelers’] belief that it owed a
duty to defend [TFM] was erroneous and in actuality [Travelers] owed no
such duty.”
D. Navigators’ and Mt. Hawley’s Demurrers to the Third Amended
Complaint
Navigators and Mt. Hawley both filed demurrers to the third amended
complaint.
First, with respect to the declaratory relief cause of action, both
Navigators and Mt. Hawley argued, among other things, that declaratory
relief regarding the duty to defend was no longer a viable cause of action
because the construction defect action had ended and Travelers was no longer
providing a defense to TFM. According to both demurrers, any dispute over
reimbursement was more properly addressed through Travelers’ claims for
monetary damages.
Next, with respect to the equitable indemnity cause of action, both
Navigators and Mt. Hawley took the position that under the governing case
law, relief based on a theory of equitable indemnity is only available between

7
insurance carriers when one carrier seeks reimbursement for payments made
in a settlement or to satisfy a judgment on behalf of an insured, not payments

made for defense costs.4
Finally, with respect to the cause of action for equitable contribution,
Navigators and Mt. Hawley took divergent approaches.
Navigators argued that based on Travelers’ allegation that it never
owed a duty to provide a defense to TFM, “Travelers cannot recover under an
equitable contribution theory because according to its own complaint, it did
not insure the same insured ([TFM]) nor the same risk ([TFM’s] liability for
construction defects) as the defendants.” For this argument, Navigators
relied on the principle that “a claim for equitable contribution requires: (1)
the insurers must share the same level of obligation; (2) on the same risk, (3)
for the same insured.”
Mt. Hawley, on the other hand, based its demurrer to the equitable
contribution cause of action solely on an argument premised on the content of
the relevant insurance policies issued by Mt. Hawley and Travelers.
Specifically, Mt. Hawley argued that if the trial court took judicial notice of
those policies, it would conclude that any coverage provided to TFM by Mt.
Hawley was excess coverage, and that any coverage provided by Travelers, on

the other hand, was primary coverage.5 Therefore, according to Mt. Hawley,

4 Mt. Hawley also argued that the equitable indemnity cause of action
against it failed on the merits based on the content of insurance policies that
it requested the trial court judicially notice. Mt. Hawley’s specific arguments
premised on the content of the insurance policies are similar to those we
explain in more detail in connection with Mt. Hawley’s demurrer to the
equitable contribution cause of action.

5 “Primary coverage provides immediate coverage upon the ‘occurrence’

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Travelers could not obtain equitable contribution from Mt. Hawley because
they “are not insurers co-obliged to share a common burden at the same level
of liability for [TFM’s] defense in the [construction defect] action,” and “their
respective policies thus do not cover the same risk.”
Also relying on the content of the insurance policies, Mt. Hawley
explained that, for two reasons, Travelers’ allegation regarding its recent
discovery of the backdated subcontractor agreement between Calvac and
TFM would not mean that Mt. Hawley was responsible, instead of Travelers,
for the defense costs paid by Travelers on behalf of TFM. First, pointing to a
provision of its own insurance policies, Mt. Hawley argued that if, as
Travelers alleged, TFM failed to enter into a written agreement with Calvac
requiring it to designate TFM as an additional insured under Calvac’s
insurance policy with Travelers, such failure would mean that TFM breached

of a ‘loss’ or the ‘happening’ of an ‘event’ giving rise to liability. . . . It is
defined as ‘insurance coverage whereby, under the terms of the policy, liability
attaches immediately upon the happening of the occurrence that gives rise to
liability. [Citation.]’ . . . In the context of liability insurance, a primary
insurer generally has the primary duty to defend and to indemnify the
insured, unless otherwise excused or excluded by specific policy language. . . .
Excess insurance provides coverage after other identified insurance is no
longer on the risk. ‘Excess’ coverage means ‘coverage whereby, under the
terms of the policy, liability attaches only after a predetermined amount of
primary coverage has been exhausted.’ ” (Fireman’s Fund Ins. Co. v.
Maryland Casualty Co. (1998) 65 Cal.App.4th 1279, 1304 (Fireman’s Fund).)
“As a general rule, there is no contribution between a primary and an excess
carrier. [Citations.] However, where different insurance carriers cover
differing risks and liabilities, they may proceed against each other for
reimbursement by subrogation rather than by contribution.” (Reliance Nat.
Indemnity Co. v. General Star Indemnity Co. (1999) 72 Cal.App.4th 1063,
1078.) As we will explain, because the insurance policies are not before us in
our review of the ruling on Mt. Hawley’s demurrer, we express no view on the
accuracy of Mt. Hawley’s representation that it provided excess coverage to
TFM and Travelers provided primary coverage.

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a condition of coverage in Mt. Hawley’s insurance policies. Mt. Hawley would
therefore not be legally obligated to provide any coverage to TFM, leaving no
basis on which Travelers could recover from Mt. Hawley under a theory of
equitable contribution. Second, Mt. Hawley argued that Travelers’ discovery
of facts negating Travelers’ duty to defend TFM would operate to extinguish
Travelers’ duty to defend only prospectively. Thus, Mt. Hawley’s coverage
would remain excess to Travelers’ primary coverage during the entire time
that Travelers provided a defense to TFM, and Travelers would have no basis
to obtain equitable contribution from Mt. Hawley.
The trial court sustained both demurrers. The trial court agreed with
Navigators and Mt. Hawley that (1) the declaratory relief cause of action
failed because the underlying action was concluded and because the
declaratory relief cause of action was improperly duplicative of the other
relief sought by Travelers; and (2) the cause of action for equitable indemnity
failed because defense costs paid by an insurance carrier cannot be the basis

for an equitable indemnity cause of action.6
With respect to the equitable contribution cause of action, the trial
court denied Mt. Hawley’s request to take judicial notice of the relevant
insurance policies, explaining that it would be improper to take judicial
notice of the policies because Travelers “raises issues as to the authenticity of

6 In sustaining the demurrers to the declaratory relief cause of action,
the trial court also found meritorious an argument that Mt. Hawley made
with respect to the issue presented for resolution in the declaratory relief
cause of action. The trial court stated, “Mt. Hawley also argues that
[Travelers] seeks inappropriate relief by requesting the Court declare it did
not have a duty to defend [TFM] in the underlying action. This argument is
persuasive. It is well-settled law that insurers have a duty to defend
potentially covered claims until evidence to the contrary is presented. . . .
Moreover, an insurer’s duty to defend can only be discharged prospectively.”

10
the policies and Mt. Hawley’s interpretation of them.” The trial court
accordingly did not rely upon any of the arguments made by Mt. Hawley
regarding the equitable contribution cause of action. Instead, the trial court
sustained both Mt. Hawley’s and Navigators’ demurrers to the equitable
contribution cause of action by relying on the argument made by Navigators.
The trial court explained,
“ ‘Equitable contribution is the right to recover from a co-
obligor who shares a liability with the party seeking
contribution.’ (North American Capacity Ins. Co. v. Claremont
Liability Ins. Co. (2009) 177 Cal.App.4th 272, 295.) Thus, to state
a cause of action for equitable contribution, the co-obligor must
share the same liability and same risk as the party seeking
reimbursement. (Fireman’s Fund Ins. Co. v. Maryland Casualty
Co. (1998) 65 Cal.App.4th 1279, 1289.)

“Here, [Mt. Hawley and Navigators] argue that [Travelers]
failed to plead it has the same liability and risk as them because
[Travelers] affirmatively alleges it did not have a duty to defend
[TFM]. This argument is persuasive.

“Throughout the [third amended complaint], [Travelers]
alleges it did not have a duty to defend [TFM] but [Mt. Hawley
and Navigators] did under their respective insurance policies.
Accepting those allegations as true, it follows that [Travelers] does
not have the same liability as [Mt. Hawley and Navigators].
Therefore, [Travelers] cannot state a claim for equitable
contribution.” (Italics added.)7

7 In discussing the equitable indemnity cause of action, the trial court
reiterated that Travelers was bound by the allegation that it did not owe a
duty to defend TFM, characterizing Travelers’ allegation as factual:
“[Travelers] is very clear that it owes no duty to [TFM] yet hints here that the
exact opposite, that it does owe a duty, may be true. While a plaintiff can
plead inconsistent causes of action, a plaintiff cannot ‘blow hot and cold as to
the facts positively stated. [Citations.]’ (Manti v. Gunari (1970) 5 Cal.App.3d
442, 449; see Steiner v. Rowley (1950) 35 Cal.2d 713, 718-719 [a plaintiff

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 The trial court sustained the demurrers without leave to amend and
entered judgments of dismissal in favor of Navigators and Mt. Hawley.
Travelers appeals from the judgments.
II.
DISCUSSION
In this appeal, Travelers challenges the trial court’s order sustaining
the demurrers of both Mt. Hawley and Navigators with respect to the causes
of action for equitable contribution and equitable indemnity. Travelers does
not challenge the trial court’s order insofar as it sustained Mt. Hawley’s and
Navigators’ demurrers to the cause of action for declaratory relief.
A. Legal Standards for Appellate Review of an Order Sustaining a
Demurrer
We begin with the legal standards governing an appeal from an order
sustaining a demurrer. “ ‘On appeal from an order of dismissal after an order
sustaining a demurrer, the standard of review is de novo: we exercise
our independent judgment about whether the complaint states a cause of
action as a matter of law.’ ” (Villafana v. County of San Diego (2020) 57
Cal.App.5th 1012, 1016.) In reviewing the complaint, “we must assume the
truth of all facts properly pleaded by the plaintiffs, as well as those that are
judicially noticeable.” (Howard Jarvis Taxpayers Assn. v. City of La
Habra (2001) 25 Cal.4th 809, 814.) We may affirm on any basis stated in the
demurrer, regardless of the ground on which the trial court based its ruling.
(Carman v. Alvord (1982) 31 Cal.3d 318, 324.)
B. The Trial Court Properly Denied Mt. Hawley’s Request to Take Judicial
Notice of the Relevant Insurance Policies

cannot plead facts that are inherently contradictory and incapable of being
reconciled].) Travelers specifically pleads that it lacked any duty to [TFM],
and then tries to claim that it did.”

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 As a preliminary matter, we first consider whether, as Mt. Hawley
argued in the trial court and continues to maintain on appeal, the trial court
should have taken judicial notice of the relevant insurance policies and
should have sustained the demurrer based on the content of those policies.
“We apply the abuse of discretion standard in reviewing a trial court’s ruling
denying a request for judicial notice (i.e., we affirm the ruling unless the
information provided to the trial court was so persuasive that no reasonable
judge would have denied the request for judicial notice).” (CREED-21 v. City
of San Diego (2015) 234 Cal.App.4th 488, 520; see also Physicians Committee
for Responsible Medicine v. Los Angeles Unified School Dist. (2019) 43
Cal.App.5th 175, 182 [applying an abuse of discretion standard of review to
the trial court’s ruling on a request to take judicial notice in the context of an
order sustaining a demurrer].)
Mt. Hawley requested judicial notice pursuant to Evidence Code
sections 451 and 452, without further specifying the relevant subdivisions of

those code sections.8 Mt. Hawley did, however, rely on a quotation from

8 Evidence Code section 451 lists categories of items for which “[j]udicial
notice shall be taken.” (Italics added.) The insurance policies at issue here
plainly do not fall within any of the categories for which mandatory judicial
notice is required. Evidence Code section 452 lists categories of items for
which the court may take judicial notice. These categories comprise:
“(a) The decisional, constitutional, and statutory law of any state
of the United States and the resolutions and private acts of the
Congress of the United States and of the Legislature of this state.
[¶] (b) Regulations and legislative enactments issued by or under
the authority of the United States or any public entity in the
United States. [¶] (c) Official acts of the legislative, executive,
and judicial departments of the United States and of any state of
the United States. [¶] (d) Records of (1) any court of this state or
(2) any court of record of the United States or of any state of the
United States. [¶] (e) Rules of court of (1) any court of this state

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Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743. Scott
stated, “Where, as here, judicial notice is requested of a legally
operative document—like a contract—the court may take notice not only of
the fact of the document and its recording or publication, but also facts that
clearly derive from its legal effect,” and that “whether the fact derives from
the legal effect of a document or from a statement within the document, the
fact may be judicially noticed where, as here, the fact is not reasonably
subject to dispute.” (Id. at p. 754, italics omitted.) Scott is inapposite because
the document being judicially noticed in that case was a government
document and was accordingly governed by Evidence Code section 452,
subdivision (c), under which judicial notice may be taken of “[o]fficial acts of
the legislative, executive, and judicial departments of the United States and
of any state of the United States.” (Scott, at p. 752.) Scott does not provide
authority allowing a court to take judicial notice of a contract between private
parties.
In the absence of any specific reference to any statutory subdivision in
sections 451 or 452 of the Evidence Code, we infer that Mt. Hawley may have
intended to seek judicial notice under Evidence Code section 452, subdivision
(h), which permits a court to take judicial notice of “[f]acts and propositions
that are not reasonably subject to dispute and are capable of immediate and

or (2) any court of record of the United States or of any state of
the United States. [¶] (f) The law of an organization of nations
and of foreign nations and public entities in foreign nations. [¶]
(g) Facts and propositions that are of such common knowledge
within the territorial jurisdiction of the court that they cannot
reasonably be the subject of dispute. [¶] (h) Facts and
propositions that are not reasonably subject to dispute and are
capable of immediate and accurate determination by resort to
sources of reasonably indisputable accuracy.”

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accurate determination by resort to sources of reasonably indisputable
accuracy.” However, case law holds that “the existence of a contract between
private parties cannot be established by judicial notice under Evidence Code
section 452, subdivision (h).” (Gould v. Maryland Sound Industries,
Inc. (1995) 31 Cal.App.4th 1137, 1145.) The existence and terms of a private
agreement are not facts that are not reasonably subject to dispute and that
can be determined by indisputable accuracy. For that reason, when a party
opposes the court’s consideration of an insurance policy in the context of a
demurrer, it is proper for the court to decline to consider the content of the
policy. (See Pastoria v. Nationwide Ins. (2003) 112 Cal.App.4th 1490, 1495,
fn. 4 [the court would not take judicial notice of an insurance policy when the
authenticity of the document was disputed and plaintiffs did not agree that
the court could consider it]; Fiorito v. Superior Court (1990) 226 Cal.App.3d
433, 438 [the trial court erred in considering “ ‘reconstructed’ ” insurance
policies attached to an unverified complaint when the defendants generally
denied all the allegations of the complaint because “[a] demurrer is not the
proper vehicle for determining the truth of disputed facts”].) Here, Travelers
strenuously objected to the trial court’s consideration of the insurance policies

that were the subject of Mt. Hawley’s request for judicial notice.9

9 Mt. Hawley points out that the insurance policies were accompanied by
certification pages from representatives of Travelers or Mt. Hawley, declaring
that the policies were true and correct copies of business records. Although
those certifications might constitute an adequate evidentiary basis for
authenticating the documents if they were presented to the court as part of a
fact-based proceeding, such as a summary judgment motion, they do not
exempt Mt. Hawley from the fundamental rule that private agreements are
generally not proper subjects of judicial notice when the opposing party
protests.

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 We therefore conclude that there was no basis in Evidence Code
sections 451 or 452 for the trial court to have taken judicial notice of the
insurance policies identified by Mt. Hawley. As the insurance policies were
not properly before the trial court, and accordingly are not properly before us,
we do not consider any of Mt. Hawley’s appellate arguments that depend on
the content of those documents.
C. The Trial Court Erred in Sustaining the Demurrers to the Equitable
Contribution Cause of Action
We now turn to the first of the two causes of action at issue in this
appeal: equitable contribution. Having concluded that none of Mt. Hawley’s
arguments that depend on the content of the relevant insurance policies are
properly before us, we focus solely on determining whether, as the trial court
ruled, there is merit to the argument made below by Navigators in support of

the demurrer.10
As noted, Navigators argued, and the trial court held, that the
allegations in Travelers’ third amended complaint established that Travelers
could not state a claim for equitable contribution. Specifically, the trial court
focused on Travelers’ allegation that, due to the purportedly backdated
subcontractor agreement between TFM and Calvac, Travelers never had a
duty to provide a defense to TFM.
The trial court’s ruling was based on the general principle that “the
doctrine of equitable contribution applies to insurers who share the same
level of obligation on the same risk as to the same insured.” (Fireman’s Fund,

10 With respect to the equitable contribution cause of action, although Mt.
Hawley’s demurrer did not advance the argument made by Navigators in the
trial court, Mt. Hawley now contends in its appellate briefing that the
argument has merit and we should affirm the trial court’s ruling on that
basis.

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supra, 65 Cal.App.4th at p. 1294, fn. 4.) More specifically, “[i]n the insurance
context, the right to contribution arises when several insurers are obligated
to indemnify or defend the same loss or claim, and one insurer has paid more
than its share of the loss or defended the action without any participation by
the others. Where multiple insurance carriers insure the same insured and
cover the same risk, each insurer has independent standing to assert a cause
of action against its coinsurers for equitable contribution when it has
undertaken the defense or indemnification of the common insured. Equitable
contribution permits reimbursement to the insurer that paid on the loss for
the excess it paid over its proportionate share of the obligation, on the theory
that the debt it paid was equally and concurrently owed by the other insurers
and should be shared by them pro rata in proportion to their respective
coverage of the risk. The purpose of this rule of equity is to accomplish
substantial justice by equalizing the common burden shared by coinsurers,
and to prevent one insurer from profiting at the expense of others.” (Id. at
p. 1293.) Following these principles, trial court observed that Travelers
would not have a valid claim for equitable contribution if it was not among
the insurance carriers obligated to provide a defense to TFM in the
construction defect action.
Travelers does not take issue with these fundamental principles.
Instead, it argues that the trial court erred in relying upon the allegations of
the third amended complaint to establish that equitable contribution was not
available to Travelers. The trial court stated, “Throughout the [third
amended complaint], [Travelers] alleges it did not have a duty to defend
[TFM] but [Mt. Hawley and Navigators] did under their respective insurance
policies. Accepting those allegations as true, it follows that [Travelers] does

17
not have the same liability as [Mt. Hawley and Navigators]. Therefore,
[Travelers] cannot state a claim for equitable contribution.” (Italics added.)
Travelers argues that the trial court’s analysis was flawed for two
reasons. First, the third amended complaint did adequately plead all the
necessary elements of a cause of action for equitable contribution because it
alleged Travelers paid TFM’s defense costs under a good faith belief it had a
duty to do so. Second, although the third amended complaint pled, in the
alternative, that Travelers never owed any duty to pay any defense costs to
TFM and should be fully reimbursed by Mt. Hawley and Navigators, that is
an alternative allegation regarding the legal significance of certain facts,
which cannot serve to defeat Travelers’ properly pleaded cause of action for
equitable contribution. As we will explain, Travelers’ position has merit.
First, the third amended complaint, on its face, set forth allegations
that stated a cause of action for equitable contribution against Mt. Hawley
and Navigators. In the “General Allegations” section of the third amended
complaint, Travelers alleged, “Subject to a reservation of rights and based on
a good faith and reasonable belief that it had a duty to do so, [Travelers]
agreed to provide [TFM] with a defense to the Construction Defect Action
pursuant to policies issued to [Calvac]. . . . To date, [Travelers] has incurred
in excess of $498,000 in attorneys’ fees, costs and/or expert fees providing
[TFM] with a defense to the Construction Defect Action.” In the equitable
contribution section of the third amended complaint, Travelers alleged,
“32. [Travelers] contends that, with respect to the Construction
Defect Action, each Insurer Defendant is obligated to contribute
to [TFM’s] defense.

“33. To date, Insurer Defendants have failed to contribute a full
and equitable share of the costs incurred and continuing to be
incurred in the defense of [TFM] against the Construction Defect
Action.

18
 “34. To the extent that [Travelers] paid more than its equitable
share of any sums attributable to [TFM’s] defense against the
Construction Defect Action, [Travelers] is entitled to recover from
Insurer Defendants, and each of them, who paid less than their
equitable share.”

These allegations adequately pled a cause of action for equitable
contribution because they alleged that “several insurers are obligated to
indemnify or defend the same loss or claim, and one insurer has paid more
than its share of the loss or defended the action without any participation by

the others.” (Fireman’s Fund, supra, 65 Cal.App.4th at p. 1293.)11
Despite the existence of these allegations stating a claim for equitable
contribution, the trial court concluded that based on other allegations in the
third amended complaint, which the trial court “[a]ccept[ed] . . . as true,”
Travelers could not prevail on its claim for equitable contribution. Although
the trial court did not specify the portions of the third amended complaint
that it was “[a]ccepting . . . as true,” it is evident that the trial court was
referring to two sets of allegations that Travelers added to the third amended
complaint. First, in the “General Allegations” section, Travelers added a
sentence stating, “Subsequent facts revealed, however, that [Travelers’] belief
that it owed a duty to defend [TFM] was erroneous and in actuality

[Travelers] owed no such duty.”12 (Italics added.) Second, the declaratory

11 The allegations are substantively the same as the allegations contained
in the first and second amended complaints.

12 The sentence (italicized below) appears in the following context in
paragraph 14 of the third amended complaint: “Subject to a reservation of
rights and based on a good faith and reasonable belief that it had a duty to do
so, [Travelers] agreed to provide [TFM] with a defense to the Construction
Defect Action pursuant to policies issued to [Calvac]. Subsequent facts
revealed, however, that [Travelers’] belief that it owed a duty to defend [TFM]

19
relief cause of action was substantially changed in the third amended
complaint, in that it sought a declaration on the issue of whether Mt. Hawley
and Navigators were obligated to pay all of TFM’s defense costs, and
Travelers was obligated to pay none of them. Among other things, the
declaratory relief cause of action alleged: “[Travelers] did not have a duty to
defend [TFM] against the claims, demands, actions and causes of action
asserted against [TFM] in the Construction Defect Action”; “[Travelers] did
not have an equitable duty and responsibility to pay any portion of the costs of
defense incurred on behalf of [TFM]”; and “Insurer Defendants had and have
an equitable duty and responsibility to pay the entire costs of defense
incurred on behalf of [TFM].” (Italics added.) The trial court reasoned that
if, as Travelers alleged in these portions of the third amended complaint, it
was not obligated to pay any of TFM’s defense costs due to Travelers’
contention that it never had a duty to defend TFM, then “[Travelers] does not
have the same liability as [Mt. Hawley and Navigators]” and “[t]herefore,
[Travelers] cannot state a claim for equitable contribution.” As we will
explain, the trial court’s reasoning was flawed.
Although a court must “treat[ ] [a] demurrer as admitting all material
facts properly pleaded,” it “does not, however, assume the truth of
contentions, deductions or conclusions of law.” (Aubry v. Tri-City Hospital
Dist. (1992) 2 Cal.4th 962, 967.) The trial court assumed that Travelers’
allegation that it owed no duty to defend TFM was a factual allegation.
Accordingly, the trial court concluded it was obligated to accept that

was erroneous and in actuality [Travelers] owed no such duty. To date,
[Travelers] has incurred in excess of $498,000 in attorneys’ fees, costs and/or
expert fees providing [TFM] with a defense to the Construction Defect
Action.” (Italics added.)

20
allegation as true for the purpose of ruling on the demurrers. However, the
trial court’s approach was faulty because Travelers’ allegation that it owed no
duty to defend TFM was a legal allegation that was to be resolved in the
course of the litigation, not a factual allegation that should be treated as true
for the purpose of a demurrer. (Feldman v. Illinois Union Ins. Co. (2011) 198
Cal.App.4th 1495, 1500 (Feldman) [“whether the policy provides a potential
for coverage and a duty to defend calls for interpretation of an insurance
policy and thus is a question of law”].) “Whether an insurer owes an insured
a duty to defend a third party’s lawsuit depends, in the first instance, on a
comparison of the allegations of the third party’s complaint and the terms of
the insured’s policy.” (Albert v. Truck Ins. Exchange (2018) 23 Cal.App.5th
367, 377-378.) Thus, in ruling on the demurrers, the trial court should not
have assumed the truth of Travelers’ legal allegation that it lacked a duty to
defend TFM, as that legal issue had not yet been determined. (Cf. American
States Ins. Co. v. National Fire Ins. Co. of Hartford (2011) 202 Cal.App.4th
692, 703, fn. 5 [in an action in which one insurer sought to recover from
another insurer for defense and indemnity costs paid to their mutual insured,
the court explained that although the “[plaintiff insurance carrier’s]
complaint alleges [the defendant insurance carrier] was primarily liable for
the damages that occurred during [the defendant insurance carrier’s] policy
period, . . . on demurrer a court does not accept as true contentions,
deductions or conclusions of law”].)
Indeed, it is clear from the appellate briefing that there is an
unresolved dispute regarding the legal effect of Travelers’ recent discovery of
the purportedly backdated subcontractor agreement between TFM and
Calvac. Although Travelers stated in its declaratory relief cause of action
that it believed recently discovered facts about the purportedly backdated

21
agreement had the legal effect of negating its duty to pay any of TFM’s
defense costs, Mt. Hawley makes very clear that it disagrees as a matter of

law.13 Citing Scottsdale Insurance Co. v. MV Transportation (2005) 36
Cal.4th 643 at pages 655-657, and Amato v. Mercury Casualty Co. (1993) 18
Cal.App.4th 1784 at pages 1790-1793, Mt. Hawley argues, “The new facts
Travelers allegedly uncovered, years later, cannot retroactively operate to
defeat its duty to defend. . . . [¶] California law is settled that an insurer
must defend its insured on the premise that the allegations and extrinsic
facts tendered to it are true, until and unless it can definitively prove
otherwise. An insurer later acquiring facts that defeat the duty to defend
may terminate the duty prospectively, only. . . . So Travelers did,
indisputably, owe a duty to defend TFM at all times that it was defending.

Any contrary assertion is contrary to law.” (Second italics added.)14

13 Navigators’ briefing does not address the issue of whether it believes
Travelers may retroactively be determined to have had no duty to defend.
Instead, Navigators focuses solely on the fact that Travelers has taken that
position, arguing that for the purpose of the demurrers, Travelers should be
held to it.

14 As the issue is not presented in this appeal, we do not comment on the
merits of the dispute between Travelers and Mt. Hawley as to whether, under
the applicable law, there could be a set of facts based on which Travelers
could establish, on a retroactive basis, that it did not owe a duty to defend
TFM. Moreover, we make no comment on whether, as the trial court
assumed in its ruling, Travelers would be barred from pursuing an equitable
contribution cause of action against Mt. Hawley or Navigators were it to be
determined that even though Travelers paid $498,000 toward TFM’s defense
costs, in hindsight Travelers never owed a duty to defend TFM. (Cf. Herrick
Corp. v. Canadian Ins. Co. (1994) 29 Cal.App.4th 753, 762-763 [in an action
in which one insurer sought equitable contribution from another insurer for
the payment of defense costs, because it was unnecessary to reach the issue,
the court stated, “[w]e express no opinion as to the effect, if any, on [the

22
 Mt. Hawley and Navigators attempt to defend the trial court’s
approach by characterizing Travelers’ allegations as either a “judicial
admission” (as argued by Mt. Hawley) or the pleading of “contradictory and
antagonistic facts” (as argued by Navigators). However, neither of those
descriptions apply here.
First, as we have explained, Travelers’ allegation that it had no duty to
defend TFM was not a factual allegation, but rather was an allegation as to
what it believed to be the legal effect of its recent discovery of the purportedly
backdated subcontractor agreement. (Feldman, supra, 198 Cal.App.4th at
p. 1500.) Thus, there is no merit to Navigators’ contention that Travelers
should be prevented from alleging “contradictory and antagonistic facts” as to

whether it had a duty to defend TFM.15

plaintiff insurer’s] claim [for contribution] by its having proclaimed, after it
had spent almost three years defending [the insured], that it had no duty to
do so.”].)
15 We note that Navigators bases its argument on the purported principle
that there is a “bar on inconsistent pleading . . . where . . . the facts pled are
‘contradictory or antagonistic,’ ” for which it cites Steiner v. Rowley (1950) 35
Cal.2d 713, 718-719. Our Supreme Court more fully discussed the rule
regarding contradictory or antagonistic factual allegations in Faulkner v.
California Toll Bridge Authority (1953) 40 Cal.2d 317, clarifying that the rule
described in Steiner pertains to verified complaints. As our Supreme Court
stated, “[A]lthough a plaintiff may plead inconsistent counts or causes of
action in his complaint [citation] even where, as here, it be verified, if there
are no contradictory or antagonistic facts [citations], we are in accord with
the view . . . that the rule was not ‘intended to sanction the statement in a
verified complaint of certain facts as constituting a transaction in one count
or cause of action, and in another count or cause of action a statement of
contradictory or antagonistic facts as constituting the same transaction. In
short, the rule does not permit the pleader to blow both hot and cold in the
same complaint on the subject of facts of which he purports to speak with
knowledge under oath.’ ” (Faulkner, at p. 328; see also Alfaro v. Community
Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th

23
 Second, the requirements for establishing a judicial admission are not
present here. A judicial admission is “ ‘a waiver of proof of a fact by
conceding its truth, and it has the effect of removing the matter from the
issues.’ ” (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th
1264, 1271.) “To be considered a binding judicial admission, ‘the declaration
or utterance must be one of fact and not a legal conclusion, contention, or
argument.’ ” (Eisen v. Tavangarian (2019) 36 Cal.App.5th 626, 637.) “[A]
mere conclusion, or a ‘mixed factual-legal conclusion’ in a complaint, is not
considered a binding judicial admission.” (Castillo v. Barrera (2007) 146
Cal.App.4th 1317, 1324.) Here, as we have explained, Travelers’ allegation
that it did not have a duty to defend TFM is not a factual allegation.
Accordingly, it cannot be treated as a judicial admission. Moreover, “[a]
judicial admission is . . . conclusive both as to the admitting party and as to
that party’s opponent. . . . Thus, if a factual allegation is treated as a judicial
admission, then neither party may attempt to contradict it—the admitted
fact is effectively conceded by both sides.” (Barsegian v. Kessler &
Kessler (2013) 215 Cal.App.4th 446, 452.) Applying this principle, it is clear
that Travelers did not make a judicial admission. As we have explained, far
from conceding that Travelers owed no duty to defend TFM, Mt. Hawley

1356, 1381-1382 [“A plaintiff may plead inconsistent counts or causes of
action in a verified complaint, but this rule does not entitle a party to
describe the same transaction as including contradictory or antagonistic
facts,” and “[i]n such circumstances, we may accept as true the more specific
allegations.”].) Travelers’ third amended complaint was not verified, and
thus the rule cited by Navigators prohibiting the pleading of contradictory or
antagonistic facts does not apply. “[M]odern rules of pleading generally
permit plaintiffs to ‘set forth alternative theories in varied and inconsistent
counts.’ ” (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388.)

24
takes the opposite position, contending that Travelers owed a duty to defend,
which cannot be extinguished on a retroactive basis.
In sum, because Travelers is not bound by its allegation that it owed no
duty to defend TFM, the trial court erred in sustaining the demurrers to the
equitable contribution cause of action.
D. The Trial Court Erred in Sustaining the Demurrers to the Equitable
Indemnity Cause of Action
Next, we consider Travelers’ contention that the trial court erred in
sustaining the demurrers to the equitable indemnity cause of action.
The respondents’ briefs present two arguments to support the
contention that the equitable indemnity cause of action fails as a matter of
law. We consider each in turn.
1. A Cause of Action for Equitable Indemnity Is Available As
Between Insurers Even Though They Are Not Joint Tortfeasors
First, Mt. Hawley contends that the concept of equitable indemnity is
inapplicable in an action, such as this, in which one insurer sues another
insurer for reimbursement of amounts paid to an insured. Mt. Hawley
argues that the doctrine has no role here because “[e]quitable indemnity is a
tort concept, whereby several tort defendants that each breached some legal
(not contractual) duty to the tort plaintiff may seek to shift or share their
respective liabilities for any judgment or settlement. . . . Here, there is no
plaintiff who asserted tort claims against both or either of Travelers and Mt.
Hawley (and there is no judgment or settlement paid by Travelers that is to
be equitably shifted). These two insurance companies are not joint
tortfeasors, nor alleged to be tortfeasors at all.” In support, Mt. Hawley cites
Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group (2006) 143
Cal.App.4th 1036, 1040 (Stop Loss), which stated that “[i]t is well-settled in
California that equitable indemnity is only available among tortfeasors who

25
are jointly and severally liable for the plaintiff’s injury.” (Italics omitted.) As
part of the same argument, noting that an insurer’s obligation to pay defense
costs to its insured is contractual, Mt. Hawley argues that the doctrine of
equitable indemnity does not apply because “courts have repeatedly rejected
attempts to extend the doctrine of equitable indemnity to defendants’
separate contractual duties owed to a common plaintiff.”
However, the case law that Mt. Hawley relies upon for its argument
arises exclusively in contexts other than disputes between insurance carriers.
(Stop Loss, supra, 143 Cal.App.4th at pp. 1039-1040 [an insurance broker,
sued by an insured for breach of contract and negligence, filed a cross-
complaint for equitable indemnity against a medical group that allegedly
failed to submit accurate and timely claims information]; State Ready Mix,
Inc. v. Moffatt & Nichol (2015) 232 Cal.App.4th 1227, 1231 [equitable
indemnity claim by concrete supplier against civil engineer]; BFGC Architects
Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th
848, 852 [equitable indemnity claim by architect against general contractors];
Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1158-1159
[explaining the doctrine of equitable indemnity in the context of a claim made
by a property owner against a public utility company].) Because none of the
cited case law arises in the context of a dispute between insurance carriers, it
is inapposite. (See Skanska USA Civil West California District Inc. v.
National Interstate Ins. Company (S.D.Cal., Sept. 3, 2020, No. 20-CV-367-
WQH-AHG) 2020 WL 5294713, at pp. *6-*7 [rejecting the argument that
“equitable indemnity only applies to joint tortfeasors, not to claims based on
an insurance contract,” because the authority cited in support, including Stop
Loss, did not “address an action between insurers” and “California courts

26
have not foreclosed the possibility of an equitable indemnity claim in an

action between insurers”].)16
Case law and commentators recognize that an equitable indemnity
claim may be asserted in a dispute between insurance carriers, even though
they are not joint tortfeasors. In the context of litigation between insurers,
“[a]lthough courts often use the terms ‘equitable contribution,’ ‘equitable
indemnity’ and ‘equitable subrogation’ interchangeably, they are really
separate remedies that apply in discrete situations. . . . [¶] . . . [¶] . . .
Equitable contribution is a loss-sharing procedure. It lies where several
insurers insure the same risk at the same level (e.g., all primary insurers)
and one pays the entire loss. That insurer may seek equitable contribution
from the others to obtain reimbursement for a portion of what it has paid. . . .
[¶] . . . Equitable indemnity is a loss-shifting procedure. ‘Equitable
indemnity applies in cases in which one party pays a debt for which another
is primarily liable and which in equity and good conscience should have been
paid by the latter party.’ ” (Croskey et al., Cal. Practice Guide: Insurance
Litigation (The Rutter Group 2021) ¶ 8:65.1, pp. 8-26 to 8-27, quoting United
Services Auto. Assn. v. Alaska Ins. Co. (2001) 94 Cal.App.4th 638, 644-645.)
A useful summary of the applicable California law was recently
provided by a federal district court. “The case law discussing the three
principles of contribution, indemnification and subrogation in the insurance
context is surprisingly muddled; courts have often confused the principles,
thereby providing a fertile supply of quotations for parties seeking to utilize
any one of the three concepts as the need arises. As one California appellate

16 We may cite and rely upon unpublished federal court decisions as
persuasive authority. (Allen v. City of Sacramento (2015) 234 Cal.App.4th 41,
64, fn. 4.)

27
court noted, ‘[i]t is hard to imagine another set of legal terms with more
soporific effect than indemnity, subrogation, [and] contribution . . . .’ . . .
Nevertheless, distinguishing between these three equitable theories of
recovery is of import because, depending on the facts involved in a particular
action, a claim brought under the wrong theory may fail as a matter of law.
For example, ‘the right to contribution arises when several insurers are
obligated to indemnify or defend the same loss or claim, and one insurer has
paid more than its share of the loss or defended the action without any
participation by the others.’ . . . On the other hand, ‘[e]quitable subrogation
enables one insurer who has paid a debt for which another insurer is
primarily liable to sue from the perspective of the insured under the policy on
the argument that the second insurer has failed to pay.’ . . . ‘Equitable
indemnification is similar to equitable subrogation in that it also enables an
insurer that has paid an obligation which was entirely the responsibility of a
co-insurer to place the complete burden for the loss on that other party,’ but
‘[t]he party seeking reimbursement through indemnification . . . does so in his
own right (as with a contribution claim).’ ” (Travelers Indemnity Company of
Connecticut v. Hudson Insurance Company (E.D.Cal. 2020) 442 F.Supp.3d

1259, 1268-1269 (Hudson), citations omitted.)17

17 In applying California law, federal courts have come to differing
conclusions on the issue of whether a claim for equitable indemnity—like a
claim for equitable contribution—is unavailable between carriers who do not
share the same level of obligation on the same risk to the same insured.
(Compare American Alternative Ins. Corp. v. Hudson Specialty Ins.
Co. (C.D.Cal. 2013) 938 F.Supp.2d 908, 917-918 [an equitable indemnity
claim is not available to an excess carrier against a primary carrier] and
Fireman’s Fund Ins. Co. v. Commerce & Industry Ins. Co. (N.D.Cal., Nov. 7,
2000, No. C-98-1060VRW) 2000 WL 1721080, at p. *5 [same] with Hudson,
supra, 442 F.Supp.3d at pp. 1269-1270 [excess carrier may pursue a claim for

28
 Consistent with this summary, case law holds that “an insurer may
settle a claim against its insured without prejudice to its right to seek
equitable indemnity from other insurers potentially liable on the same risk on
the ground that, although the settling insurer’s policy does not provide
coverage, there is coverage under the other policies.” (Mitchell, Silberberg &
Knupp v. Yosemite Ins. Co. (1997) 58 Cal.App.4th 389, 394 (Mitchell,
Silberberg & Knupp), first italics added; see also Pines of La Jolla
Homeowners Assn. v. Industrial Indemnity (1992) 5 Cal.App.4th 714, 725-726
[“an insurer who has potential liability in the underlying lawsuit is entitled
to settle any claim alleged against it without prejudice to its right to seek
equitable subrogation or indemnity from other insurers alleged to have full or
partial liability for the underlying claim,” (italics added)]; Mt. Hawley Ins. Co.
v. Golden Eagle Ins. Corp. (C.D.Cal. 2009) 645 F.Supp.2d 878, 886 [citing
Mitchell, Silberberg & Knupp in explaining the availability of equitable
indemnity as a cause of action between insurance carriers].)
Based on the above, we reject Mt. Hawley’s contention that equitable
indemnity is limited to joint tortfeasors and therefore cannot be an
appropriate cause of action between insurance carriers when one carrier
seeks reimbursement of the amounts it has paid to an insured.

equitable indemnity against a primary carrier]; Continental Casualty Co. v.
St. Paul Surplus Lines Ins. Co. (E.D.Cal., Sept. 17, 2014, No. 2:07-CV-01744-
TLN-EFB) 2014 WL 4661087, at p. *18 [same]; and Lexington Ins. Co. v.
Sentry Select Ins. Co. (E.D.Cal., June 5, 2009, No. CV F 08-1539LJO GSA)
2009 WL 1586938, at p. *19 [same].) We are unaware of any California
authority directly on point, and the parties have pointed to none. Although it
could eventually become necessary in this action for the trial court to address
that issue, it is not presently presented, and we therefore do not express any
view on the matter.

29
 2. A Cause of Action for Equitable Indemnity May Be Based on the
Payment of Defense Costs to an Insured
Respondents’ second argument, advanced by both Mt. Hawley and
Navigators, is also the ground that the trial court gave for sustaining the
demurrers to the equitable indemnity cause of action. Specifically, as
Navigators expresses the argument, Travelers fails to state a claim for
equitable indemnity because “a cause of action for equitable indemnity does
not accrue until the indemnitee suffers loss through payment of an adverse
judgment or settlement.” (Italics added.) For their argument, the parties rely
on our Supreme Court’s statement that “ ‘a fundamental prerequisite to an
action for partial or total equitable indemnity is an actual monetary loss
through payment of a judgment or settlement’ ” (Western Steamship Lines,
Inc. v. San Pedro Peninsula Hospital (1994) 8 Cal.4th 100, 110, italics added),
as well as other cases illustrating that principle. Based on this case law, Mt.
Hawley sums up the argument: “No case has extended the doctrine to
defense costs . . . that an insurance company paid on behalf of a defendant in
an underlying lawsuit.” (Italics added.)
We reject the argument because none of the case law cited by Mt.
Hawley or Navigators arose in the context of an equitable indemnification
claim made by one insurance carrier against another. There is no reason,
outside of the context of insurance coverage litigation between general
liability carriers, for a judicial opinion to mention the payment of defense
costs when describing the types of payments that can give rise to a claim for
equitable indemnity. We therefore assign no significance to the fact that
none of the cases cited by Navigators and Mt. Hawley state that a claim for
equitable indemnity may be based on an insurance carrier’s payment of
defense costs that it believes another insurance carrier should have paid.

30
 Equitable indemnification is available to an insurer who “ ‘has paid an
obligation which was entirely the responsibility of a co-insurer.’ ” (Hudson,
supra, 442 F.Supp.3d at p. 1269, italics added.) The duty to pay defense costs
is reasonably classified as the “obligation” of an insurance carrier under a
general liability policy, just like the duty to indemnify the insured for the cost
of a settlement or a judgment. (Buss v. Superior Court (1997) 16 Cal.4th 35,
45-46 [discussing a general liability insurer’s duty to defend and duty to
indemnify the insured].) If a claim for equitable indemnity can be based on a
carrier’s obligation to pay a settlement on behalf of an insured (Mitchell,
Silberberg & Knupp, supra, 58 Cal.App.4th at p. 394), we perceive no reason
why paying defense costs would not also be sufficient to give rise to a claim
for equitable indemnity, as long as the carrier believes that another carrier
should have been the party to make those payments.
Following this principle, Travelers’ third amended complaint properly
states a cause of action for equitable indemnity because it alleges that
“Insurer Defendants . . . are primarily and/or exclusively liable for the
defense costs of [TFM], and thus in equity are required to reimburse
[Travelers] for their equitable share of said defense costs.”
E. Conclusion
In sum, we conclude that the trial court erred in sustaining Mt.
Hawley’s and Navigators’ demurrers to the causes of action for equitable

contribution and equitable indemnity.18 Because we reverse the order

18 As another argument in support of the trial court’s order sustaining its
demurrer, Navigators contends that the equities do not support the relief
sought in Travelers’ third amended complaint because “Navigators should
not have to pay Travelers for [TFM’s] wrongdoing. Equitable principles
require, in the instant case, that relief be sought from the party that engaged
in the alleged fraud, which is [TFM].” We do not reach this issue, which

31
sustaining the demurrers, we need not, and do not, consider Travelers’
alternative argument that the trial court should be ordered to grant
Travelers leave to amend to assert a cause of action for equitable
subrogation.

depends on the development of facts beyond those pled in the third amended
complaint.

32
 DISPOSITION
The judgment in favor of Mt. Hawley and Navigators is reversed, and
the matter is remanded for proceedings consistent with this opinion.

IRION, J.

I CONCUR:

HUFFMAN, Acting P. J.

I CONCUR IN THE RESULT:

O'ROURKE, J.

33