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Moody v. Bedford ? One Action Rule Inapplicable To Pre-Litigation Settlement

One Action Rule Does Not Apply To Insurer's Pre-Litigation Settlement Of Wrongful Death Claim

(2012) 202 Cal.App.4th 745; 12 C.D.O.S. 385

February 2012

The California Court of Appeal for the Second Appellate District reversed the trial court's order granting summary judgment in favor of defendants and held California's "one-action rule," which precludes multiple wrongful death actions against the same tortfeasor, is inapplicable to an insurer's pre-litigation settlement of an insurance claim made by an heir who misrepresented that she was the sole heir of a decedent. 

Corinthia Hood, the mother of five minor children, was killed in a head-on collision with a car driven by defendant Gregory Bedford, Jr., and owned by defendant Patricia Boyce.  Corisha Brown was Hood's adult daughter, and the half sister of Hood's minor children.  Without filing a lawsuit, Brown made a claim to the defendants' insurer, Permanent General Assurance Corporation ("Permanent General"), arising out of the death of her mother. 

Permanent General offered to settle Brown's claim for the full limits of its $100,000 policy but requested the identity of all of Hood's heirs before doing so.  Brown signed a declaration that she was the sole surviving heir and signed the release of her claim as the "sole surviving heir."

Hood's five minor children, and their guardian ad litem, filed a wrongful death action against Bedford and Boyce.  Defendants filed and prevailed on a motion for summary judgment on the basis that the "one-action rule" barred the minor plaintiffs' lawsuit.

Plaintiffs appealed.  They argued that the one-action rule does not apply unless a wrongful death lawsuit is filed by a settling heir.  Because Brown did not file a wrongful death lawsuit against defendants, but instead tendered a claim to their insurer, plaintiffs argued their claims against defendants were not barred by Brown's settlement.

The Court of Appeal reviewed the nature of wrongful death actions in California as provided in Code of Civil Procedure section 377.60, the wrongful death statute.  That statute creates a cause of action in favor of the heirs of a decedent based on their own independent pecuniary injury caused by the loss of their relative.  Recovery is in the form of a single lump sum verdict determined according to each heir's separate interest in the decedent's life.  Wrongful death actions are considered "joint, single, and indivisible" and, as a result, California's Supreme Court holds that only one action against a tortfeasor can be brought.  All heirs of a decedent should join the action as plaintiffs, or be joined as defendants, and if all heirs are not joined the defendant can move to abate the action.  Heirs that are omitted from a wrongful death action cannot sue a settling defendant; their remedy is against the settling heirs.

The protections of the rule can be waived so that the partial settlement of a wrongful death action brought by all heirs does not preclude the non-settling heirs from continuing to pursue the action.  And, the one-action rule is not a bar if a defendant settles an action brought by one or more heirs with knowledge that other heirs have not been joined.  

The Court of Appeal focused on the definition of "action."  By statutory definition in California's Code of Civil Procedure section 22, an "action" is "an ordinary proceeding in a court of justice. . . ."  Even though the one-action rule is a judicial creation, the Court of Appeal concluded it applied only to actions filed in a court and not to pre-litigation claims.  A defendant that has not previously been subject to liability in a wrongful death action is not protected by the rule.

As a result, the Court of Appeal held that defendants could not rely on the one-action rule to bar the wrongful death action filed by the minor plaintiffs.  Brown never filed a wrongful death action against defendants but, instead, made an insurance claim.  The Court of Appeal observed that Brown's representation to Permanent General was in apparent contravention of California law governing her insurance claim.  The claims adjustment process requires that a claimant be honest as to material representations in support of a claim.  However, the insurance adjustment process does not require the joinder of all heirs in a wrongful death claim. 
 
The court noted that if the defendants had wanted the procedural protections of the one-action rule, they should have required Brown to file a wrongful death action.  The Court of Appeal rejected defendants' argument that this approach contravenes the public policy favoring settlement.  Defendants are free to settle wrongful death claims outside of litigation based on their own due diligence as to the existence of additional heirs.  In doing so, defendants assume the risk that their pre-litigation settlement does not protect them from a wrongful death action by an heir omitted from that settlement.  The Court of Appeal reasoned that this strikes a fair balance between protecting the rights of heirs to be included in wrongful death claims and the rights of tortfeasors to be free from multiple claims for wrongful death.  Accordingly, the Court of Appeal reversed the judgment of the trial court and remanded the case for further proceedings.

Please click here for the opinion. 

This opinion is not final.  The Court of Appeal may modify it on rehearing or the California Supreme Court may order it depublished or grant review.  The latter two events would render the opinion unavailable as legal authority in California courts.

This and other case bulletins, as well as other publications of Gordon & Rees LLP, may be found at www.gordonrees.com

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