Business lawsuit

Appellant lessee challenged a judgment from the Superior Court of Los Angeles County (California), which found in favor of respondent lessor in its action for damages after appellant abandoned the leased premises, a hog ranch, taking with him the livestock and most of the equipment. Appellant contended that the lease was a joint venture, and that the trial court erred in denying him an accounting of the business.

Appellant lessee and respondent lessor entered into a lease for respondent's hog ranch, including the equipment and livestock necessary for its operation. Prior to expiration of the lease term, appellant abandoned the premises, and respondent repossessed the ranch and remaining equipment. Appellant contended first that the lease was actually a joint venture, based on negotiations between the parties to incorporate the ranch, and requested an accounting; and second, that he was entitled to credit for the remaining equipment, which respondent had retained after repossession. The trial court entered judgment for respondent for the remainder of the lease and the difference between the contract price and market value of the equipment, and found that appellant was not entitled to an accounting. On appeal, the Business lawsuit held that respondent had the option of repossessing the goods, or reselling the goods and suing appellant for a deficiency, but that the trial court erred in allowing respondent to retain the goods and also seek deficiency. The court reversed the judgment and remanded the case to the trial court for a determination as to whether appellant was entitled to an accounting.

The court reversed the trial court's judgment in favor of respondent lessor and reversed the trial court's grant of prejudgment interest to respondent, holding that the trial court erred in not making findings as to the existence of a joint venture between the parties or appellant lessee's performance under any agreement. Therefore, the court could not determine whether appellant was entitled to an accounting. The case was remanded.

Petitioners insurance underwriters sought a writ to overturn the order of the Superior Court for the County of Los Angeles, California which denied, in part, petitioners' motion for summary adjudication.

This litigation arose from administrative environmental proceedings commenced by the California Regional Water Quality Control Board, who issued a Cleanup and Abatement Order against real party in interest refinery company, requiring it to detect and assess conditions of soil and groundwater contamination. Real party interest sought indemnification for the costs incurred to comply with the order from petitioners, insurance underwriters, with whom it had a liability insurance policy. Petitioners sought a declaratory judgment with respect to the indemnification issue. The court held that petitioners were not obligated to indemnify the real party in interest. The court reasoned that an insurer's duty to defend and indemnify would be triggered by a suit against the insured, and in the absence of a lawsuit, no duty existed. Since no suit was brought against the insured, the insurers had no duty to defend or indemnify.

Writ granted; since no suit was brought against the real party in interest, respondents had no duty to indemnify the real party in interest for costs incurred to comply with orders issued during administrative environmental proceedings.

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