As we highlighted in an earlier post, each party in litigation typically is responsible for their own attorneys’ fees. However, the “Tort of Another” doctrine allow for the recovery of attorney’s fees when a defendant has wrongfully caused the plaintiff to sue a third party. See Prentice v. North Am. Title Guaranty Corp., Alameda Div., 59 Cal. 2d 618, 620-21 (1963).
Under the Tort of Another doctrine, when a plaintiff is forced to protect their interests by suing or defending a suit against a third party, because of some tortious activity of the defendant, the plaintiff may be able to recover attorney’s fees incurred in litigation. Courts look to whether the defendant’s tortious actions, intentional or negligent, were the cause of the plaintiff having to sue that third party. Furthermore, when a plaintiff is alleging the defendant’s negligence caused the plaintiff to initiate a lawsuit, the plaintiff must establish that the defendant owed the plaintiff a duty of care.
Recently, a California appeals court affirmed a nonsuit ruling in favor of the insurer GEICO and its insured, holding the Tort of Another doctrine did not apply to the case. Yu v. GEICO Gen. Ins. Co., No. B270303, 2017 WL 6350526 (Cal. Ct. App. 2017). In Yu, the plaintiff’s car was damaged by another driver insured by GEICO. Yu tendered his claim to the driver’s insurer, GEICO, who accepted the claim and promised to pay for the repairs. Yu then took his car to a repair shop. GEICO paid the repair shop for the pre-repair inspection but then later called the damage to the car a total loss, refused to the pay the repair shop any more money and in fact demanded a refund of some of its initial payments. In response, the repair shop put a lien on the car, refused to release the car to Yu until storage fees were paid and also sued Yu to enforce the lien.
Here is where the Tort of Another doctrine comes into focus because Yu then sued the repair shop back (also known as a cross-complaint) alleging breach of contract and conversion. Yu also filed a cross-complaint against GEICO and the driver of the car in the underlying accident alleging that GEICO’s refusal to pay and the driver’s negligence in crashing into the plaintiff’s car caused the plaintiff to sue the repair company.
Ultimately, the trial court and court of appeal rejected plaintiff’s Tort of Another argument in favor of both the driver and GEICO.
With respect to the driver, the court said the driver’s negligence did not cause the plaintiff’s suit against the repair shop, even though the whole reason for hiring the repair shop was because of the damage to the defendant’s negligent driving. Ultimately, this act was too far removed from the repair shop’s alleged breach of contract and thus the tort of another doctrine simply could not apply.
With respect to GEICO, the court distinguished between breach of contract and breach of duty. One sounds in contract law and the other in tort law. The Tort of Another doctrine applies in relation to, you guessed it, tort causes of action and the only GEICO wrongdoing by GEICO, if any, was breach of contract by failing to pay the repair company. GEICO owed no duty toward Yu because GEICO was not his insurer. Lastly, the court noted GEICO’s promise to pay for the repairs did not create a duty towards Yu because it was acting on behalf of its insured, the negligent driver.
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