Truck Insurance Exchange v. Federal Insurance Co.Annotate this Case
The Court of Appeal affirmed the trial court's order denying Federal's special motion to strike a civil complaint for fraud as a strategic lawsuit against public participation under Code of Civil Procedure section 425.16, as well as the trial court's order overruling its evidentiary objections. In the underlying action, plaintiffs filed lawsuits against Moldex, alleging Moldex manufactured defective air respirators and masks that failed to protect them. This litigation ensued between Truck, Federal, and First State over coverage and the extent to which Truck was obligated to reimburse Federal and First State for payments made for Moldex's defense and indemnity, plus interest. Federal argued that Truck's complaint for fraud is based on Federal's "acts in furtherance of its right to petition" and are thus protected speech pursuant to section 425.16, subdivisions (e)(1) and (e)(2).
The court affirmed the trial court's rulings on Federal's evidentiary objections and concluded that the first amended complaint is not relevant to the court's review of the anti-SLAPP motion. The court also affirmed Federal's special motion to strike Truck's complaint for fraud, concluding that Federal met its burden of showing that Truck's complaint for fraud arises from Federal's protected activity, and that the trial court correctly found that Truck met its burden to establish a probability of success on the merits of its fraud cause of action.
In this case, a factfinder considering all the circumstances could reasonably conclude that when Truck signed the July 2013 settlement agreeing to pay nearly $5 million to Federal and to dismiss its pending appeal of the February 2013 judgment, it did so in reasonable reliance on Federal's course of conduct and Federal's stated position that it had a duty to defend Moldex pursuant to its policy. Furthermore, Truck agreed to file a request for dismissal of its pending appeal, with prejudice, when it entered the settlement agreement, which further supports a finding of extrinsic fraud by Federal. Finally, Federal is mistaken in its belief that Truck "released the claim for which it now seeks damages" by signing the July 2013 settlement agreement.