Business and corporate lawyer

Appellant architects and engineers challenged the review by the Court of Appeals for the First Appellate District (California), which affirmed the order of the trial court granting a declaratory judgment in favor of respondent insurer in appellants' lawsuit seeking indemnification under an errors and omissions indemnity insurance. Appellants claimed that respondents were required to pay costs incurred defending claims.

Appellant architects and engineers filed a lawsuit against respondent insurer seeking a judicial determination of rights and duties under an errors and omissions indemnity insurance policy issued to them by respondent. Declaratory judgment was entered in favor of respondent and appellants sought review. The court found that the pertinent provisions of the policy were not ambiguous, and that the provisions were to be interpreted according to the intention expressed by the words of the policy as interpreted by Cal. Civ. Code § 2778(2). The Business and corporate lawyer found that the policy provided indemnification against loss and not liability, that respondents permitted appellants to continue to use their own attorney at their own expense, that respondents were not required to provide a defense, and that respondents were required to indemnify appellants once there was a loss. The court affirmed the declaratory judgment of the trial court that respondents were not obligated to indemnify appellants until appellants incurred a loss.

Judgment of the trial court was affirmed because the trial court properly interpreted the policy terms and applied the correct principles of interpretation to determine that respondent insurer was not required to provide a defense to claims made against appellant architects and engineers but was required to indemnify them once a loss was incurred.

Appellants, the transferees of a liquor license, sought review of a judgment of the Superior Court of Alameda County (California) in favor of respondent creditor in its action for declaratory and equitable relief and to quiet title to the license. The transferees contended that the trial court under Cal. Bus. & Prof. Code § 24076 erred in declaring the license transfer void and awarding the sales proceeds of the license to the creditor.

Prior to the transfer of the license, the licensee had granted to the creditor a power of attorney authorizing the assignment of the license in the event of a default on the repayment of a loan. On appeal, the court reversed the trial court's judgment and remanded the case. The court held that the trial court erred in enforcing the creditor's agreement with the licensee because the agreement was in substance a pledge to transfer the license as security for the loan in violation of § 7.3 of the Alcoholic Beverage Control Act, Cal. Bus. & Prof. Code § 24076. The court held that the prohibition in § 24076 was properly applied to the licensee's pledge of security even though part of the licensee's debt to the creditor predated the effective date of the statute. The court stated that § 24076 was not retroactively applied because, prior to the enactment of the statute, the creditor had an unsecured loan without any contractual right to demand the transfer of the liquor license as security. The court noted that the pledge of the license as security and the licensee's default in payment occurred after the enactment of § 24076.

The court reversed the trial court's judgment declaring the license transfer void and awarding the sales proceeds of the license to the creditor. The court remanded the case to the trial court for further proceedings.