Appellant insurers sought review from a judgment of the Superior Court of Los Angeles County (California), which rendered a decision in favor of respondent insured in an action to recover amounts paid under insurance policies for damage to property caused by fire.

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Overview

The insured sold to another company a product manufactured for cleaning greasy and oily floors. It was alleged that the product was unfit and unsafe for use in cleaning greasy and oily floors in that the same was highly inflammable and consequently dangerous. The sole question presented was whether the causes of action were barred by the statute of limitations. The court held that among the rights of an insurer to recover a loss paid by it, which rights were claimed by subrogation to the rights of an insured against a third party responsible for a fire, there was included the right to the same statute of limitations period that applied to its insured. The court also held that count three, which charged that the fire and consequent damage to property was occasioned by the negligence of the insured separate and apart from any obligation arising out of the contract or from the negligent performance, thereof sounded in tort. Further, nothing inferred that the other company or its employees were guilty of contributory negligence as a matter of law.

Outcome

The court reversed the judgment for the insured, and the case was remanded.