Transamerica Ins. Co. v. Superior Court

In Transamerica Ins. Co. v. Superior Court (1994) 29 Cal.App.4th 1705, the court reached the same conclusion. There, an employee sued for wrongful discharge, alleging that she was terminated solely because she was a woman. In her deposition, she claimed that she suffered such stress that it caused physical injury. She also filed a workers' compensation claim. The employer tendered defense of both the civil action and compensation claim to Transamerica under a two-part policy like those here and in Culligan v. State Comp. Ins. Fund (2000). Transamerica defended the compensation claim but declined to defend the suit. Later, the employer sued Transamerica for failing to defend. The trial court granted the employer summary judgment, finding that Transamerica had a duty to defend. However, the appellate court found no duty and issued a writ of mandate that directed the trial court to vacate its order. (Id. at pp. 1708-1711, 1717.) According to the appellate court, evidence indicating that the employee may have suffered bodily injury before she was terminated came within the workers' compensation exclusion. This exclusion in Part 2, "clearly indicates that where workers' compensation liability exists, there is no coverage under the employer's liability portion of the Policy, thereby affording only defense and indemnity for the workers' compensation claim under Part 1." (Transamerica, supra, 29 Cal.App.4th at p. 1716.)