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Jeffrey Baker, Petitioner v. Workers’ Compensation Appeal Board (Meiborg, Inc. and Gallagher Bassett Services, Inc.), Respondents

2018 WL 1997103

NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.
Commonwealth Court of Pennsylvania.
Jeffrey Baker, Petitioner
v.
Workers’ Compensation Appeal Board (Meiborg, Inc. and Gallagher Bassett Services, Inc.), Respondents
No. 1176 C.D. 2017
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Submitted: January 5, 2018
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FILED: April 30, 2018
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge

OPINION NOT REPORTED
PATRICIA A. McCULLOUGH, Judge
*1 Jeffrey Baker (Claimant) petitions for review of the July 27, 2017 order of the Workers’ Compensation Appeal Board (Board), which affirmed the order of a Workers’ Compensation Judge (WCJ) denying Claimant’s claim petition and petition for penalties. We affirm.

Facts and Procedural History
Claimant began working for Meiborg, Inc. as a truck driver in February 2014. Claimant drove one of Employer’s tractor-trailers, making deliveries in New York, Pennsylvania, New Hampshire, Maine and Ohio. On April 30, 2014, Claimant took his truck home “because the fairing looked loose and he wanted to check on it.” (WCJ’s Finding of Fact (F.F.) No. 1(b).) Claimant injured his right arm and shoulder when he fell off of a ladder that he was standing on to look at the fairing. (WCJ’s F.F. Nos. 1(a)-(c); Board’s op. at 3.)

Following the injury, Claimant called Rob Lawrence, a dispatcher for Employer, to notify him of the injury but declined to go to the hospital, stating that, although his arm was sore and numb, he could drive. Employer’s corporate secretary, Zach Meiborg, subsequently called Claimant to check on him and ask whether he needed to go to the hospital. Claimant responded that he wanted to wait a couple of days to see how his shoulder “reacted.” (Board’s op. at 3.) Three days later, Claimant spoke with Mr. Meiborg again and stated that he wanted to seek medical help because his shoulder was not getting better. When Claimant related to Mr. Meiborg that he was going to the hospital, Mr. Meiborg told him to “just go in, and we’ll take care of it later.” (Id. at 4; WCJ’s F.F. Nos. 1(d), 1(f)-(g).)

The doctor who saw Claimant believed he had suffered a rotator cuff tear and gave him a prescription for an MRI. Claimant did not immediately have the MRI performed because he “wanted to hold off for a while.” (Board’s op. at 4.) Approximately two weeks later, the doctor’s office called Mr. Mieborg, who then communicated with Employer’s insurer, Gallagher Bassett, and Claimant had the MRI done. Gallagher Bassett paid Claimant’s initial medical expenses and Claimant was scheduled for surgery on July 24, 2014. (Id.; WCJ’s F.F. Nos. 1(h)-(k).)

On July 23, 2014, the day prior to his surgery, Claimant was involved in an argument with a customer and another employee and was terminated. Later that day, Gallagher Bassett informed Claimant that his claim was denied but stated that all of his medical expenses would be paid up to July 23, 2014. Claimant did not have the surgery done the following day.

In December 2014, Claimant filed a claim petition and a penalty petition,1 and the matter was submitted to a workers’ compensation judge (WCJ), who held multiple hearings.

With regard to the events of July 23, 2014, Claimant testified that he believed he was not scheduled to work that day,2 but Employer called him that morning requesting that he pick up a trailer, drop it off at its destination, and leave, since they “knew [Claimant] had appointments in the afternoon.” (Reproduced Record (R.R.) at 71a.) Claimant stated that he did so, but once he arrived at the destination, he was told that he would not be allowed to drop the trailer and that he had to stay. Claimant acknowledged getting into an argument with the dispatcher because he did not want to miss his appointment. He stated that Mr. Meiborg called him and informed him that he would be fired but needed to stay and wait for the tractor to be unloaded if he expected to be paid. Claimant did so, after which he was told to clean out his truck and return it. Claimant testified that, when Claimant returned home, Gallagher Bassett notified him that his claim would be denied but that it would pay for his medical bills up to July 23, 2014. Consequently, Claimant did not have the surgery. (WCJ’s F.F. Nos. 1(k)-(m); Board’s op. at 4-5.)

*2 On cross-examination, Claimant stated that he did not recall Employer ever informing him that he was forbidden from taking his truck home, nor did he recall whether he received Employer’s handbook after being hired. He testified that he took his truck home on multiple occasions and had sometimes washed and waxed it and that Mr. Meiborg and two others were aware that he had done so. Claimant also denied that Employer had previously given him approval on a one-time-only basis to take his truck home. (Board’s op. at 5.) Further, Claimant disagreed that Employer had a location where employees were to take the trucks for mechanical issues, and he denied ever having sustained a shoulder injury prior to the work incident in April. (Id.; WCJ’s F.F. Nos. 1(o)-(p).)

Claimant, however, did agree that he was terminated for his refusal to deliver the load and for being argumentative, that he had issues with discipline prior to July 23, 2014, and that he had had arguments with Mr. Meiborg “here or there.” (R.R. at 83a.) Claimant also acknowledged that no one witnessed the accident and that there was a place provided by Employer where the trucks were to be parked. Claimant stated that his shoulder continues to bother him and he is unable to lift more than five pounds above his head or do anything repetitive. Finally, Claimant stated that he began working for another employer in June or July, after which he started with his current employer in October 2014, where he earns more than he had with Employer. (WCJ’s F.F. Nos. 1(q)-(u); Board’s op. at 5; R.R. at 87a-88a.)

Claimant also presented the testimony of Jonathan Santos, who worked for Employer as a company employee and subsequently as an owner-operator for approximately two years. Mr. Santos testified that, while he was a company employee, he owned his vehicle and would take it home nearly every weekend. Mr. Santos stated that he told both Mr. Meiborg and another employee that he was doing so and that Employer did not object or reprimand him for it. Mr. Santos also stated that he recalled signing an employee handbook but did not know whether it stated that company trucks could not be taken home without permission. He testified that some of the other drivers also took their vehicles home, but acknowledged that he was not aware of whether they had specific permission to do so or whether employees had been fired because of it. Mr. Santos testified that he had washed his truck using a ladder but agreed that Employer had a specific company that it used to wash its trucks. (WCJ’s F.F. Nos. 2(a)-(i); Board’s op. at 5-6.)

Finally, Claimant produced medical evidence in the form of reports indicating he was injured on April 30, 2014, and suffered a right rotator cuff tear, more specifically defined as “full thickness supraspinatus and infraspinatus tears” for which surgery was recommended and planned. (WCJ’s F.F. No. 3.)

Employer submitted corrective action forms, demonstrating that Employer had a history of reprimanding and even terminating employees for taking trucks home without permission. Additionally, Employer presented the testimony of Mr. Meiborg, who handles the hiring, retention, and training of employees. Mr. Meiborg stated that Employer is an over-the-road trucking company that has its primary facility in Illinois, but serves customers in other states as well. Mr. Meiborg testified it is Employer’s policy that trucks are to be parked at authorized locations and that to do otherwise requires written approval. Mr. Meiborg stated that Employer does not give blanket permission for employees to take their trucks home. Mr. Meiborg noted that Claimant was given, and signed an acknowledgement that he had received, a copy of the employee handbook, which sets forth Employer’s policies, including its policy forbidding employees from taking vehicles home.3 (WCJ’s F.F. Nos. 5, 7(a)-(c); Board’s op. at 6; R.R. at 296a.)

*3 With regard to leave, Mr. Meiborg stated that Employer’s policy requires employees seeking time off to fill out an electronic, documented request on a formal sheet called a “time off request form,” which are approved by him or one other person. (Board’s op. at 6.) Mr. Meiborg indicated that Employer needs to know about requests for leave in advance for scheduling purposes. (Id.)

Mr. Meiborg further testified that Employer does not want its drivers to fix the trucks, as they are not qualified, and their doing so could result in liability for Employer. He stated that all maintenance issues are to be reported to the shop foreman, who finds a repairman in the area to fix the truck if there is an issue. Mr. Meiborg noted that the employee handbook covers the proper reporting of maintenance issues, and that Claimant was aware of the process. Additionally, Mr. Meiborg testified that Employer does not require or ask its drivers to wash the trucks as that is contracted through a third party, which all of its drivers use. (WCJ’s F.F. Nos. 7(i); Board’s op. at 6-7.)

With regard to Claimant’s injury, Mr. Meiborg stated that on May 1, 2014, he received an email notifying him that Claimant had sustained a minor injury when he fell off a ladder while washing his truck and was “okay to continue with his load.” (R.R. at 303a.) The following day, Mr. Meiborg stated that he personally spoke with Claimant, who stated that he was on a ladder cleaning his truck when he was injured. Mr. Meiborg acknowledged that he was aware that Claimant had testified otherwise. Specifically, he knew that Claimant testified that he was fixing the fairing when he was injured. Mr. Meiborg explained that he initially reported the incident to its workers’ compensation insurance carrier because Claimant implied that it was a workers’ compensation injury and he assumed that Claimant was on duty when it occurred. Later, Mr. Meiborg stated that he became aware that Claimant was off duty and at home while working on the truck, against company policy, when the injury occurred. Mr. Meiborg testified that he did not discipline Claimant and acknowledged this was probably an oversight; however, he stated that he spoke with Claimant and expressed his disappointment that Claimant had taken the truck home against company policy. (WCJ’s F.F. Nos. 7(f)-(h), (k); Board’s op. at 7.)

As to the events leading up to Claimant’s termination, Mr. Meiborg testified that Claimant advised that his surgery was scheduled for July 24 and requested that day off. However, Mr. Meiborg stated that Claimant did not request off on July 23 and was asked to deliver “a short load” to one of Employer’s customers. (Board’s op. at 7.) Mr. Meiborg stated that when Claimant arrived, the customer decided that “it was not going to be a drop and hook trailer, [and instead] wanted to live unload it.” (R.R. at 308a.) As a result, Mr. Meiborg stated that Claimant “became irate with the customer [and, w]hen we called him to try to calm him down, he became irate with dispatch.” (Id.) Mr. Meiborg indicated that this was at least the third incident of the kind in which Claimant had “agitated a customer, as well as the dispatchers.” (R.R. at 309a.) As a result, Mr. Meiborg terminated Claimant. (WCJ’s F.F. Nos. 7(l)-(m); Board’s op. at 7-8.)

Employer also presented the testimony of its driver manager, Sean Van Dusen, who had worked in trucking for nearly 20 years. Mr. Van Dusen testified that there is no need to use a ladder when inspecting or washing a truck and confirmed that Employer had a policy requiring both written and verbal permission to take a truck home. Additionally, he testified that Employer’s policy is to have the driver notify the shop if there are mechanical issues with the trucks, and noted that Employer’s handbook contained a phone number for maintenance, as well as an after-hours emergency number. Mr. Van Dusen stated that, within fifteen minutes of reporting a maintenance issue, the driver is contacted and told where the vehicle should be taken for repairs. Finally, Mr. Van Dusen stated that he would never do maintenance on his own truck, acknowledged he had taken his truck home on occasion with specific approval, and confirmed that Employer had a relationship with a company for truck washing. (WCJ’s F.F. Nos. 8(a)-(e); Board’s op. at 8.)

*4 Employer presented the testimony of Anthony Hilegass, who formerly worked for Employer as a driver for one year and seven months. Mr. Hilegass testified that when he was hired, he received an employee handbook, which set forth Employer’s policy that drivers could not take trucks home without permission. He stated that he had twice gotten permission to take his truck home by calling and asking. He also acknowledged that he had done so without permission and had been verbally reprimanded as a result. Mr. Hilegass testified that, during his 20-year career, he had washed trucks but stated he had never used a ladder to do so and had never used a ladder to climb onto a truck because “it’s just not safe.” (R.R. at 266a.) He likewise confirmed that he was aware that Employer had a contract with a company for washing its trucks. When asked about performing maintenance on his truck, Mr. Hilegass stated that he had installed a lightbulb, but had done so with permission and from a position standing on the ground. Additionally, he stated that it was Employer’s procedure for maintenance issues to have drivers call in to report them, at which point they would receive instructions. Finally, Mr. Hilegass stated that Employer’s policy with regard to leave required the employee to ask for and receive permission to take off ahead of time. (WCJ’s F.F. Nos. 9(a)-(f); Board’s op. at 8-9; R.R. at 269a.)

Employer also presented the testimony of Michael Hilgart, who has worked as a dispatcher for Employer for seven years. Mr. Hilgart testified that Employer has a policy that requires drivers to have written permission to take a truck home; however, he indicated that some drivers have blanket permission to do so because “they are in more of a supervisory role.” (Board’s op. at 9.) Mr. Hilgart also stated that drivers are permitted to take trucks home in cases of emergencies on Sunday nights so that there is not a service failure to customers on Monday mornings. With regard to Claimant, Mr. Hilgart stated that Claimant had requested specific permission to take his truck home, but did not have blanket permission to do so. (WCJ’s F.F. Nos. 10(a)-(b); Board’s op. at 9.)

Mr. Hilgart also testified that written permission is required for employees to take vacation and that, while Claimant had emailed to request leave in the past, Mr. Hilgart saw no record of Claimant having requested leave on the day before his surgery. As to the events on the day of Claimant’s termination, Mr. Hilgart testified that Claimant became “very angry” with the customer because the process was taking too long, at which point Mr. Hilgart handed the matter over to Mr. Meiborg. (R.R. at 257a.) Mr. Hilgart noted that Claimant had had other issues with customers where he had not acted professionally. Finally, as to Claimant’s injury, Mr. Hilgart testified that Claimant initially reported the injury to him, advising that it occurred while he was washing his truck. (WCJ’s F.F. Nos. 10(c)-(d); Board’s op. at 9.)

Finally, Employer presented the testimony of Thomas DiBenedetto, M.D., a board-certified orthopedic surgeon who examined Claimant in June 2015, and diagnosed him with a two tendon retractor rotator cuff tear. He noted that some of the findings could be degenerative conditions. Dr. DiBenedetto reviewed Claimant’s records, which indicated that Claimant had fallen from a ladder and injured his right shoulder but had not taken any time off of work. He noted that the medical records from his initial visits after the injury did not include any mention of a work injury and that surgery was scheduled but did not go forward. Dr. DiBenedetto also reviewed Claimant’s testimony and noted that, despite the condition of his shoulder, Claimant continued to work full duty. He explained that some people live with rotator cuff symptoms for years. Ultimately, Dr. DiBenedetto stated it was his belief that Claimant had not injured himself as a result of his work duties because the events he reported were inconsistent and vague and because he had continued driving without missing any work. Dr. DiBenedetto acknowledged that, at some point, Claimant should get his rotator cuff fixed, but opined that Claimant is capable of working full duty. (WCJ’s F.F. Nos. 4(a)-(h); Board’s op. at 9; R.R. at 392a, 436a.)

The WCJ found the testimony of Employer’s witnesses to be credible, noting that they were generally consistent and often supported by documentation. Conversely, the WCJ found that Claimant’s testimony was not entirely credible and rejected it to the extent that it contradicted the testimony of Employer’s witnesses. Further, the WCJ found that medical evidence demonstrated that Claimant incurred a right rotator cuff tear and that further treatment was necessary. However, the WCJ stated that, even if Claimant’s testimony were credible, his injury would not constitute a work injury because truck washing, truck maintenance, and taking the truck home were not within the scope of his employment. Thus, the WCJ denied the claim petition and penalty petition. (WCJ’s F.F. Nos. 11-15.)

*5 Claimant appealed to the Board, but the Board affirmed. Claimant now petitions for review with this Court.4

Discussion
In a workers’ compensation proceeding, the WCJ is the ultimate fact finder and is the sole authority for determining the weight and credibility of evidence. Lombardo v. Workers’ Compensation Appeal Board (Topps Company, Inc.), 698 A.2d 1378, 1381 (Pa. Cmwlth. 1997). “As such, the WCJ is free to accept or reject the testimony of any witness, including medical witnesses, in whole or in part.” Id. The WCJ’s findings will not be disturbed on appeal when they are supported by substantial, competent evidence. Greenwich Collieries v. Workmen’s Compensation Appeal Board (Buck), 664 A.2d 703, 706 (Pa. Cmwlth. 1995). “Substantial evidence is such relevant evidence which a reasonable mind might accept as adequate to support a finding.” Berardelli v. Workmen’s Compensation Appeal Board (Bureau of Personnel, State Workmen’s Insurance Fund), 578 A.2d 1016, 1018 (Pa. Cmwlth. 1990).

Moreover, where both parties present evidence, it is irrelevant that the record contains evidence which supports a finding contrary to that made by the WCJ; rather, the pertinent inquiry is whether evidence exists that supports the WCJ’s findings. Hoffmaster v. Workers’ Compensation Appeal Board (Senco Products, Inc.), 721 A.2d 1152, 1155 (Pa. Cmwlth. 1998).

Additionally, on appeal, all inferences drawn from the evidence shall be taken in favor of the party prevailing before the WCJ. Krumins Roofing & Siding v. Workmen’s Compensation Appeal Board (Libby), 575 A.2d 656, 659 (Pa. Cmwlth. 1990).

a. Prompt Determination and Equitable Estoppel
Before this Court, Claimant raises three issues. In his first and second related issues, he argues that the Board erred by failing to award Claimant benefits where Employer failed to comply with the prompt-determination requirements of 77 P.S § 717.15 and 34 Pa. Code § 121.13,6 after being notified that Claimant had sustained an alleged work-related injury. Claimant argues that Employer induced him into believing that his injury was going to be treated as a workers’ compensation injury for approximately three months by failing to timely deny his claim, “only then to abruptly fire him the day before that surgery, [and] direct[ ] that the surgery be cancelled.” (Claimant’s brief at 10.) Claimant cites to Mosgo v. Workmens’ Compensation Appeal Board (Tri-Area Beverage, Inc.), 480 A.2d 1285 (Pa. Cmwlth. 1984), and Kelly v. Workmen’s Compensation Appeal Board (DePalma Roofing), 669 A.2d 1023 (Pa. Cmwlth. 1995), arguing that Employer’s voluntary payment of Claimant’s medical bills up to the date of his termination makes its challenge to liability per se unreasonable because, if Employer had denied his claim sooner, he would have still been able to use his health insurance through Employer to pay for the surgery. Thus, Claimant asserts that Employer’s “inappropriate conduct” left him without workers’ compensation benefits as well as without health insurance (due to his termination) and thus without the ability to pay for the surgery. (Claimant’s brief at 10.) Claimant requests that this Court reverse the Board on the basis of equitable estoppel arising from Employer’s alleged misconduct and remand to the WCJ for calculation of appropriate counsel fees.

*6 In response, citing Bailey v. Workers’ Compensation Appeal Board (ABEX Corp.), 717 A.2d 17 (Pa. Cmwlth. 1998), Employer notes that an employer’s voluntary payment of an employee’s medical bills is not an admission of liability. Employer also distinguishes Mosgo and Kelly, stating that those cases stand for the proposition that employers who make voluntary payments to employees while reserving the right to deny a workers’ compensation claim in the future are estopped from denying the compensability of the claim since reservation of rights is null and void under the Act.

We agree. As in Bailey, here, Employer’s payment of Claimant’s medical expenses up to July 23, 2014, did not constitute an admission of liability for an unaccepted injury. 77 A.2d at 19 (“[W]hen an employer voluntarily pays a claimant’s medical bills, it should not be considered an ‘admission’ of liability on behalf of the employer.”). As such, Claimant’s argument that Employer is estopped from contesting the work-related injury fails.

Further, in Lemansky v. Workers’ Compensation Appeal Board (Hagan Ice Cream Company), 738 A.2d 498 (Pa. Cmwlth. 1999), this Court held that a claimant was entitled to attorney’s fees where there was no dispute as to the compensability of the work-related injury and the employer “attempted to evade entering into an agreement recognizing the injury as required by § 406.1 of the Act on the basis that the claimant did not suffer a loss of earnings. 77 P.S. § 717.1.” Id. at 503.

Conversely, here, we note that Mr. Meiborg testified it did not matter to him whether Claimant’s surgery was paid for through Employer’s health insurance or workers’ compensation insurance because Employer’s premiums would increase either way and “getting [his] employees healthy and getting the freight delivered” was his main concern. (R.R. at 314a.) He stated that he reported the injury to Gallagher Bassett and left it to the company’s adjustors to investigate and determine whether it was in fact a work-related injury. (R.R. at 329a.) Mr. Meiborg testified that he did not express an opinion as to whether he believed Claimant suffered a work-related injury because it would have been inappropriate for him to do so, as that decision was for the insurance company to decide after conducting an investigation. (R.R. at 328a-29a.) When asked about why there was a delay in the insurance company’s determination, Mr. Meiborg indicated that he did not know but believed that it had to do with turnover of employees at the insurance company. (R.R. at 329a.)

Here, Employer did not make voluntary payments to Claimant with the intent to compensate him in lieu of accepting his injury, nor did it purposefully evade entering into an agreement recognizing the injury as required under the Act, while acknowledging that there was a work-related injury. As such, the facts of this case are distinguishable from Mosgo, Kelly, and Lemansky, and Employer was not estopped from contesting Claimant’s claim. Further, Employer demonstrated that its contest was reasonable given that Claimant was in violation of at least two of Employer’s policies: (1) taking the vehicle home, and (2) washing or performing maintenance on the vehicle. Accordingly, Claimant is not entitled to attorney’s fees.7

b. Spoliation of Evidence
*7 In his final issue, Claimant argues that the Board erred in refusing to overturn the WCJ for disregarding the issue of Employer’s willful destruction of material evidence. Specifically, Claimant states that Employer was put on notice of Claimant’s intent to file a claim petition five days after his termination. Claimant asserts that, despite this knowledge, Employer destroyed driver log books of Claimant and others, which would have conclusively demonstrated the extent to which Claimant and other employees were routinely permitted to take vehicles home. Claimant contends that the driver logs were relevant since the WCJ denied the claim petition “on the theory that drivers were supposedly forbidden from—and never did, without being sanctioned—taking vehicles home.” (Claimant’s brief at 33.)

In response, Employer argues that the driver logs were not relevant, and even if they were, they were not destroyed by Employer in bad faith. Specifically, Employer states that the WCJ did not need to address the issue of the driver logs during the time that Claimant worked for Employer because WCJ did not require them in order to determine that taking the truck home when Claimant was neither a supervisor, nor the owner of the truck, was not within the scope of his employment.

Employer also argues that the log books were only reviewed to determine driver compliance with federal Department of Transportation records, and that Mr. Meiborg’s testimony demonstrated that it was Employer’s policy to only keep the records for six months, after which they were automatically destroyed. Thus, Employer asserts that if driver logs were missing at the time of litigation, it was solely because of Employer’s general policy of destroying them and not as a result of the bad faith of Employer.

When determining the proper penalty for the alteration or destruction of evidence, relevant factors for the court to consider include: “(1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party, and (3) the availability of a lesser sanction that will protect the opposing party’s rights and deter future similar conduct.” Schroeder v. Department of Transportation, 710 A.2d 23, 27 (Pa. 1998).

In this case, it does not appear the destruction of the log books was done in bad faith. During his testimony, Mr. Meiborg emphasized that he was not experienced with the workers’ compensation matters, was “new to the PA trucking market, [ ] absolutely new to the work comp. market, and [was] just unaware of how things are done.” (R.R. 327a.) Additionally, as Employer notes, Mr. Meiborg stated that Employer had a policy for destruction of physical log books, which was followed with regard to the records here, where an employee in the log audit department would handle the weekly shredding and discarding the log books older than six months. (R.R. at 322a.) As to electronic log books, which Employer began using in some vehicles in 2014, Mr. Meiborg stated that they were “just automatically disposed of through our vendor.” (R.R. at 323a-24a.) Thus, Employer followed its usual policy regarding destruction of books here. Critically, Employer did not selectively destroy specific logs, nor did it destroy the books before the six month point. As such, we conclude that their destruction was done in accordance with a bona fide company policy and there is no evidence to suggest that Employer destroyed the records in bad faith or with the intent of discarding inculpatory evidence.

Additionally, we fail to see how Claimant was prejudiced, as Claimant was able to present other evidence in support of his argument that drivers who took their trucks home would have documented it in the log books, which Employer had the opportunity to review. Specifically, Claimant testified to his belief that he was able to take his truck home at will and that Employer was aware that he did so. (R.R. at 77a-79a.) Claimant also presented the testimony of Mr. Santos, who also testified that he frequently took his truck home and documented it in his log book. (R.R. at 273a-74a.) Further, two of Employer’s witnesses, Mr. Hilegass and Mr. Van Dusen, testified that, if and when they took their trucks home, they would indicate it in their log books, which were submitted to Employer for review. (R.R. at 268a, 287a-88a.) Thus, presentation of the log books would have been duplicative of the testimony of the numerous witnesses.

*8 Moreover, Mr. Meiborg, whose testimony the WCJ found to be credible, stated that in 2014, he had one employee, Mike Morris, who reviewed the drivers’ log books to ensure that the drivers were compliant with federal Department of Transportation regulations and to confirm that the tolls and fuel the drivers reported confirmed that the drivers “were where they said they were supposed to be at that time.” (R.R. at 324a.) Mr. Meiborg acknowledged that if a driver had taken a vehicle home and reported it on the log, it would have been noticeable to anyone looking at the log; however, he testified that Mr. Morris would not have been checking the log books to determine whether employees had taken their trucks home, as Mr. Morris was not privy to information regarding whether drivers were permitted to do so. (Id.)

Notwithstanding Mr. Meiborg’s acknowledgement that Employer had the opportunity to review the log books but did not direct the employee who did so to review whether drivers were abiding by its policies, the WCJ still found that Employer had a policy against drivers taking their vehicles home. As such, Claimant’s attempt to show that employees who took their trucks home, including those who did so frequently in violation of Employer’s policy, documented it in the log books that Employer had the ability to review, was not hindered by his inability to present the physical books.

Furthermore, even if Claimant had been able to use the log books to prove that Employer did not have, or did not enforce, a policy regarding taking vehicles home, Claimant’s argument nonetheless fails because that evidence would not have addressed or disputed the WCJ’s findings that Claimant was otherwise outside the scope of his employment when he was injured because he was violating one of Employer’s two other policies against allowing drivers to wash or perform maintenance on their trucks. As such, Claimant’s argument regarding the spoliation of evidence fails. See Nevin Trucking v. Workmen’s Compensation Appeal Board (Murdock), 667 A.2d 262, 268 (Pa. Cmwlth. 1995) (holding that a truck driver who was injured while changing a tire in direct violation of a positive order was not within the scope of his employment).

Conclusion
In conclusion, Claimant’s argument that Employer was estopped from contesting the claim petition fails because Employer’s payment of Claimant’s medical bills did not constitute an admission of liability for an unaccepted injury. Further, Claimant is not entitled to attorney’s fees since Employer’s contest was reasonable as Claimant was outside the scope of his employment when injured. Finally, we do not agree that Employer’s destruction of the log books was done in bad faith or that Claimant was prejudiced as a result.

Accordingly, we affirm the order of the Board.

ORDER
AND NOW, this 30th day of April, 2018, the July 27, 2017 order of the Board is hereby affirmed.

Senior Judge Colins dissents.
All Citations
Not Reported in A.3d, 2018 WL 1997103

Footnotes

1
Claimant submitted a petition seeking reinstatement of benefits as well as penalties; however, the WCJ clarified that Claimant was in fact seeking workers’ compensation benefits and therefore would treat his petition as a claim petition.

2
During his testimony, Claimant acknowledged that he did not fill out a written vacation request because he was not “taking a vacation day,” but was simply under the impression that he was not scheduled to deliver a load that day. (R.R. at 80a.)

3
Mr. Meiborg stated that the policy was different for owner/operators since they owned their trucks. (R.R. at 322a.)

4
Our scope of review is limited to determining whether findings of fact are supported by substantial evidence, whether an error of law has been committed, or whether constitutional rights have been violated. Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704; Meadow Lakes Apartments v. Workers’ Compensation Appeal Board (Spencer), 894 A.2d 214, 216 n.3 (Pa. Cmwlth. 2006).

5
Section 406.1 of the Workers’ Compensation Act (Act), added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S. § 717.1, requires prompt payment of compensation or further notice of the decision within 21 days after the employer becomes aware of the injury.

6
This regulation states:
If compensation is controverted, a Notice of Workers’ Compensation Denial, Form LIBC-496, shall be sent to the employee or dependent and filed with the Bureau, fully stating the grounds upon which the right to compensation is controverted, within 21 days after notice or knowledge to the employer of the employee’s disability or death.
34 Pa. Code § 121.13

7
Claimant is likewise not entitled to payment for Employer’s failure to issue a notice of denial within 21 days under section 406.1 of the Act. Section 406.1 states that the first installment of compensation is due no later than 21 days after the employer has notice or knowledge of the employee’s disability and provides for the accrual of 10% interest on “all due and unpaid compensation at the rate of [10%] per annum.” 77 P.S. § 717.1(a).
In this case, however, Claimant cannot receive interest on payments to which he is not entitled. As we noted in Brutico v. Workers’ Compensation Appeal Board (U.S. Airways, Inc.), 866 A.2d 1152 (Pa. Cmwlth. 2004), “Because there was a violation of the Act, penalties would have been awardable. However, the claim petition had to be granted as well as some ‘measure’ against which the WCJ could use to award penalties. Because Claimant’s petition was denied, no penalties [can] be awarded.” Id. at 1156 (internal citations omitted). See also Coyne v. Workers’ Compensation Appeal Board(Villanova University), 942 A.2d 939, 951 (Pa. Cmwlth. 2008) (“We are not aware of any authority permitting an award of benefits to a claimant who would not otherwise be entitled to them based upon an employer’s failure to comply with the Act.”); Palmer v. Workers’ Compensation Appeal Board (City of Philadelphia), 850 A.2d 72, 77 (Pa. Cmwlth. 2004) (“[W]e will not award penalties based upon unknown numbers ….”) (internal quotation marks omitted).

Cal. Capital Ins. Co. v. Scottsdale Indem. Ins. Co.

Cal. Capital Ins. Co. v. Scottsdale Indem. Ins. Co.
Court of Appeal of California, Fifth Appellate District
May 18, 2018, Opinion Filed
F070598

Reporter
2018 Cal. App. Unpub. LEXIS 3400 *; 2018 WL 2276815
CALIFORNIA CAPITAL INSURANCE COMPANY, Plaintiff and Appellant, v. SCOTTSDALE INDEMNITY INSURANCE COMPANY, Defendant and Appellant.
Notice: NOT TO BE PUBLISHED IN OFFICIAL REPORTS. CALIFORNIA RULES OF COURT, RULE 8.1115(a), PROHIBITS COURTS AND PARTIES FROM CITING OR RELYING ON OPINIONS NOT CERTIFIED FOR PUBLICATION OR ORDERED PUBLISHED, EXCEPT AS SPECIFIED BY RULE 8.1115(b). THIS OPINION HAS NOT BEEN CERTIFIED FOR PUBLICATION OR ORDERED PUBLISHED FOR THE PURPOSES OF RULE 8.1115.
Prior History: [*1] APPEAL from a judgment of the Superior Court of Stanislaus County, No. 673872, William A. Mayhew, Judge.

California Capital Insurance Company (California Capital) defended its insureds in a personal injury action filed against them. It rejected the personal injury plaintiff’s settlement demands. The judgment entered against the insureds far exceeded policy limits. California Capital entered into a postjudgment settlement with the claimant and made the agreed payment to satisfy the judgment against the insureds. California Capital then sued Scottsdale Indemnity Company (Scottsdale), alleging Scottsdale’s insurance policy, issued to another defendant in the underlying personal injury action, also covered California Capital’s insureds as additional insureds. California Capital sought to recover all or a portion of the amounts it paid to defend and indemnify its insureds in the underlying action.
The trial court found California Capital could not pursue the causes [*2] of action for breach of contract and breach of the covenant of good faith and fair dealing that had been assigned to it by the insureds, because the insureds sustained no damage as a result of those alleged breaches. It found Scottsdale had a duty to defend the insureds, and apportioned the costs of defense between the two insurers on a theory of equitable contribution. It also found Scottsdale had a duty to indemnify the insureds, but it denied California Capital recovery based on its finding that Scottsdale had established defenses of unclean hands and failure to mitigate damages. California Capital appeals, challenging the rejection of the assigned contractual claims, the apportionment of defense costs, and the failure to apportion indemnity costs. Scottsdale cross-appeals, challenging the finding that it had a duty to defend and indemnify California Capital’s insureds in the underlying action.
We conclude the trial court correctly determined California Capital could not pursue the assigned causes of action because the insureds suffered no actionable damages. No error has been established in the trial court’s determination that Scottsdale owed the insureds a duty to defend and indemnify [*3] them in the underlying action. The trial court did not abuse its discretion in apportioning defense costs, but it applied improper considerations in denying apportionment of the costs of indemnifying the insureds. Accordingly, we will reverse and remand for a redetermination of the proper allocation of indemnity costs between the two insurers.

FACTUAL AND PROCEDURAL BACKGROUND
On December 28, 2004, Matthew Cole, through his guardian ad litem, filed a complaint against Loretta E. Wend Family Limited Partnership, Loretta E. Wend Revocable Trust, Loretta E. Wend, Trustee (the Wend defendants), John Vink, Vink Custom Farming (the Vink defendants), Wend-Tyler Winery, Joe’s Trucking, and others (Matthew T. Cole v. John Vink, et al. (Super. Ct. Stanislaus County, 2014, No. 352861; hereafter, the Cole action). The complaint alleged that, on September 10, 2004, at 4:50 a.m., Cole was a passenger in a pickup driven by his brother, traveling westbound on Shoemake Avenue, a public highway with one lane in each direction. The Cole defendants were in the process of harvesting grapes in the vineyards alongside the road. An employee of the Vink defendants used a tractor to tow a grape gondola full of [*4] grapes onto Shoemake Avenue, where it negligently stopped in the middle of the westbound lane to unload the grapes into semi-truck trailers, which were negligently parked on the dirt shoulder beside the road. Although it was night, the trailers were parked facing the opposite direction, with no cab present and no lights being displayed to passing vehicles. The grape gondola was also unlighted or had insufficient lighting. Additionally, the tractor and grape gondola, and another tractor and grape gondola operating in the dirt vineyard, stirred up dust, which impaired visibility of the tractor and grape gondola in the roadway. The pickup in which Cole was a passenger collided with the grape gondola in the westbound lane of Shoemake Avenue, seriously injuring Cole.
The Cole pleadings alleged the Wend defendants owned the real property on which the vineyard was located, the Vink defendants owned the tractor and grape gondola, and Joe’s Trucking owned the two trailers parked by the road. Further, the Wend defendants hired Joe’s Trucking to haul the grapes, and their ranch manager directed Joe’s Trucking where to park the trailers.
The Wend defendants tendered defense of the Cole action to [*5] their insurer, California Capital. California Capital accepted the defense without a reservation of rights, under the farm owner’s policy issued to Loretta Wend (Wend). The policy provided liability coverage for the Wend defendants’ premises with policy limits of $500,000 per occurrence.
Joe’s Trucking was insured by defendant Scottsdale Indemnity Company (Scottsdale), under a trucker’s policy that covered the trailers. The Scottsdale policy provided liability limits of $1 million per accident or loss. Scottsdale assumed the defense of Joe’s Trucking; in April 2006, it settled the action on behalf of Joe’s Trucking and the owner of the trailers (which were leased to Joe’s Trucking) for $765,000.
All of the defendants in the Cole action except the Wend defendants settled with Cole prior to trial. Beginning in November 2006, Cole made a series of settlement offers to the Wend defendants, offering to settle for amounts within the California Capital policy limits. The offers were rejected. In 2007 and 2008, Wend wrote to California Capital to request that it settle the Cole action within the policy limits; she advised that, if the judgment exceeded the policy limits, she would expect California [*6] Capital to pay the entire judgment, and she asked for written confirmation that it would. In response, California Capital agreed in writing that it would hold Wend harmless from any excess judgment, with the exception of any punitive damages award.
On April 21, 2008, California Capital tendered defense and indemnity of the Wend defendants in the Cole action to Scottsdale, asserting the Wend defendants were insureds under the Scottsdale policy, based on the allegations and contentions being made in the Cole action. Scottsdale declined the tender, asserting the Wend defendants were not insureds under the policy it issued to Joe’s Trucking. In August 2008, California Capital renewed its tender, based in part on the allegations in Cole’s July 24, 2008, settlement demand letter to the Wend defendants, which California Capital provided to Scottsdale. Scottsdale again denied its policy covered the Wend defendants.
Trial proceeded against the Wend defendants. The jury found the Vink defendants, Joe’s Trucking, and the Wend defendants were negligent, and their negligence was a substantial factor in causing Cole’s injuries. It awarded Cole damages of $10,651,423.13 and apportioned them 95 percent [*7] to the Wend defendants, 4 percent to the Vink defendants, and 1 percent to Joe’s Trucking. With the addition of prejudgment interest and costs, the judgment totaled over $14 million. Cole and the Wend defendants subsequently entered into a settlement and release agreement, pursuant to which California Capital paid Cole $10.4 million to settle the matter in full. Satisfaction of judgment was entered.
The Wend defendants assigned to California Capital all their rights, interests and claims arising under the policy Scottsdale issued to Joe’s Trucking. California Capital then filed this action to recover some or all of the amount it paid in defense and indemnity of the Wend defendants in the Cole action. It alleged the Wend defendants were co-insureds under the Scottsdale policy issued to Joe’s Trucking. The complaint included direct causes of action by California Capital for equitable contribution, indemnity, and declaratory relief; it also alleged causes of action for breach of contract and breach of the covenant of good faith and fair dealing, pursuant to the assignment of the rights of the Wend defendants.
Scottsdale filed a cross-complaint alleging, among other things, that its insured, [*8] Joe’s Trucking, was also an insured under the California Capital policy, and Scottsdale was therefore entitled to recover a portion of what it paid for the defense and settlement of the claims against Joe’s Trucking in the Cole case, on a theory of equitable contribution or equitable subrogation.
The matter was tried to the court. The trial court issued its decision, finding that Scottsdale had a duty to defend and indemnify the Wend defendants in the Cole action. On the cross-complaint, it found the California Capital policy did not insure Joe’s Trucking. The trial court found that the Wend defendants suffered no damages as a result of Scottsdale’s failure to defend or indemnify them, because California Capital provided full defense and indemnification; consequently, it did not award any damages to California Capital on the assigned causes of action for breach of contract and breach of the covenant of good faith and fair dealing. On the cause of action for equitable contribution, the trial court apportioned the Wend defendants’ defense costs in proportion to the respective policy limits remaining at the time Scottsdale’s duty to defend arose, which it determined to be April 21, 2008, [*9] when California Capital first tendered defense and indemnity of the Wend defendants to Scottsdale. The trial court awarded California Capital $186,013.08 in defense costs.
After considering Scottsdale’s defenses of unclean hands and failure to mitigate damages, which were based on California Capital’s multiple refusals to settle within its policy limits prior to trial, the trial court exercised its equitable powers and found that California Capital had not paid more than its fair share of the loss, so it should remain solely liable for its settlement of the Cole action. The trial court therefore awarded nothing to California Capital as a result of Scottsdale’s failure to indemnify the Wend defendants.
California Capital appeals from the judgment. Scottsdale cross-appeals, contending its policy did not cover the Wend defendants’ liability and, if it did, the trial court erred in failing to apply Insurance Code section 11580.9, subdivision (c),1 under which Scottsdale asserts there is a conclusive presumption that, if the Wend defendants were insured by its policy, its policy coverage was excess over the coverage provided by the California Capital policy.

DISCUSSION

I. Standard of Review
When the facts are in dispute, we review the trial [*10] court’s findings of fact to determine whether they are supported by substantial evidence. (Wausau Underwriters Ins. Co. v. Unigard Security Ins. Co. (1998) 68 Cal.App.4th 1030, 1038.) When the decisive facts are not disputed, we are confronted with a question of law, which we review de novo. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799.) When the facts are not disputed, the effect or legal significance of those facts is a question of law. (In re C.M. (2017) 15 Cal.App.5th 376, 386.) We also review de novo questions of statutory interpretation, and questions of contractual interpretation (including interpretation of insurance policies), when no extrinsic evidence was offered to assist in interpretation or when the extrinsic evidence is not in conflict. (Burden v. Snowden (1992) 2 Cal.4th 556, 562; Ellis v. McKinnon Broadcasting Co. (1993) 18 Cal.App.4th 1796, 1802; Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18.)

II. Breach of Contract, Breach of the Covenant of Good Faith and Fair Dealing,2 and Equitable Subrogation
California Capital’s complaint included causes of action for breach of contract and breach of the covenant of good faith and fair dealing. It alleged that the Wend defendants expressly assigned to California Capital all of the Wend defendants’ rights under the Scottsdale insurance policy. Scottsdale allegedly breached its policy by refusing to provide its insureds, the Wend defendants, the benefits due under the policy. It also allegedly breached its obligation of good faith by a number of actions, [*11] including failing to defend and indemnify the Wend defendants when it knew they were entitled to coverage under the Scottsdale policy, withholding payments under the policy when Scottsdale knew Cole’s claim was valid, failing to properly investigate the Wend defendants’ requests for policy benefits, and failing to provide a reasonable explanation of the factual basis for denial of the Wend defendants’ claim for policy benefits. California Capital sought compensatory damages (costs of defense and indemnity in the Cole action) and attorney fees incurred in bringing this action to recover policy benefits.
A breach of contract cause of action relates to the express promises made in the insurance policy, including the promises to defend the underlying action and to provide indemnity to the extent of the policy limits. (Archdale v. American Internat. Specialty Lines Ins. Co. (2007) 154 Cal.App.4th 449, 463 (Archdale).) “A statement of a cause of action for breach of contract requires a pleading of (1) the contract, (2) plaintiff’s performance or excuse for non-performance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.” (Acoustics, Inc. v. Trepte Constr. Co. (1971) 14 Cal.App.3d 887, 913.) “A breach of contract is not actionable without damage.” (Bramalea California, Inc. v. Reliable Interiors, Inc. (2004) 119 Cal.App.4th 468, 473 (Bramalea).)
“In every contract, including policies of insurance, there is an [*12] implied covenant of good faith and fair dealing that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.” (Archdale, supra, 154 Cal.App.4th at p. 463.) The implied covenant of good faith and fair dealing imposes a duty on an insurer to accept a reasonable offer to settle a claim against its insured, even though the express terms of the policy do not impose that duty. (Ibid; Critz v. Farmers Ins. Group (1964) 230 Cal.App.2d 788, 794 (Critz), disapproved on another ground in Crisci v. Security Ins. Co. (1967) 66 Cal.2d 425, 438.) “[W]hether a liability insurer’s failure to accept a settlement offer constituted a breach of the implied covenant depends on whether that settlement offer was ‘reasonable.’ The existence of a coverage dispute, however meritorious the insurer’s position, is simply not a proper consideration in deciding whether to accept an offer to settle the claim against the insured.” (Archdale, at pp. 464-465.) The insurer’s breach of the implied obligation to accept a reasonable settlement sounds in both contract and tort. (Id. at p. 466.)
The insured’s damage claim against the insurer is assignable, although some damages potentially recoverable in a bad faith action, including damages for emotional distress and punitive damages, are not assignable. (Critz, supra, 230 Cal.App.2d at p. 794; Essex Ins. Co. v. Five Star Dye House, Inc. (2006) 38 Cal.4th 1252, 1263.) “‘The assignment merely transfers the interest of the [*13] assignor. The assignee “stands in the shoes” of the assignor, taking his rights and remedies, subject to any defenses which the obligor has against the assignor prior to notice of the assignment.'” (Johnson v. County of Fresno (2003) 111 Cal.App.4th 1087, 1096, italics omitted (Johnson).)
The trial court concluded California Capital had no cause of action for breach of contract or breach of the covenant of good faith and fair dealing, because the insureds from whom it obtained its assignment of rights sustained no damage as a result of Scottsdale’s failure to defend and indemnify them, or to settle the claim within Scottsdale’s policy limits. The Wend defendants’ defense costs and the post-judgment settlement were fully paid by California Capital. Therefore, an essential element of California Capital’s causes of action was missing. Case law supports the trial court’s conclusion.
In Bramalea, a real estate developer, Bramalea, was sued by homeowners for construction defects. (Bramalea, supra, 119 Cal.App.4th at p. 470.) Its insurer, Zurich, hired counsel to defend it and to cross-complain against its subcontractors for indemnity pursuant to provisions in their subcontracts. (Id. at pp. 470-471.) The underlying action settled, with the exception of the cross-complaint. (Id. at p. 471.) The trial court granted one subcontractor’s [*14] motion to dismiss the cross-complaint, finding Bramalea had no standing to assert the claim because Zurich, not Bramalea, had paid the defense costs. (Ibid.) The court affirmed. (Id. at p. 476.) Bramalea admitted Zurich paid for its defense and Bramalea had no out-of-pocket loss. (Id. at p. 472.) Therefore, any recovery from the subcontractors or their insurers would result in a prohibited double recovery to Bramalea. (Ibid.) A breach of contract is not actionable without damage, and Bramalea sustained no damages as a result of the subcontractor’s failure to defend and indemnify it. (Id. at p. 473.)3
In Emerald Bay Community Assn. v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078 (Emerald Bay), homeowners sued their homeowners association. The association tendered defense to both of its insurers. (Id. at p. 1083.) Federal agreed to provide a defense with a reservation of rights. Golden Eagle denied coverage, but paid a portion of the association’s defense costs. (Ibid.) Federal funded the settlement of the underlying litigation. (Id. at p. 1084.) The association sued Golden Eagle for breach of contract and breach of the covenant of good faith and fair dealing. (Ibid.) The trial court found the association had no recoverable damages and entered judgment in favor of Golden Eagle. (Id. at p. 1085.)
The court stated that, in an action for breach [*15] of contract, the plaintiff must show it has suffered damage. (Emerald Bay, supra, 130 Cal.App.4th at p. 1088.) The only damage the association alleged was the $600,000 in defense costs that were paid by Federal. (Ibid.) “Since defendant paid a portion of plaintiff’s legal expenses and Federal, which concededly had an independent obligation to defend and indemnify plaintiff in the [underlying] action, paid the balance of those expenses plus the settlement, plaintiff cannot show it suffered any contract damages.” (Id. at p. 1089.) The court added:
“‘The fact that several insurance policies may cover the same risk does not increase the insured’s right to recover for the loss, or give the insured the right to recover more than once. Rather, the insured’s right of recovery is restricted to the actual amount of the loss. Hence, where there are several policies of insurance on the same risk and the insured has recovered the full amount of its loss from one or more, but not all, of the insurance carriers, the insured has no further rights against the insurers who have not contributed to its recovery. Similarly, the liability of the remaining insurers to the insured ceases, even if they have done nothing to indemnify or defend the insured.'” (Emerald Bay, supra, 130 Cal.App.4th at p. 1090, italics [*16] added.)
The court noted the association could not pursue Federal’s rights because the complaint contained no allegation of an assignment of Federal’s rights to the association; such an allegation would not have changed the outcome, however. (Emerald Bay, supra, 130 Cal.App.4th at p. 1091.) “[T]he question arises, what claim could Federal assert against defendant? Federal was not a party to the insurance policy defendant issued to plaintiff, and generally, only a party to the contract may sue for breach of the agreement’s terms. [Citation.] Thus, Federal could not sue defendant for the latter’s failure to honor its contractual obligations to plaintiff. [Citation.] [¶] What remains is Federal’s right to seek contribution from defendant for the amount of the payment exceeding its proportionate share of the defense and indemnification costs incurred in the [underlying] action.” (Id. at p. 1092.) The association’s complaint did not allege the necessary operative facts for a claim of equitable contribution. It sought compensatory damages for breach of contract and breach of the covenant of good faith and fair dealing, not an apportionment of the defense costs and settlement paid in the underlying action. Consequently, the court upheld the finding that [*17] the association had established no compensable damages to support its breach of contract action. (Ibid.)
The court reached the same result on the cause of action for breach of the covenant of good faith and fair dealing. “[W]here one insurer fully protects the insured by providing a defense and full coverage for a claim, a second insurer’s refusal to defend generally cannot support a tort action for breach of the covenant of good faith and fair dealing because the latter’s conduct will not enhance the insured’s cost of defending itself or its exposure to liability.” (Emerald Bay, supra, 130 Cal.App.4th at p. 1093.) Further, “[s]ince a tort action for breach of the covenant of good faith and fair dealing ‘is one seeking recovery of a property right, not personal injury,’ to prevail the insured must show proof of economic loss.” (Id. at p. 1094.) The insured must show an actual, not a potential, loss. (Id. at p. 1096.) Because the insurers fully protected the association from the loss, the association failed to show it suffered any cognizable loss, in either contract or tort. (Ibid.)
Here, California Capital had no direct cause of action for breach of contract or breach of the covenant of good faith and fair dealing against Scottsdale. California Capital was not a party to [*18] the Scottsdale insurance policy issued to Joe’s Trucking. California Capital pursued its causes of action for breach of contract and breach of the covenant of good faith and fair dealing as assignee of the Wend defendants’ claims against Scottsdale under the Scottsdale policy issued to Joe’s Trucking. It was undisputed that California Capital paid all of the costs of the Wend defendants’ defense and satisfied the judgment against them through a postjudgment settlement. Consequently, because their causes of action for breach of contract and breach of the covenant of good faith and fair dealing lacked the essential element of damages, the Wend defendants had no viable claim under those theories to assign to California Capital.
California Capital argues that this conclusion is wrong, because “[t]he Wends themselves were not suing Scottsdale for breach of contract. Instead, the Wends assigned their breach-of-contract claim to California Capital, who sustained the damages caused by Scottsdale’s breaches of its contract.” As discussed above, however, the assignee of a claim stands in the shoes of the assignor; it holds no greater rights than the assignor would have held in the absence of the assignment. [*19] (Johnson, supra, 111 Cal.App.4th at p. 1096.) Thus, because the Wend defendants lacked an essential element (damages) of the cause of action they attempted to assign, California Capital also lacked that element in the assigned causes of action.
California Capital attempts to distinguish Emerald Bay on the ground the plaintiff there, who attempted to recover damages for breach of contract, was the insured, not the insurer who paid the defense and indemnity costs. But California Capital misses the point of the Emerald Bay decision: the insured who did not pay the costs of defense and indemnity had no damages to claim against the insurer who failed to participate in the insured’s defense and indemnity. Likewise, the Wend defendants, who did not pay the costs of defense and indemnity in the Cole action, had no damages to claim against Scottsdale, the nonparticipating insurer. Consequently, the Wend defendants had no viable breach of contract or breach of the covenant claim against Scottsdale to assign to California Capital. As assignee, California Capital held no greater rights than its assignor.
California Capital also argues it was entitled to recover from Scottsdale based on equitable subrogation, which it asserts is the same [*20] as an assignment. As Scottsdale points out, the complaint in this action did not expressly allege a cause of action for equitable subrogation. It did, however, allege a cause of action labeled “indemnity,” in which it sought recovery of all “costs and expenses of investigating and defending the Cole lawsuit, . . . or, alternatively, apportionment based on relative culpability or other equitable considerations.” Even if we were to interpret the complaint to include a claim for equitable subrogation, it would not support reversal of the judgment.
“‘As now applied [the doctrine of equitable subrogation] is broad enough to include every instance in which one person, not acting as a mere volunteer or intruder, pays a debt for which another is primarily liable, and which in equity and good conscience should have been discharged by the latter.'”(Caito v. United California Bank (1978) 20 Cal.3d 694, 704.) “In the case of insurance, subrogation takes the form of an insurer’s right to be put in the position of the insured in order to pursue recovery from third parties legally responsible to the insured for a loss which the insurer has both insured and paid.” (Fireman’s Fund Ins. Co. v. Maryland Casualty Co. (1998) 65 Cal.App.4th 1279, 1291-1292 (Fireman’s Fund).)
“The essential elements of an insurer’s cause of action for equitable subrogation [*21] are as follows: (a) the insured suffered a loss for which the defendant is liable, either as the wrongdoer whose act or omission caused the loss or because the defendant is legally responsible to the insured for the loss caused by the wrongdoer; (b) the claimed loss was one for which the insurer was not primarily liable; (c) the insurer has compensated the insured in whole or in part for the same loss for which the defendant is primarily liable; (d) the insurer has paid the claim of its insured to protect its own interest and not as a volunteer; (e) the insured has an existing, assignable cause of action against the defendant which the insured could have asserted for its own benefit had it not been compensated for its loss by the insurer; (f) the insurer has suffered damages caused by the act or omission upon which the liability of the defendant depends; (g) justice requires that the loss be entirely shifted from the insurer to the defendant, whose equitable position is inferior to that of the insurer; and (h) the insurer’s damages are in a liquidated sum, generally the amount paid to the insured.” (Fireman’s Fund, supra, 65 Cal.App.4th at p. 1292.)
The trial court found there was one loss, to which both parties’ insurance policies [*22] applied as primary insurance. It concluded “equitable subrogation and superior equities do not apply.” California Capital has not demonstrated any error in that finding. It has not demonstrated that “the claimed loss was one for which [California Capital] was not primarily liable” or “justice requires that the loss be entirely shifted from [California Capital] to [Scottsdale], whose equitable position is inferior to that of [California Capital].” (Fireman’s Fund, supra, 65 Cal.App.4th at p. 1292.)
In American States Ins. Co. v. National Fire Ins. Co. (2011) 202 Cal.App.4th 692 (National Fire), two insurers covered the same insureds for the same type of losses, but for different time periods. (Id. at pp. 696-697.) American States Insurance Company (ASIC) settled an action against the insureds; National did not participate. ASIC then sued National, alleging some of the damages on which the settlement was based occurred during National’s policy period. (Ibid.) It attempted to allege a cause of action for equitable subrogation, based on a written assignment from the insureds of their rights against National. (Id. at pp. 697-698.) The trial court sustained National’s demurrer without leave to amend, finding ASIC could not allege the elements of a subrogation claim and the statute of limitations had run on any claim for equitable contribution. (Id. at p. 698 [*23] .) The reviewing court affirmed.
The court explained the difference between equitable subrogation and equitable contribution.
“‘Subrogation is defined as the substitution of another person in place of the creditor or claimant to whose rights he or she succeeds in relation to the debt or claim. By undertaking to indemnify or pay the principal debtor’s obligation to the creditor or claimant, the “subrogee” is equitably subrogated to the claimant (or “subrogor”), and succeeds to the subrogor’s rights against the obligor. [Citation.] In the case of insurance, subrogation takes the form of an insurer’s right to be put in the position of the insured in order to pursue recovery from third parties legally responsible to the insured for a loss which the insurer has both insured and paid. [Citations.]’ [Citation.] [¶] . . . ‘The right of subrogation is purely derivative. An insurer entitled to subrogation is in the same position as an assignee of the insured’s claim, and succeeds only to the rights of the insured. The subrogated insurer is said to “‘stand in the shoes'” of its insured, because it has no greater rights than the insured and is subject to the same defenses assertable against the insured. [*24] Thus, an insurer cannot acquire by subrogation anything to which the insured has no rights, and may claim no rights which the insured does not have. [Citations.]’ [Citation.]
“In contrast to equitable subrogation, which essentially operates as an assignment by operation of law, . . . ‘Equitable contribution . . . is the right to recover, not from the party primarily liable for the loss, but from a co-obligor who shares such liability with the party seeking contribution. In the insurance context, the right to contribution arises when several insurers are obligated to indemnify or defend the same loss or claim, and one insurer has paid more than its share of the loss or defended the action without any participation by the others.'” (National Fire, supra, 202 Cal.App.4th at p. 701.)
The court concluded ASIC had not pled, and could not plead, the essential elements of an equitable subrogation claim. (National Fire, supra, 202 Cal.App.4th at p. 702.) It could not allege it paid losses for which it was not primarily liable, and for which National was primarily liable. (Id. at p. 703.) “In cases involving progressive damages spanning several policy periods, each insurer is ‘responsible for the full extent of the insured’s liability (up to the policy limits), not just for the part of the damage that [*25] occurred during the policy period.'” (Id. at p. 703, italics omitted.) Thus, ASIC was primarily liable for the amounts paid, even if National was also primarily liable for those amounts. The court concluded ASIC was entitled to seek contribution from National, but not equitable subrogation. (Ibid.)
The court also concluded ASIC had no cause of action against National based on the assignment from the insureds of their claims. It noted that a subrogation claim is derivative and the “‘insurer cannot acquire by subrogation anything to which the insured has no rights.'” (National Fire, supra, 202 Cal.App.4th at p. 704.) When multiple insurance policies cover the same loss, the insured may recover only once; when the insured has recovered the full amount of its loss from one insurer, it has no further rights against the noncontributing insurers. Consequently, once the insureds were fully defended and indemnified by ASIC, they had no remaining claim for damages against National, the nonparticipating insurer, and no claim to assign. (Id. at p. 704.)
Similarly, here, the trial court found multiple insurance policies covered the Wend defendants for the same loss. California Capital did not dispute that its policy provided coverage to the Wend defendants in the Cole [*26] action. It has not demonstrated that it was not primarily liable for the defense and indemnification of the Wend defendants, or that only Scottsdale was primarily liable. As in National Fire, the trial court here found both insurers provided primary coverage of the loss. Consequently, neither equitable subrogation nor assignment of the insureds’ contract claims against Scottsdale supports California Capital’s claim for reimbursement of the amounts it expended for defense and indemnification in the Cole action.
The cases on which California Capital relies are distinguishable. In Interstate Fire & Casualty Ins. Co. v. Cleveland Wrecking Co. (2010) 182 Cal.App.4th 23 (Interstate), the dispute was not between two insurers who insured the same loss. It was between the insurer, who defended and indemnified the general contractor on a construction project in a personal injury action arising out of the construction, and the subcontractor, whose agreement with the contractor required it both to indemnify the contractor for any loss caused by the subcontractor’s fault and to obtain liability insurance including the contractor as an additional insured. The insurer sought equitable subrogation based on the subcontractor’s express contractual indemnity provision. (Id. at p. 31.)
The subcontractor’s [*27] demurrer was sustained on the ground the insurer lacked the superior equities required for subrogation. (Interstate, supra, 182 Cal.App.4th at p. 31.) The complaint, however, alleged the subcontractor was solely responsible for the costs of defense and indemnity in the third party lawsuit. (Id. at pp. 35-36.) Additionally, the complaint alleged the subcontractor caused the loss, through its negligence toward the injured third party. (Id. at p. 39.) Further, the subcontractor contractually agreed to indemnify the contractor. “An entity which, like [the subcontractor], agrees to indemnify the other party to the underlying transaction has a liability of greater primacy than an independent insurer that insures against loss. [Citations.] The parties directly involved in the transaction are better able to evaluate and control the risk. Therefore, for purposes of weighing the equities in an equitable subrogation case . . ., the Agreement between the parties who were connected to the incident giving rise to the loss . . . creates the greater equitable responsibility for indemnification, as compared to that of the general liability insurer.” (Id. at p. 44, italics & fn. omitted.) The court reversed the judgment, finding the complaint alleged all elements of equitable subrogation, [*28] including the plaintiff’s superior equities. (Id. at pp. 47, 49.)
Valley Crest Landscape Development, Inc. v. Mission Pools of Escondido, Inc. (2015) 238 Cal.App.4th 468 (Valley Crest) is similar to Interstate. National insured Valley Crest, the general contractor responsible for construction of the swimming pool in which a third party was injured. (Valley Crest, at pp. 473-474.) Mission was the subcontractor that constructed the pool. (Id. at p. 473.) The subcontract required Mission to indemnify Valley Crest for all claims arising out of Mission’s work and to maintain liability insurance against such losses. (Id. at pp. 474, 489.) National defended Valley Crest and paid the settlement amount on its behalf in the third party’s personal injury action. (Id. at p. 476.) National successfully sued Mission, based on a claim National was equitably subrogated to Valley Crest’s claims against Mission. (Id. at p. 473.) The trial court found National was subrogated to Valley Crest’s rights under the express indemnity provision of the subcontract. (Id. at p. 482.) In reviewing the trial court’s balancing of the equities, the court discussed Interstate at length, and analyzed the same factors it had considered. (Valley Crest, at pp. 484-490.) The court concluded that, because Mission failed to comply with its obligations under the subcontract—it failed to accept Valley Crest’s tender of defense and to maintain liability insurance to cover [*29] the loss—the trial court did not abuse its discretion in finding the equities favored National. (Id. at p. 489.)
In this case, there was no subcontractor with an express contractual indemnity provision in its subcontract. The parties are both insurers, who provided liability insurance for the Wend defendants as participants in the activity that caused Cole’s injury. Neither insurer participated in that activity or caused the loss (i.e., the injury to Cole). Neither was a participant who specifically agreed to indemnify another participant for injuries arising out of the activity. Both insurers simply provided liability insurance policies that covered the Wend defendants for the activities involved. Consequently, we are faced with the situation that was addressed in National Fire, not the situation presented in Interstate or Valley Crest. Neither insurer was in a position superior to the other for purposes of equitable subrogation.
The trial court correctly determined California Capital did not have an actionable assigned claim for breach of contract or breach of the covenant of good faith and fair dealing. To the extent a claim of equitable subrogation was encompassed within the complaint, the trial [*30] court did not abuse its discretion by denying California Capital recovery on that claim.

III. Equitable Contribution
“[W]here two or more insurers independently provide primary insurance on the same risk for which they are both liable for any loss to the same insured, the insurance carrier who pays the loss or defends a lawsuit against the insured is entitled to equitable contribution from the other insurer or insurers, without regard to principles of equitable subrogation.” (Fireman’s Fund, supra, 65 Cal.App.4th at p. 1289.) “Where multiple insurance carriers insure the same insured and cover the same risk, each insurer has independent standing to assert a cause of action against its coinsurers for equitable contribution when it has undertaken the defense or indemnification of the common insured. Equitable contribution permits reimbursement to the insurer that paid on the loss for the excess it paid over its proportionate share of the obligation, on the theory that the debt it paid was equally and concurrently owed by the other insurers and should be shared by them pro rata in proportion to their respective coverage of the risk. The purpose of this rule of equity is to accomplish substantial justice by equalizing the common burden shared [*31] by coinsurers, and to prevent one insurer from profiting at the expense of others.” (Id. at p. 1293.)
To establish a claim for equitable contribution, there must be two insurers that provide primary insurance to the same insured for the same loss. It is undisputed California Capital issued a policy of liability insurance to the Wend defendants that required it to defend and indemnify them in the Cole action. The question here is whether the Scottsdale policy also provided primary liability insurance to the Wend defendants for the same loss. We consider separately whether the Scottsdale policy afforded the Wend defendants coverage for the defense of the Cole action and whether it obligated Scottsdale to indemnify the Wend defendants for sums paid to satisfy the judgment.

A. Duty to Defend

1. Determining duty to defend
“The duty to defend is broader than the duty to indemnify.” (Hartford Casualty Ins. Co. v. Swift Distribution, Inc. (2014) 59 Cal.4th 277, 287 (Swift).) “An insurer must defend its insured against claims that create a potential for indemnity under the policy.” (Scottsdale Ins. Co. v. MV Transportation (2005) 36 Cal.4th 643, 654 (MV Transportation).) “Determination of the duty to defend depends, in the first instance, on a comparison between the allegations of the complaint and the terms of the policy. [Citation.] But the duty also [*32] exists where extrinsic facts known to the insurer suggest that the claim may be covered.” (Ibid.) “This includes all facts, both disputed and undisputed, that the insurer knows or ‘”becomes aware of”‘ from any source [citation], ‘if not “at the inception of the third party lawsuit,” then “at the time of tender.”‘” (Swift, at p. 287.)
“‘Unlike the obligation to indemnify, which is only determined when the insured’s underlying liability is established, the duty to defend must be assessed at the very outset of a case. An insurer may have a duty to defend even when it ultimately has no obligation to indemnify, either because no damages are awarded in the underlying action against the insured, or because the actual judgment is for damages not covered under the policy.'” (Swift, supra, 59 Cal.App.4th at p. 287.) Additionally, “where the information available at the time of tender shows no coverage, but information available later shows otherwise, a duty to defend may then arise.” (American States Ins. Co. v. Progressive Casualty Ins. Co. (2009) 180 Cal.App.4th 18, 26 (American States).)

2. Trial court’s findings and conclusions
The basic insuring provision in the Scottsdale policy that was issued to Joe’s Trucking stated:
“We will pay all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ [*33] to which this insurance applies, caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto.'”
The trial court noted there were two provisions of the Scottsdale policy that allegedly gave rise to potential coverage for the Wend defendant’s defense and indemnity in the Cole action. The permissive use clause defined “insured” to include:
“(b) Anyone else while using with your permission a covered ‘auto’ you own, hire or borrow except [¶] . . . [¶]
“(4) Anyone other than your ’employees’ . . . a lessee or borrower or any of their ’employees,’ while moving property to or from a covered ‘auto.'”
The definition of “insured” also included the provision referred to as the omnibus clause:
“(e) Anyone liable for the conduct of an ‘insured’ described above but only to the extent of that liability.”
The trial court analyzed the allegations of the original and first amended complaints in the Cole action. It concluded the pleadings alone, without extrinsic evidence, did not trigger a potential for liability of the Wends within the Scottsdale policy coverage, so they did not give rise to a duty to defend.
The trial court then discussed extrinsic matters known to Scottsdale [*34] about the Cole action at the time of tender, “through the discovery process and the tender letters.” It found that “the pleadings, tender letters and discovery known as of the time of the April 21, 2008 tender letter triggered a duty to defend due to the potential for actual coverage.” Cole’s July 24, 2008, policy limits demand letter to California Capital, which coverage counsel for California Capital provided to Scottsdale’s coverage counsel, “set[] forth a theory of liability based upon the special risk doctrine and made it clear [Cole] would pursue such theory against the Wends seeking a finding based upon vicarious liability.” The trial court concluded Scottsdale had a duty to defend the Wend defendants effective April 21, 2008. It awarded California Capital a percentage of the defense costs it incurred beginning on that date.

3. California Capital’s contentions
California Capital contends the trial court should have required Scottsdale to pay a portion of the defense costs incurred beginning in June 2005, when Scottsdale received notice of the Cole lawsuit and undertook the defense of Joe’s Trucking. California Capital cites OneBeacon America Ins. Co. v. Fireman’s Fund Ins. Co. (2009) 175 Cal.App.4th 183 (OneBeacon) for the proposition that an insurer’s obligation [*35] to make an equitable contribution to the defense costs commences when the insurer has reasonable notice of the lawsuit, not necessarily when the lawsuit is formally tendered to the insurer for defense and indemnity.
In OneBeacon, the insureds were sued for contamination of real property they had owned for many years prior to the claimant purchasing it. (OneBeacon, supra, 175 Cal.App.4th at p. 187.) The insureds sent letters to the defendants, insurers whom they believed had provided policies covering the real property in the past, some more than twenty years earlier. (Id. at pp. 187-188.) The defendants initially had difficulty locating the policies or confusion about who was insured by them. OneBeacon undertook the insureds’ defense under a reservation of rights in 1999. The defendants accepted the defense in 2002. (Id. at p. 188.) OneBeacon sued the defendants for contribution to the defense costs it incurred from 1999 until the defendants began participating in the defense in 2002. (Ibid.)
The court stated that the duty to defend arises on tender of the defense. (OneBeacon, supra, 175 Cal.App.4th at p. 200.) It continued: “‘Tender can be either formal or constructive. [Citations.]’ [Citation.] Thus, although the duty to defend ordinarily arises after receipt of an actual tender of defense, it may [*36] arise upon receipt of ‘constructive notice’ of the contractual duty to defend.” (Ibid.) Constructive notice may be found when the insurer has “adequate notice of the potential for contribution and the opportunity for investigation and participation in the defense in the underlying litigation.” (Id. at p. 201.) One or more of the insureds had tendered defense of the action to each defendant in 1999. The court found that a diligent inquiry made at that time would have discovered the policies or documents indicating policies had been issued to the insureds. (Id. at pp. 204-206.) It concluded OneBeacon was entitled to equitable contribution from the defendants beginning in 1999. (Id. at p. 208.)
The crucial question for the trial court in this case was whether the original or first amended complaint gave constructive notice to Scottsdale of a potential for liability of the Wend defendants that fell within the coverage of the Scottsdale policy. The trial court considered whether a duty to defend arose prior to the formal tender in 2008. It addressed whether and when the facts alleged in the Cole complaints, with or without any additional extrinsic facts known to Scottsdale, gave rise to a duty of Scottsdale to defend the Wend defendants. [*37] The trial court concluded the allegations of the complaint and first amended complaint did not give rise to such a duty, but those allegations combined with additional extrinsic facts known at the time of formal tender did establish that duty.
California Capital does not challenge the sufficiency of the evidence supporting the trial court’s findings. It does not point to any allegations of the complaint or first amended complaint it contends gave rise to a duty to defend at the outset of the Cole action. Rather, it argues that, because the trial court found Scottsdale had a duty to indemnify the Wend defendants for the judgment in the Cole action, and the judgment in the Cole action was entered on the first amended complaint, that finding “conclusively establishes” that the first amended complaint presented a potential for a covered liability under the Scottsdale policy. Therefore, California Capital concludes, Scottsdale had a duty to defend when it had notice of the first amended complaint.
The duty to defend is not determined in hindsight, however. “[T]he existence of a duty to defend turns not upon the ultimate adjudication of coverage under its policy of insurance, but upon those facts [*38] known by the insurer at the inception of a third party lawsuit” (Montrose Chemical Corp v. Superior Court (1993) 6 Cal.4th 287, 295) or developed thereafter (American States, supra, 180 Cal.App.4th at p. 26). California Capital has not demonstrated that facts alleged or known prior to April 21, 2008, gave rise to a duty to defend.4 Thus, it has not demonstrated any error in the trial court’s finding that Scottsdale’s duty to defend arose on April 21, 2008.

4. Scottsdale’s contentions

a. Section 11580.9, subdivision (c)
In its cross-appeal, Scottsdale argues it had no duty to defend the Wend defendants in the Cole action because, if its policy covered the Wend defendants at all, its coverage was excess over that of the California Capital policy. It asserts that, pursuant to section 11580.9, subdivision (c), its coverage, if any, was conclusively presumed to be excess over the California Capital policy.
Section 11580.8 explains the policy underlying section 11580.9:
“The Legislature declares it to be the public policy of this state to avoid so far as possible conflicts and litigation, with resulting court congestion, between and among injured parties, insureds, and insurers concerning which, among various policies of liability insurance and the various coverages therein, are responsible as primary, excess, or sole coverage, and to what extent, under the circumstances of any given event involving [*39] death or injury to persons or property caused by the operation or use of a motor vehicle.
“The Legislature further declares it to be the public policy of this state that Section 11580.9 of the Insurance Code expresses the total public policy of this state respecting the order in which two or more of such liability insurance policies covering the same loss shall apply.” (§ 11580.8.)
Section 11580.9, subdivision (c) provides:
“Where two or more policies are applicable to the same loss arising out of the loading or unloading of a motor vehicle, and one or more of the policies is issued to the owner, tenant, or lessee of the premises on which the loading or unloading occurs, it shall be conclusively presumed that the insurance afforded by the policy covering the motor vehicle shall not be primary, notwithstanding anything to the contrary in any endorsement required by law to be placed on the policy, but shall be excess over all other valid and collectible insurance applicable to the same loss with limits up to the financial responsibility requirements specified in Section 16056 of the Vehicle Code. In that event, the two or more policies shall not be construed as providing concurrent coverage, and only the insurance afforded by the policy or policies covering the premises on which the loading or unloading [*40] occurs shall be primary and the policy or policies shall cover as an additional insured with respect to the loading or unloading operations all employees of the owner, tenant, or lessee while acting in the course and scope of their employment.” (§ 11580.9, subd. (c).)
Regarding Scottsdale’s claim its policy coverage was excess over that of California Capital pursuant to section 11580.9, subdivision (c), the trial court’s decision states: “California Insurance Code section 11580.9(c) provides that when two or more policies potentially cover the same loss arising out of loading or unloading of a motor vehicle the policy insuring the premises owner should be primary and the other policy excess. However, the court having found the exclusion of the California Capital policy for loading and unloading excludes coverage to Joe’s Trucking section 11580.9(c) does not apply.” Scottsdale contends the trial court’s statement was legally erroneous because the issue was whether the Wend defendants were covered by two policies, and the trial court’s statement addressed whether Joe’s Trucking was covered by two policies.
Scottsdale contends the trial court found that both the California Capital policy and the Scottsdale policy covered the Wend defendants for the same loss, that the accident occurred while the Wend [*41] defendants were loading the Joe’s Trucking trailers during the grape harvesting, and that the Wend defendants owned the property to the midpoint of Shoemake Avenue. From this they conclude the prerequisites to application of section 11580.9, subdivision (c) were met, giving rise to a conclusive presumption the California Capital policy’s coverage was primary and Scottsdale’s was excess. Scottsdale’s argument, however, ignores the findings the trial court made in determining the California Capital policy did not cover Joe’s Trucking’s liability in the Cole action.
In determining that the California Capital policy did not provide coverage for Joe’s Trucking, the trial court cited an exclusion it found applicable. Excluded from coverage was: “‘Bodily injury’ or ‘property damage’ arising out of: [¶] . . . [¶] (2) Maintenance, use, operation or ‘loading or unloading’ of any . . . ‘motor vehicle,’ . . . by any ‘insured’ or any other person.” The same exclusion applied to the Wend defendants’ liability for bodily injury arising out of loading or unloading of a motor vehicle “by any ‘insured’ or any other person.” Thus, the California Capital policy was not a policy “applicable to the same loss arising out of the loading [*42] or unloading of a motor vehicle.” (§ 11580.9, subd. (c).)
Scottsdale seems to assert that, because California Capital contended the Scottsdale policy covered the Wend defendants’ liability under its coverage for loading or unloading a motor vehicle, the Wend defendants’ loss for purposes of section 11580.9, subdivision (c) must have arisen out of loading or unloading a motor vehicle; therefore, by assuming defense and indemnity of the Wend defendants in the Cole action, California Capital admitted its policy covered the loading or unloading of the trailers supplied by Joe’s Trucking. That conclusion does not follow.
The California Capital policy issued to the Wend defendants is designated as a farm owner’s policy. The basic insuring clause of the policy provides: “We will pay those sums that the ‘insured’ becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” The policy applies to bodily injury only if it is caused by an occurrence. “‘Occurrence'” is defined as “an accident.” The insured location includes: “a. The farm premises (including grounds and private approaches) and ‘residence premises’ shown in the Declarations,” as well as “c. Premises used by you in conjunction [*43] with the premises included in a. or b. above.”
California Capital’s assumption of the defense of the Wend defendants in the Cole action is not inconsistent with its policy’s exclusion of liability for bodily injury arising out of loading or unloading a motor vehicle. Its assumption of the defense acknowledged the potential for coverage of the Wend defendants’ liability for bodily injury arising out of the conduct of their harvesting operation on their property and the adjacent street. It was not an admission of coverage for loading and unloading of motor vehicles. Thus, California Capital’s assumption of the defense did not conclusively establish that its policy was “applicable to the same loss arising out of the loading or unloading of a motor vehicle” as the Scottsdale policy, as Scottsdale contends. Scottsdale has not demonstrated any error in the trial court’s conclusion that section 11580.9, subdivision (c) is inapplicable in this case. The same policy exclusion in the California Capital policy that applied to exclude coverage of the liability of Joe’s Trucking for loading and unloading of the trailers also applied to the Wend defendants’ liability for the same activity. The statute’s requirement that there be [*44] “two . . . policies applicable to the same loss arising out of the loading or unloading of a motor vehicle” was not met.

b. Potential for a covered liability
The second argument in Scottsdale’s cross-appeal is that its policy did not provide coverage to the Wend defendants for their liability in the Cole action. It argues there was no potential for a covered liability because the Wend defendants did not fall within the policy’s definition of “insured.”
In addressing the issue of duty to defend in the trial court, “‘the insured must prove the existence of a potential for coverage, while the insurer must establish the absence of any such potential. In other words, the insured need only show that the underlying claim may fall within policy coverage; the insurer must prove it cannot.’ [Citation.] Thus, an insurer may be excused from a duty to defend only when ‘”the third party complaint can by no conceivable theory raise a single issue which could bring it within the policy coverage.”‘” (Swift, supra, 59 Cal.4th at p. 288.) Here, the trial court found the potential for coverage existed. On appeal, the trial court’s judgment is presumed correct and the appealing party must affirmatively demonstrate prejudicial error. (In re Sade C. (1996) 13 Cal.4th 952, 994; Rayii, supra, 218 Cal.App.4th at p. 1408.) [*45] Thus, in its cross-appeal, Scottsdale bears the burden of demonstrating that the Cole complaint could “‘”by no conceivable theory raise a single issue which could bring it within the policy coverage.”‘” (Swift, at p. 288.)
The trial court reviewed the Cole pleadings, the extrinsic evidence revealed during discovery, and the contentions made by Cole’s attorney at or around the time the defense of the Wend defendants was first tendered to Scottsdale. The trial court concluded that, while the Cole pleadings alone did not raise a potential for a liability covered by the Scottsdale policy, those pleadings, combined with the extrinsic evidence, created a potential for a covered liability as of April 21, 2008, under the omnibus clause.
The omnibus clause of the Scottsdale policy defined the term “insured” to include “Anyone liable for the conduct of an ‘insured’ described above but only to the extent of that liability.” “[A]n ‘insured’ described above” included the named insured, Joe’s Trucking. Accordingly, the Wend defendants would be “insureds” entitled to a defense in the Cole lawsuit if they were potentially vicariously liable for the alleged negligence of Joe’s Trucking. The trial court found that the settlement [*46] demand letter from Cole’s attorney, dated July 24, 2008, set forth a theory of liability based on the special or peculiar risk doctrine, and indicated Cole would pursue a judgment against the Wend defendants based on vicarious liability for the conduct of their independent contractors.
“At common law, a person who hired an independent contractor generally was not liable to third parties for injuries caused by the contractor’s negligence in performing the work for which he or she was hired.” (Bowman v. Wyatt (2010) 186 Cal.App.4th 286, 305 (Bowman).) One exception to this rule is the doctrine of “‘peculiar'” or “‘special'” risk. (Ibid.) “‘One who employs an independent contractor to do work which the employer should recognize as likely to create during its progress a peculiar risk of physical harm to others unless special precautions are taken, is subject to liability for physical harm caused to them by the failure of the contractor to exercise reasonable care to take such precautions, even though the employer has provided for such precautions in the contract or otherwise.'” (Id. at p. 306, quoting Rest.2d Torts, § 416.)
“[T]he phrase ‘peculiar risk’ is used to mean a risk that is particular to the situation, not a risk that is odd or weird. [Citation.] The peculiar risk [*47] doctrine ensured that ‘a landowner who chose to undertake inherently dangerous activity on his land [c]ould not escape liability for injuries to others simply by hiring an independent contractor.'” (SeaBright Ins. Co. v. US Airways, Inc. (2011) 52 Cal.4th 590, 598.) “‘A critical inquiry in determining the applicability of the doctrine of peculiar risk is whether the work for which the contractor was hired involves a risk that is “peculiar to the work to be done,” arising either from the nature or the location of the work and “‘against which a reasonable person would recognize the necessity of taking special precautions.'” [Citations.] The term “peculiar risk” means neither a risk that is abnormal to the type of work done, nor a risk that is abnormally great; it simply means “‘a special, recognizable danger arising out of the work itself.'”‘” (Bowman, supra, 186 Cal.App.4th at p. 306.)
Scottsdale argues that California Capital failed to show that the Cole pleadings alleged the Wend defendants were vicariously liable for the acts of Joe’s Trucking. It also argues California Capital “attempted to create the extrinsic evidence needed to trigger a duty to defend by writing several letters to Scottsdale.” It critiques the letters California Capital wrote, tendering the defense of the Wend defendants [*48] to Scottsdale, asserting that California Capital misrepresented the allegations of the Cole pleadings. But Scottsdale’s focus on the actual allegations of the Cole complaints is misplaced. “[T]hat the precise causes of action pled by the third party complaint may fall outside policy coverage does not excuse the duty to defend where, under the facts alleged, reasonably inferable, or otherwise known, the complaint could fairly be amended to state a covered liability.” (MV Transportation, supra, 36 Cal.4th at p. 654.)
The trial court’s finding of a duty to defend was based not just on the allegations of the Cole complaints, but also on discovery in the Cole action. The trial court summarized deposition evidence, which indicated the Joe’s Trucking driver delivered the trailers, parked them where Tyler, the Wend defendants’ foreman, directed, unhooked them, and left them. He parked the trailers with the front facing oncoming westbound traffic. He did not place any cautionary signs or warning equipment toward westbound traffic; the only reflectors on the trailers were to the rear. Wend testified in deposition that it was standard practice to have the grapes loaded onto trailers by having a tractor and gondola use Shoemake Avenue, and do the [*49] dumping off that street. The trial court also noted counsel for Joe’s Trucking provided deposition summaries and interrogatory responses to Scottsdale while Joe’s Trucking was involved in the Cole action.
Counsel for California Capital also exchanged letters with coverage counsel for Scottsdale, in which counsel for California Capital argued that the Scottsdale policy provided coverage for defense and indemnity of the Wend defendants for the Cole accident. California Capital provided counsel for Scottsdale with a July 24, 2008, letter from Cole’s attorney, demanding a policy limits settlement and explaining Cole’s theories of liability. While the letter did not expressly assert that the Wend defendants could be held vicariously liable for the negligence of Joe’s Trucking, it argued the Wend defendants directed the Vink defendants to unload the grape gondolas from Shoemake Avenue, and “one who directs an independent contractor to perform the work in a negligent manner is responsible for any injury caused therefrom.” Cole’s counsel noted there was deposition testimony that Tyler was Wend’s foreman, he directed Joe’s Trucking where to park the trailers, and he directed the Vink defendants [*50] to unload the gondola in the street. Cole’s counsel also asserted there were violations of the Vehicle Code, regarding warning reflectors required when a vehicle is parked at night within ten feet of the road.
Under the peculiar risk doctrine, one who employs an independent contractor may be held liable for the contractor’s negligence, if (1) the contractor’s work involves a risk peculiar to that work because of the location of the work, (2) a reasonable person would recognize the necessity of taking special precautions to avoid the risk, and (3) the contractor negligently fails to take reasonable precautions. (Bowman, supra, 186 Cal.App.4th at p. 306.) On the facts set forth in his counsel’s July 24, 2008, letter, Cole could easily have amended his complaint to allege a peculiar risk claim against the Wend defendants, based on the allegations that Joe’s Trucking parked the trailers where the reflectors on the rear of the trailers were not facing westbound traffic, and failed to place appropriate lights, reflectors or other warnings facing westbound traffic on Shoemake Avenue to warn oncoming vehicles of the presence of the trailers and associated loading equipment. Scottsdale has not negated all potential for a covered liability, [*51] and therefore has not demonstrated error by the trial court in its conclusion that Scottsdale owed the Wend defendants a duty to defend under the policy it issued to Joe’s Trucking, as of the date of the tender of their defense to Scottsdale.
Scottsdale argues that the hirer of an independent contractor cannot be held vicariously liable for the contractor’s negligence unless there is a direct relationship between the victim’s injuries and the inherent risks of the work the contractor was hired to perform. (Citing Bowman, supra, 186 Cal.App.4th at p. 309.) It contends there was “no relationship between any risk inherent in Joe’s Trucking’s use of the trailers to haul grapes and the accident that took place while the grapes were being harvested.”
In Bowman, Wyatt owned and operated a dump truck that made a left turn in front of the plaintiff’s motorcycle, causing a collision that severely injured the plaintiff. (Bowman, supra, 186 Cal.App.4th at pp. 293-294.) Wyatt was under contract with the City of Los Angeles and had just delivered a load of asphalt to the city’s worksite; at the time of the accident, he was returning to the city yard to determine if there was another load for him to haul. (Id. at p. 295.) The jury found the city was liable for the accident on a peculiar risk theory. [*52] (Id. at p. 294.) The appellate court reversed. (Ibid.)
The court stated: “the dispositive issue for purposes of applying the peculiar risk doctrine to the present case is whether there was a direct relationship between the accident and the ‘particular work performed’ by Wyatt. [Citation.] In other words, if the ‘character’ of the work contributed to the accident, the peculiar risk doctrine applies. If the accident resulted from ‘ordinary’ use of the vehicle, the peculiar risk doctrine does not apply, notwithstanding the vehicle’s size and weight.” (Bowman, supra, 186 Cal.App.4th at p. 309.) The court concluded “there was no direct relationship between any risk inherent in hauling asphalt and the accident.” (Ibid.) At the time of the accident, Wyatt was not engaged in hauling or dumping asphalt, but simply traveling from a jobsite on ordinary streets. Wyatt’s negligence (running a stop sign) involved an ordinary failure to exercise due care in the operation of a motor vehicle. (Ibid.) The court concluded that, as a matter of law, the activity of the dump truck at the time of the accident did not constitute a peculiar risk. (Id. at p. 310.)
American States was an insurance coverage dispute, arising out of an accident in which Meza was driving a tractor-trailer [*53] into the entrance to a construction site when the rear portion of the trailer ran over a pedestrian. (American States, supra, 180 Cal.App.4th at pp. 22-23.) The issue on appeal was whether the insurers of the tractor-trailer owed a duty to defend the grading contractor, who had contracted for Meza’s services, under the doctrine of peculiar risk. (Id. at p. 25.) Each policy in issue included an omnibus clause, defining “insured” to include anyone liable for the conduct of an insured, to the extent of that liability. (Id. at pp. 27-28.)
The court characterized liability under the peculiar risk doctrine as “‘”vicarious” or “derivative” in the sense that it derives from the “act or omission” of the hired contractor, because it is the hired contractor who has caused the injury by failing to use reasonable care in performing the work.'” (American States, supra, 180 Cal.App.4th at pp. 29-30.) It concluded the hirer’s liability under the doctrine was vicarious, even “‘”when the person hiring an independent contractor ‘fails to provide in the contract that the contractor shall take [special] precautions.'”‘” (Id. at p. 30.)
The court concluded the insurers of the tractor-trailer owed the grading contractor a duty to defend because there was a potential for peculiar risk liability. (American States, supra, 180 Cal.App.4th at p. 32.) The accident did not arise out of an ordinary dump [*54] truck accident; there was evidence the trailer struck the injured party while the tractor-trailer was accessing the only entrance to the construction site, which required contractors, like Meza, “‘to execute a [U]-turn (driving westbound in eastbound lanes), encroach on at least two pedestrian cross walks [sic], jump a curb, and drive across a sidewalk . . ., all without assistance of . . . flagmen.'” (Id. at p. 31.) The “truck-trailer access of the Project entrance involved a special risk, peculiar to the work to be done, that arose out of the place where it was to be done, and against which a reasonable man would recognize the necessity of taking special precautions.” (Ibid.)
The court recognized it was irrelevant that the hirer of the independent contractor might also be found directly liable to the injured party for its own negligence. (American States, supra, 180 Cal.App.4th at p. 34.) It imposed the duty to defend only in the context of the hirer’s potential vicarious liability under the peculiar risk doctrine, and acknowledged the vicarious insurer providing a defense to the hirer might “have a right to be reimbursed for defense costs allocable to claims for which there was no potential vicarious coverage under the policy.” (Ibid.)
In [*55] the Cole case, the Wend defendants allegedly hired Joe’s Trucking to haul grapes. As part of that work, Joe’s Trucking left its trailers parked by the road for loading. Cole asserted that Joe’s Trucking parked the trailers facing the westbound lane, so the rear-facing reflectors could not be seen by oncoming westbound traffic, and that it failed to place any other reflectors or warning equipment, or take other precautionary measures, to alert drivers to the presence of the equipment. The injury occurred while the trailers were actively being loaded, in the dark, allegedly without adequate warning devices. Under these circumstances, we conclude the trial court correctly determined there was a potential for liability on a theory of peculiar risk: the work involved a special risk, peculiar to the work to be done, that arose out of the place where it was to be done, and against which a reasonable person would recognize the necessity of taking special precautions. (American States, supra, 180 Cal.App.4th at p. 31.) There was a direct relationship between the risk inherent in the work at that location, the alleged failure to take adequate precautions, and the accident that injured Cole. As American States pointed out, it is irrelevant [*56] to Scottsdale’s duty to defend that Cole also sought to impose liability on the Wend defendants for their own direct negligence; allocation or reimbursement of defense costs for claims that do not present a potential for a covered liability is a separate issue. (Id. at p. 34.)
We find no error in the trial court’s conclusion that Scottsdale had a duty to defend the Wend defendants in the Cole action.

5. Apportionment of defense costs
California Capital contends the trial court erred in apportioning defense costs between it and Scottsdale based on a ratio using its full policy limits ($500,000) and the amount of the Scottsdale policy limits remaining after its settlement on behalf of Joe’s Trucking and the owner of the trailers ($235,000). The trial court awarded damages to California Capital for Scottsdale’s breach of the duty to defend based on equitable contribution. It used a ratio of Scottsdale’s remaining policy limits to the available policy limits of both insurers (i.e., $235,000/$735,000 or 32 percent) and applied it to the defense costs incurred beginning April 21, 2008 ($581,590.90).
It awarded California Capital $186,013.08 in defense costs. California Capital contends the trial court abused [*57] its discretion by not awarding it 50 percent of its defense costs, based on equal sharing, or 66.6 percent, based on a ratio of Scottsdale’s full policy limits to the total limits of both insurers ($1 million/$1.5 million).
“Equitable contribution . . . is the right to recover, not from the party primarily liable for the loss, but from a co-obligor who shares such liability with the party seeking contribution. In the insurance context, the right to contribution arises when several insurers are obligated to indemnify or defend the same loss or claim, and one insurer has paid more than its share of the loss or defended the action without any participation by the others.” (Fireman’s Fund, supra, 65 Cal.App.4th at p. 1293, fn. omitted.) “Equitable contribution permits reimbursement to the insurer that paid on the loss for the excess it paid over its proportionate share of the obligation, on the theory that the debt it paid was equally and concurrently owed by the other insurers and should be shared by them pro rata in proportion to their respective coverage of the risk. The purpose of this rule of equity is to accomplish substantial justice by equalizing the common burden shared by coinsurers, and to prevent one insurer from profiting [*58] at the expense of others.” (Ibid.)
“‘The costs of defense must be apportioned on the basis of equitable considerations not found in the insurers’ own contracts, since the insurance companies who must share the burden do not have any agreements among themselves. The courts have expressly declined to formulate any definitive rules for allocating defense costs among carriers, because of the “varying equitable considerations which may arise, and which affect the insured and the . . . carriers, and which depend upon the particular policies of insurance, the nature of the claim made, and the relation of the insured to the insurers.”‘ [Citation.] Questions as to whether the nonparticipating insurer breached the duty of good faith and fair dealing toward its insured or otherwise acted tortiously are not at issue in an equitable contribution action. [Citation.] Equitable contribution does not depend on fault; it is based on an equitable apportionment of contractual undertakings.” (Scottsdale Ins. Co. v. Century Surety Co. (2010) 182 Cal.App.4th 1023, 1032-1033 (Century).)
In exercising its discretion in the allocation of defense costs, “a trial court must determine which method of allocation will most equitably distribute the obligation among the insurers ‘pro rata in proportion [*59] to their respective coverage of the risk,’ as ‘a matter of distributive justice and equity.'” (Centennial Ins. Co. v. United States Fire Ins. Co. (2001) 88 Cal.App.4th 105, 111 (Centennial).) Courts have adopted different approaches to apportioning the burden of defense among insurers. These methods have included:
“(1) apportionment based upon the relative duration of each primary policy as compared with the overall period of coverage during which the ‘occurrences’ ‘occurred’ (the ‘time on the risk’ method) [citations]; (2) apportionment based upon the relative policy limits of each primary policy (the ‘policy limits’ method) [citations]; (3) apportionment based upon both the relative durations and the relative policy limits of each primary policy, through multiplying the policies’ respective durations by the amount of their respective limits so that insurers issuing primary policies with higher limits would bear a greater share of the liability per year than those issuing primary policies with lower limits (the ‘combined policy limit time on the risk’ method) [citation]; (4) apportionment based upon the amount of premiums paid to each carrier (the ‘premiums paid’ method) [citation]; (5) apportionment among each carrier in equal shares up to the policy limits of [*60] the policy with the lowest limits, then among each carrier other than the one issuing the policy with the lowest limits in equal shares up to the policy limits of the policy with the next-to-lowest limits, and so on in the same fashion until the entire loss has been apportioned in full (the ‘maximum loss’ method) [citation]; and (6) apportionment among each carrier in equal shares (the ‘equal shares’ method) [citation].” (Centennial, supra, 88 Cal.App.4th at pp. 112-113.)
“‘The proper allocation of costs is within a trial court’s broad discretion. [Citations.]’ [Citation.] ‘We review the trial court’s ultimate equitable determination in allocating liability among the responsible insurers for abuse of discretion. [Citations.] An abuse of discretion occurs when, in light of applicable law and considering all relevant circumstances, the court’s ruling exceeds the bounds of reason.'” (St. Paul Mercury Ins. Co. v. Mountain West Farm Bureau Mutual Ins. Co. (2012) 210 Cal.App.4th 645, 662 (St. Paul).)
The trial court determined the defense costs incurred by California Capital from and after April 21, 2008, the date on which Scottsdale’s duty to defend arose, should be allocated in proportion to the policy limits remaining on the insurers’ respective policies at that time. Thus, it used a ratio based on Scottsdale’s remaining policy limits, [*61] after its settlement on behalf of Joe’s Trucking and the owner of the trailers, and the total available limits, which included that amount plus California Capital’s entire policy limits.
Apportionment based upon the relative policy limits of each primary policy is an accepted method of allocating costs of defense. (Centennial, supra, 88 Cal.App.4th at p. 112.) The trial court adjusted that method to the circumstances of the Cole case. Scottsdale’s duty to defend the Wend defendants did not arise until April 21, 2008. By that time, Scottsdale had already settled the liability of its other insureds, reducing the policy limits remaining to $235,000. At the time of its settlement on behalf of the other defendants, Scottsdale owed no duty to defend or indemnify the Wend defendants, so the settlement on behalf of other defendants was not wrongful or in derogation of the Wend defendants’ rights. Under the circumstances of this case, we conclude the trial court’s exercise of its discretion in allocating defense costs did not exceed the bounds of reason. Therefore, we find no abuse of the trial court’s discretion.

B. Duty to Indemnify
“An insurer’s duty of indemnification requires a determination of actual coverage under the policy.” ( [*62] Advanced Network, Inc. v. Peerless Ins. Co. (2010) 190 Cal.App.4th 1054, 1060 (Advanced).) “The insured has the burden of proving his or her claim is within the basic scope of coverage, while the insurer has the burden of proving exclusions to coverage.” (Regional Steel Corp. v. Liberty Surplus Ins. Corp. (2014) 226 Cal.App.4th 1377, 1394.) “‘An insurance policy’s coverage provisions must be interpreted broadly to afford the insured the greatest possible protection, while a policy’s exclusions must be interpreted narrowly against the insurer.'” (Energy Ins. Mutual Limited v. Ace American Ins. Co. (2017) 14 Cal.App.5th 281, 291.)
The ordinary rules of contract interpretation apply to insurance policies. (Advanced, supra, 190 Cal.App.4th at p. 1060.) The goal of interpretation is to give effect to the mutual intention of the parties. (Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co. (1996) 45 Cal.App.4th 1, 36.) That intent is to be inferred, if possible, solely from the written provisions of the contract. (Ibid.) “Words in an insurance policy are to be interpreted as a layperson would interpret them, in their ‘”ordinary and popular sense.”‘” (Ibid.) “If particular policy language is ambiguous, it is to be resolved by interpreting the ambiguous provisions in accordance with the insured’s objectively reasonable expectations.” (Ibid.) “The interpretation of an insurance policy is a question of law for our independent review.” (Advanced, at p. 1061.)

1. Definition of “insured”
The Scottsdale policy provided: “We will pay all sums an ‘insured’ legally must pay as damages [*63] because of ‘bodily injury’ or ‘property damage’ to which this insurance applies, caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto.'” Scottsdale contends it was not liable to indemnify the Wend defendants for the judgment in the Cole action, because they were not “insureds” under any definition of that term in the policy. The trial court found the Wend defendants were insureds under the permissive use provision of the policy; they were permissive users of the Joe’s Trucking trailers, which were vehicles covered by the Scottsdale policy.
The permissive user provision of the Scottsdale policy defined “insured” to include:
“(b) Anyone else while using with your permission a covered ‘auto’ you own, hire or borrow except [¶] . . . [¶]
“(4) Anyone other than your ’employees,’ . . . a lessee or borrower or any of their ’employees,’ while moving property to or from a covered ‘auto.'”
Scottsdale does not contend the Wend defendants failed to satisfy the “permission” portion of the definition. It concedes, as the trial court found, that the Wend defendants, through their agent Tyler, hired Joe’s Trucking to haul the grapes; Joe’s Trucking left the trailers [*64] parked on site to be loaded, after which it was to return and deliver the trailer-load of grapes. Scottsdale contends the Wend defendants did not “use” the trailers, because “the construction of the term ‘use’ as applied to the trailers is too remote from the vehicle that injured Mr. Cole.”
The definition of “using” a vehicle includes loading or unloading the vehicle. (§ 11580.06, subd. (g); Argonaut Ins. Co. v. Transport Indem. Co. (1972) 6 Cal.3d 496, 506.) Scottsdale contends, however, that the Cole vehicle collided with the grape gondola, not the trailers provided by Joe’s Trucking, and therefore the use of the trailers was too remote from the injury to qualify as a covered “use” of the trailers. The cases Scottsdale cites do not support this contention.
In State Farm Mutual Automobile Ins. Co. v. Grisham (2004) 122 Cal.App.4th 563 (Grisham), Vandergriff drove his pickup to visit a friend; his dogs were in the back of the pickup, within a camper shell. While Vandergriff was absent, the dogs escaped from the pickup and bit Grisham. (Id. at p. 565.) The court determined Vandergriff’s automobile liability policy on the pickup did not cover Grisham’s claim for damages because the injury was not “’caused by accident resulting from the ownership, maintenance or use'” of the pickup. (Id. at pp. 566, 570.) Prior cases required “‘[s]ome minimal causal connection’ between the ‘use’ of [*65] the vehicle and the accident” or applied a “predominating cause/substantial factor test.” (Id. at p. 566.) The court applied the predominating cause/substantial factor test, under which “the use of the vehicle must contribute in some way to the injury beyond merely serving as the situs of the injury. Something involving the vehicle’s operation, movement, or maintenance, or its loading or unloading must be a contributing cause.” (Id. at p. 567.) The court concluded the dog bite did not result from the use of the pickup. “The truck did not contribute to the injury beyond merely transporting the dog to a place near the injury site. The situation here is similar to where a vehicle merely transports a tortfeasor to a site, and he commits a tort after departing the vehicle. This situation does not establish ‘”the requisite causal relationship”‘ between the use of the vehicle and the injury.” (Id. at p. 568.) The injury did not occur in the course of the truck being operated, moved, maintained, loaded or unloaded. (Ibid.)
The Cole case did not present a situation in which the trailers were merely used to transport a tortfeasor to the site of the tort, and were not involved in the commission of the tort. The Grisham court recognized [*66] that the requisite causal connection may exist when “[s]omething involving the vehicle’s . . . loading or unloading” contributed to the cause of the injury. (Grisham, supra, 122 Cal.App.4th at p. 567.) Cole’s injury occurred while the trailers were actively being loaded; the jury found his injury was caused by the loading operation. Cole’s injury was not remote from the use of the trailers.
In International Business Machines Corp. v. Truck Ins. Exch. (1970) 2 Cal.3d 1026 (IBM), two employees of Red Line were told to move a desk from an IBM building to the Red Line warehouse. They parked their Red Line truck in the receiving area of the IBM building, entered, put the desk on a dolly, and wheeled it to the receiving area. Part way across the receiving area, one employee slipped on an eraser on the floor and fell, sustaining injuries. The eraser was of the type used by IBM, and the court assumed its presence was due to IBM’s negligence. (Id. at p. 1028.) IBM tendered defense of the injured employee’s action to Truck Insurance, Red Line’s insurer, which denied coverage. The court held “that IBM’s maintenance of the loading dock does not in itself convert IBM into a ‘user’ of the Red Line truck; hence IBM is not an additional insured under the Truck policy.” (Id. at pp. 1028, 1032.)
The court stated: “The ‘use’ of a vehicle includes its loading and unloading. [*67] [Citations.] Such ‘use’ includes the complete operation of pickup and delivery. . . . [¶] Although [the Red Line employees] were thus engaged in the loading of the truck, neither of them served as an agent or employee of IBM. . . . [T]he question, then, is ‘not whether the accident occurred during the unloading, but, rather, whether the injury arose out of the use of the vehicle.’ Did IBM, the shipper, become a ‘user’ of the truck by reason of the fact it maintained the loading dock?” (IBM, supra, 2 Cal.3d at p. 1029.) The court observed: “In certain circumscribed situations, the courts have held that the shipper is a user of the truck. Thus, the shipper becomes a user of the truck if its own employees participate in the loading or unloading [citations], or if its employees supervise the operation.” (Id. at pp. 1029-1030.) But IBM’s only basis for liability was maintenance of the loading area, which the court concluded did not constitute “use” of the truck. (Id. at pp. 1030-1032.)
IBM considered the liability of the shipper, i.e., “the originator of the shipment in cases of injuries during the loading process, and . . . the receiver of the shipment in cases of injuries during unloading” (IBM, supra, 2 Cal.3d at p. 1029, fn. 2), whose employees were not involved in loading the truck. The court recognized [*68] that the shipper uses the vehicle when its employees load the vehicle or supervise the loading operation. (Id. at pp. 1029-1030.) The Cole jury found the Wend defendants negligently directed the harvesting work (which included actively loading the trailers at the time of the injury); it found the negligence of both the Wend defendants and Joe’s Trucking contributed to Cole’s injuries. We conclude that, unlike the situation in IBM, the Wend defendants were using the trailers at the time of Cole’s injury, and that use was found to be a substantial factor in causing Cole’s injury. The use of the trailers was not too remote from the injury to qualify the Wend defendants as insureds under the Scottsdale policy.
In Dillon v. Hartford Acc. & Indem. Co. (1974) 38 Cal.App.3d 335 (Dillon), the Dillons, lessees of farm property, provided a tractor to Sharp to use in the development of a well on the property. (Id. at pp. 337-338.) While Cox, an employee of Sharp, was driving the tractor, it became stuck in the sand. (Id. at p. 338.) Cox attached a chain between the front of the tractor and the back of a truck owned by Sharp, and pulled the tractor free. While Cox was removing the chain, the tractor began to move and Cox got caught in the chain and was pulled under the truck, injuring him. (Ibid.) Cox sued [*69] the Dillons, alleging the tractor was defective and they failed to provide him safe work premises. (Ibid.)
The Dillons sued Hartford for declaratory relief, seeking a determination that Hartford had a duty to defend them in the Cox action, as permissive users under the automobile liability portion of a policy Hartford issued to Sharp that insured the truck. (Dillon, supra, 38 Cal.App.3d. at pp. 338-339.) The Dillons admitted the tractor was not a covered vehicle under the Hartford policy. (Id. at p. 339.) They contended the allegations of the Cox complaint were sufficiently broad to present a potential for finding they were using, or were legally responsible for the use of, the truck. (Ibid.) The crucial question was whether there was a potential liability under the insurance policies based on use of the truck. (Ibid.)
The court reviewed cases stating that “‘”use”‘” of a vehicle requires “‘a causal connection between the use and the injury,'” “‘the resulting injury must be a “natural and reasonable incident or consequence of the use of the [automobile], . . . [and] the injury cannot be said to arise out of the use of an automobile “if it was directly caused by some independent act, or intervening cause wholly disassociated from, independent [*70] of and remote from the use of the [automobile].”‘” (Dillon, supra, 38 Cal.App.3d at p. 341.) The court concluded Hartford had no duty to defend under the automobile policy, because there was no potential liability for use of the truck. (Id. at pp. 343-344.) The Cox lawsuit was not predicated on a theory that the truck caused or contributed to the accident. It was based on theories that the tractor was defective and the Dillons were in control of the premises and failed to provide a safe workplace. “In addition, the undisputed evidence shows that the insured truck had no causal connection with the accident.” (Ibid.)
Unlike the Dillon case, in the Cole action, the plaintiff alleged the insured vehicles (the trailers) contributed to the cause of the accident. He alleged violations of various Vehicle Code sections in parking the trailers close to the street and failing to use warning devices that would have alerted drivers to their presence. The Cole jury found that the conduct of the Vink defendants “and/or” Joe’s Trucking was a substantial factor in causing Cole’s injuries. Its verdict included an apportionment of liability (albeit a small percentage) to Joe’s Trucking, whose only basis for liability was the trailers and their role in the [*71] grape loading operation. Thus, the jury found that the trailers, which were being loaded during the harvesting operation, contributed to the accident in which Cole was injured.
Scottsdale argues that the exception in the definition of a permissive user, applicable to “[a]nyone other than your ’employees,’ . . . a lessee or borrower or any of their ’employees,’ while moving property to or from a covered ‘auto,'” applied to exclude the Wend defendants as insureds. It argues the Wend defendants were not lessees or borrowers of the trailers, so they fell within the exception and were not permissive users of the trailers. It asserts the trial court “specifically found . . . that the Wends were not lessees or borrowers of the trailers.”
In Home Indemnity Co. v. King (1983) 34 Cal.3d 803 (King), the automobile insurance policy in issue defined “‘persons insured'” to include the named insured and “‘any other person while using an owned automobile or a hired automobile with the permission of the named insured . . . but with respect to bodily injury or property damage arising out of the loading or unloading thereof, such other person shall be an insured only if he is: [¶] 1. a lessee or borrower of the automobile, or [¶] 2. an employee of the named [*72] insured or of such lessee or borrower . . . .'” (Id. at p. 808, italics omitted.) The policy did not define the term “borrow.” The court defined “‘borrow'” as: “‘To receive temporarily from another, implying or expressing the intention either of returning the thing received or of giving its equivalent to the lender.'” (Id. at p. 813.) It defined “borrower” as: “someone who, with the permission of the owner, has temporary possession and use of the property for his own purposes; possession connotes the right to exercise dominion and control.” (Ibid.)
In King, King drove his employer’s truck and trailer to a terminal to deliver and pick up cargo. (King, supra, 34 Cal.3d at pp. 806-807.) There, he hired an independent forklift operator, Martin, to load the trailer. In the process, Martin dislodged some crates in the trailer, and they fell on King and injured him. The trial court found Martin was an insured under King’s employer’s policy covering the truck, because he was a “borrower” of the truck while he was loading it. (Id. at p. 809.) The reviewing court disagreed.
King asserted Martin was a borrower by virtue of Martin’s contract with King and his employer; he argued “that Martin had possession and control of the truck and trailer because if moving the rig had [*73] been necessary for the loading operation, both King and [his employer] would have been under an implied contractual obligation of good faith and fair dealing to permit him to do so.” (King, supra, 34 Cal.3d at p. 813.) The court concluded: “The only evidence of dominion and control comes from this implied contractual obligation of good faith and fair dealing. There was no evidence that Martin either moved the rig or had express authority to do so. Nor, for that matter, was there any evidence of the authority of forklift operators generally with respect to vehicles being loaded or unloaded. We find the evidence insufficient to show that Martin exercised the requisite dominion and control over the truck and trailer to be a ‘borrower’ under the terms of the policy.” (Id. at pp. 813-814, fn. omitted.)
In City of Los Angeles v. Allianz Ins. Co. (2004) 125 Cal.App.4th 287 (Allianz), San Joaquin Composting (SJC) had a contract to purchase biosolids from the city and haul them away from the city’s treatment plant. It hired MSM Trucking as a trucker to do the hauling. (Id. at p. 290.) MSM’s employee, Haygood, drove a truck to the plant, and followed instructions of city employees regarding where to drive and how to position the truck for loading. While the truck was being weighed, Haygood left the vehicle and was injured [*74] when he fell from the scale. (Id. at p. 291.)
The city sought coverage under MSM’s insurance policy. The issue was whether the city was a borrower of the MSM truck under MSM’s insurance policy. (Allianz, supra, 125 Cal.App.4th at pp. 289-290.) Insureds under the policy included, “by virtue of an exclusion from an exception to coverage, MSM’s ’employees, partners, a lessee or borrower or any of their employees, while moving property to or from a covered auto.’ Thus, if the City was a borrower of the truck during the loading process, it was an insured under MSM’s policy and was entitled to coverage for Haygood’s injuries.” (Id. at p. 290.) Using the definition of borrower set out in King, the court concluded the city was not a borrower of the truck. (Allianz, at pp. 291-293.) It stated the proper focus in determining dominion and control was on control of the truck, not the loading process. (Id. at p. 293.) “Haygood maintained control over his truck at all times during the loading operation, and merely followed directions as to positioning, weighing and inspection procedures provided in the City’s contract with SJC.” (Ibid.)
The court concluded: “In sum, the sine qua non of borrowing a vehicle is the exercise of dominion and control over the vehicle, whether through the use of the vehicle in [*75] the pursuit of one’s own purposes or through possession and custody of the vehicle. In this case, none of the indicia of dominion and control are present. The City did not have possession or custody of the truck. Further, it did not have the use of the truck for its own purposes, to the exclusion of its owner. On the contrary, the truck was at all times being used to perform MSM’s hauling contract with [SJC]. Under these circumstances, the requisite dominion and control over the truck was lacking, and the City was not a borrower under the terms of the policy.” (Allianz, supra, 125 Cal.App.4th at p. 296.)
In addressing whether the Wend defendants were borrowers of the trailers, for purposes of the limitation on the exception to the definition of “insureds” found in section (b)(4) of that definition, the trial court discussed King and Allianz. It cited the definitions of borrow and borrower set out in King. It noted that, in Allianz, “[t]he trucker never relinquished his truck to the City, at all times the truck remained in his possession and under his control.”
The trial court found the Wend defendants hired Joe’s Trucking to haul their grapes to wineries. The scope of the work of Joe’s Trucking included delivering empty trailers [*76] to be loaded, and returning after they were loaded to pick up the trailers and deliver the grapes to the wineries. In contrast to Allianz, where the trucker did not relinquish control of the truck to the city, the trial court found Joe’s Trucking left the trailers on the side of Shoemake Avenue to be loaded, leaving them in the possession and control of Tyler, the Wend defendants’ agent, to accomplish the loading. The trial court expressly found “Joe’s Trucking had relinquished control over its trailers giving possession of the trailers, albeit temporarily, to Tyler to accomplish the task of loading and unloading.” Therefore, it concluded, the Wend defendants were permissive users of the trailers. The trial court could only have reached that conclusion by finding, as it did, that the Wend defendants were in possession and control of the trailers, and therefore met the definition of “borrower” set out in King and Allianz.
Scottsdale does not challenge the sufficiency of the evidence to support any of these findings. Rather, it focuses on the next portion of the trial court’s decision and asserts the trial court found the Wend defendants were not borrowers of the trailers. In that portion [*77] of the decision, the trial court stated: “Although not necessary to do so, having found permissive use, the court finds the Wend defendants were not lessees of the trailers and were not ‘borrowers’ under the section (4) exception. The trailers were not left on the side of the road to be used exclusively for the Wends’ purposes, the trailers were left to accomplish the loading of grapes Joe’s Trucking was hired to take transport.”
Read literally, this statement appears to conflict with the trial court’s express factual findings and conclusions. The trial court itself, however, noted that this statement was not necessary to its decision. We read the statement narrowly, as a recognition that the Wend defendants were not permissive users of the trailers for all purposes, but only for the purpose of loading them on site. In its decision, the court noted that, prior to Cole’s accident, Tyler had “‘bumped’ or ‘moved'” the trailers with a forklift, without contacting Joe’s Trucking; he did so at the request of the California Highway Patrol, because of another accident that had occurred on the preceding day. The court noted it “may have reached a different result [on the issue of permissive [*78] use] if, for example, Tyler had hooked up the trailers and moved them to an entirely different location.” Consequently, we interpret the trial court’s statement as a recognition that the Wend defendants were borrowers, and therefore permissive users, of the trailers only for the limited purpose of loading them at the location where they were parked by Joe’s Trucking. Because Cole’s injury occurred during the loading of the trailers at that site, it occurred within the scope of the permissive use granted by Joe’s Trucking. Therefore, the court’s statement regarding the limited nature of the borrowing was, as it said, unnecessary to the decision.
We conclude the trial court did not err in finding the Wend defendants were insureds under the Scottsdale policy, as permissive users of the trailers supplied by Joe’s Trucking.

2. Use of the trailers
The Scottsdale policy promised to “pay all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ . . . to which this insurance applies, caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto.'” Scottsdale seems to contend Cole’s injuries did not result from “use of a covered ‘auto,'” i.e., [*79] the trailers, because the Cole vehicle did not collide with the trailers. The trial court stated that the lack of impact with the trailers did not defeat a finding that the trailers were a cause of the accident; it was merely a factor to be considered in making that determination. The trial court noted cases holding that “use” of a vehicle included loading and unloading it. It quoted Grisham’s statement that “‘[s]omething involving the vehicle’s operation, movement, or maintenance, or its loading or unloading must be a contributing cause.'” The trial court concluded that, “[i]n the Cole matter the accident did occur during the loading and unloading and the trailers are in close proximity to the gondola” with which the Cole vehicle collided. It concluded the Wend defendants were “using” the trailers at the time of the accident.
The Cole jury found the Vink defendants “and/or” Joe’s Trucking failed to use reasonable care to take safety measures to avoid the risk of unloading the grape gondola from the street, and this failure was a cause of Cole’s harm. It also found the Wend defendants were negligent in directing the harvesting work, and their negligence was also a substantial factor in causing Cole’s [*80] harm. Thus, the Wend defendants were found liable for the harvesting operation, including the loading of the trailers. The Cole jury apportioned the bulk of the liability to the Wend defendants, but also apportioned four percent of the liability to the Vink defendants and one percent to Joe’s Trucking. Consequently, the Cole jury found that, although the Cole vehicle collided with the grape gondola, the trailers, and their part in the loading operation, also contributed to the accident.
We conclude the trial court did not err in finding that the Wend defendants’ use of the trailers was a cause of Cole’s injury, and therefore Scottsdale owed the Wend defendants a duty to indemnify them for the judgment in the Cole action.

3. Defenses and apportionment
After concluding Scottsdale owed the Wend defendants a duty to indemnify them in the Cole action, the trial court considered whether Scottsdale was required to equitably contribute to the payment that satisfied the judgment. It discussed the unclean hands and mitigation of damages defenses raised by Scottsdale, and considered California Capital’s conduct in the Cole litigation. Both defenses were based on Scottsdale’s assertion that California [*81] Capital should have settled the Cole action within its policy limits rather than taking the case to trial and incurring the resulting judgment, which was far in excess of either insurer’s policy limits. The trial court opined that “[t]he refusal of Scottsdale to accept the defense or indemnify did not absolve California Capital of its obligation to put the interests of its insured above its own.” The trial court concluded that, because California Capital could have, but did not, settle the Cole action within its policy limits, it “put its own interests before the interests of the insured.” Further, California Capital failed to show it paid more than its fair share of the loss, it was “solely responsible for the decisions it made,” and it was not entitled to recover any of the amount it paid to satisfy the Cole judgment.
We review for abuse of discretion the trial court’s equitable determination in allocating the indemnity amount entirely to California Capital. (St. Paul, supra, 210 Cal.App.4th at p. 662.) A trial court abuses its discretion when its ruling exceeds the bounds of reason or when it misunderstands or misapplies the applicable legal standard. (Ibid.; Hernandez v. Amcord, Inc. (2013) 215 Cal.App.4th 659, 680.) We conclude the trial court misinterpreted or misapplied the applicable [*82] law when it failed to apportion the amount paid to satisfy the Cole judgment between the two insurers. It therefore abused its discretion.
“[W]here two or more insurers independently provide primary insurance on the same risk for which they are both liable for any loss to the same insured, the insurance carrier who pays the loss or defends a lawsuit against the insured is entitled to equitable contribution from the other insurer or insurers, without regard to principles of equitable subrogation.” (Fireman’s Fund, supra, 65 Cal.App.4th at p. 1289, italics added.) “Whereas subrogation requires that the party to be charged be in an ‘equitable position . . . inferior to that of the insurer’ such that justice requires the entire loss be shifted from the insurer to the party to be charged [citation], contribution permits liability for the loss to be allocated among the various insurers without regard to questions of comparative fault or the relative equities between the insurers.” (Id. at p. 1296, italics added.) “Questions as to whether the nonparticipating insurer breached the duty of good faith and fair dealing toward its insured or otherwise acted tortiously are not at issue in an equitable contribution action. [Citation.] Equitable contribution does not [*83] depend on fault; it is based on an equitable apportionment of contractual undertakings.” (Century, supra, 182 Cal.App.4th at p. 1033.) Likewise, we conclude questions regarding whether the insurer who provided a defense and indemnity breached the duty of good faith and fair dealing to the insured also are not a consideration in an equitable contribution action.
Although the trial court expressly found that equitable subrogation did not apply, and purported to apply only principles of equitable contribution in apportioning the loss, it nevertheless considered concepts of bad faith and the equities of California Capital’s litigation conduct. In doing so, it one-sidedly considered only California Capital’s refusal to settle, then allocated the loss entirely to California Capital, despite the fact it also found Scottsdale breached its contractual obligations to the Wend defendants by refusing the tender of defense and indemnity in the Cole action.
Equitable contribution does not take into account breaches of the duty of good faith and fair dealing, which includes the duty to settle. When multiple insurance policies cover the same loss, the loss is allocated among the insurers without regard to questions of comparative fault or negligence [*84] of the insurers, because the insurers’ obligations to protect the insured arise from each insurance contract. (Hartford Accident & Indemnity Co. v. Superior Court (1994) 29 Cal.App.4th 435, 440 (Hartford Acc. & Indem.).) Equitable contribution apportions the loss between two or more insurers on the same risk, because each owes the insured a separate, independent contractual duty to cover the loss. The aim is to apportion the loss so that each insurer pays its fair share and one does not profit at the expense of the others. (Fireman’s Fund, supra, 65 Cal.App.4th at p. 1296.)
In Continental Casualty Co. v. Zurich Ins. Co. (1961) 57 Cal.2d 27 (Continental), the insurer who defended the insured in the third party action sued two other insurers, whose policies provided coverage for the third party’s injury, for declaratory relief and recovery of defense and indemnity costs. Although the plaintiff insurer had defended the insured and the others had not, the court did not shift the entire cost of defense to the insurers who had breached their obligation of defense. Instead, it stated: “all obligated carriers who have refused to defend should be required to share in costs of the insured’s defense, whether such costs were originally paid by the insured himself or by fewer than all of the carriers.” (Id. at p. 37, italics added.) The court upheld the trial court’s apportionment of the judgment [*85] and defense costs among all three insurers. (Id. at pp. 31, 38.) Thus, an insurer who fails to perform its contractual obligations to its insured is not thereby required to incur the entire expense of defense and indemnity, nor are other insurers thereby excused from performing their own contractual obligations to the insured.
Although the trial court found both California Capital and Scottsdale were primary insurers of the Wend defendants, it failed to apportion the loss between the two insurers, who were both contractually obligated to pay it. “[N]o insurer which deliberately breaches its obligation to the insured should be permitted thereby to profit, whether at the expense of the insured, or of an insurer which faithfully discharges its obligation.” (Continental, supra, 57 Cal.2d at p. 38.) Scottsdale, which did not defend or indemnify the Wend defendants, or settle the Cole action, was permitted to profit from its conduct by shifting the entire cost of indemnifying the Wend defendants for the judgment to California Capital.
The doctrine of unclean hands cannot be used to entirely excuse Scottsdale from performing its own contractual obligations to the Wend defendants. “The venerable doctrine of unclean hands arises from the maxim that one [*86] who comes to court seeking equity must come with clean hands. [Citation.] ‘The doctrine demands that a plaintiff act fairly in the matter for which he seeks a remedy. He must come into court with clean hands, and keep them clean, or he will be denied relief, regardless of the merits of his claim.’ [¶] . . . [¶] ‘The misconduct that brings the unclean hands doctrine into play must relate directly to the cause at issue . . . . The misconduct must “‘”prejudicially affect . . . the rights of the person against whom the relief is sought so that it would be inequitable to grant such relief.”‘”‘” (Jay Bharat Developers, Inc. v. Minidis (2008) 167 Cal.App.4th 437, 445.) “The issue is not that the plaintiff’s hands are dirty, but rather ‘”‘that the manner of dirtying renders inequitable the assertion of such rights against the defendant.'”‘” (Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820, 846.)
California Capital’s failure to settle the Cole action did not cause Scottsdale to have a contractual obligation to defend or indemnify the Wend defendants in that action. Scottsdale’s contractual obligations toward the Wend defendants existed independent of any conduct of California Capital. California Capital’s failure to settle the Cole action did not render it inequitable to hold Scottsdale to its independent contractual [*87] obligations in apportioning the costs of indemnity between the insurers.
For the same reasons, we conclude Scottsdale’s defense of failure to mitigate damages, based on California Capital’s refusal to settle the underlying action prior to trial, is not an appropriate basis on which to deny equitable contribution. It also injects concepts of fault and the relative equities of the insurers’ conduct in the underlying action into an apportionment that should be based on the insurers’ relative contractual obligations to the insured. Such considerations do not apply to an equitable contribution cause of action.
A remaining question is whether Scottsdale is liable for its equitable portion of the judgment that is either in excess of its policy limits or in excess of the limits remaining on its policy after settlement on behalf of other parties. When an insurer’s only wrong is a denial of the duty to defend, and it had no opportunity to settle the litigation, it generally is not liable in excess of its policy limits. (State Farm Mut. Auto. Ins. Co. v. Allstate Ins. Co. (1970) 9 Cal.App.3d 508, 528.) However, when the insurer rejects a reasonable offer to settle within policy limits, it may be liable for an excess judgment. (Ibid.)
In Johansen v. California State Auto. Assn. Inter-Ins. Bureau (1975) 15 Cal.3d 9 (Johansen), the insurer assumed the [*88] defense of its insured in a personal injury action, subject to a reservation of the right to litigate whether there was coverage for the loss under the policy. (Id. at p. 13.) The injured party offered to settle the claim against the insured for policy limits. Although the insurer “conceded the virtual certainty of a judgment . . . in excess of policy limits,” it refused the offer in the absence of a judicial determination that the policy provided coverage. (Ibid.) The injured party obtained a judgment against the insured in excess of policy limits. The insurer’s declaratory relief action subsequently determined the policy covered the loss, so the insurer paid its policy limits. The injured party, as assignee of the insured, sued for the excess. (Id. at p. 14.)
The court reversed the judgment in favor of the insurer, which was based on the trial court’s finding that the insurer did not act in bad faith because it had a good faith belief that coverage did not exist. “The implied covenant of good faith and fair dealing imposes a duty on the insurer to settle a claim against its insured within policy limits whenever there is a substantial likelihood of a recovery in excess of those limits.” (Johansen, supra, 15 Cal.3d at pp. 14-15.) “‘An insurer who [*89] denies coverage does so at its own risk and although its position may not have been entirely groundless, if the denial is found to be wrongful it is liable for the full amount which will compensate the insured for all the detriment caused by the insurer’s breach of the express and implied obligations of the contract.’ [Citation.] Accordingly, . . . an insurer’s ‘good faith,’ though erroneous, belief in noncoverage affords no defense to liability flowing from the insurer’s refusal to accept a reasonable settlement offer.” (Id. at pp. 15-16.) “[I]n deciding whether or not to compromise the claim, the insurer must conduct itself as though it alone were liable for the entire amount of the judgment. [Citation.] Thus, the only permissible consideration in evaluating the reasonableness of the settlement offer becomes whether, in light of the victim’s injuries and the probable liability of the insured, the ultimate judgment is likely to exceed the amount of the settlement offer. Such factors as the limits imposed by the policy, a desire to reduce the amount of future settlements, or a belief that the policy does not provide coverage, should not affect a decision as to whether the settlement offer in question [*90] is a reasonable one.” (Id. at p. 16.)
“An insurer that breaches its duty of reasonable settlement is liable for all the insured’s damages proximately caused by the breach, regardless of policy limits. [Citations.] Where the underlying action has proceeded to trial and a judgment in excess of the policy limits has been entered against the insured, the insurer is ordinarily liable to its insured for the entire amount of that judgment [citations], excluding any punitive damages awarded.” (Hamilton v. Maryland Casualty Co. (2002) 27 Cal.4th 718, 725.)
In determining whether Scottsdale must contribute an equitable share of the excess judgment, the trial court must decide whether Scottsdale breached its duty to the Wend defendants to accept a reasonable settlement offer. The trial court found Scottsdale had a duty to defend and indemnify the Wend defendants. Nonetheless, it denied coverage. Scottsdale concedes the liability of the Wends to Cole was never seriously in dispute. There was evidence California Capital forwarded to Scottsdale the July 24, 2008, letter from Cole’s counsel making a $500,000 settlement demand, along with California Capital’s request that Scottsdale participate in the defense and indemnity of the Wend defendants. The letter from Cole’s [*91] counsel asserted Cole’s special damages at that time exceeded $8 million. Scottsdale admittedly had $235,000 remaining of its policy limits after its settlement on behalf of Joe’s Trucking and the owner of the trailers. A representative of California Capital testified at trial that, if Scottsdale had expressed interest in contributing to the settlement or had contributed its remaining limits, California Capital would have contributed also, and the Cole case might have settled. Thus, there was evidence Scottsdale may have had an opportunity to settle, or contribute to settling, the underlying litigation. Under the circumstances, in order to determine whether Scottsdale is required to contribute to payment of the excess judgment, the trial court must determine whether Scottsdale had an opportunity to enter into a reasonable settlement, whether it failed to do so, whether its failure to do so, if any, constituted a breach of Scottsdale’s duty to accept a reasonable settlement offer on behalf of its insureds, and whether its failure to do so was a proximate cause of the excess judgment. On remand, the trial court must determine these issues.
Various factors may be considered in apportioning [*92] the loss between the two insurers. “‘Because equitable considerations vary, our Supreme Court [citation] has declined to formulate a definitive rule for when contribution should be compelled between insurers.’ [Citation.] But in determining whether one insurer is entitled to contribution from another, courts should consider the nature of the claim, the relation of the insured to the insurers, the particulars of each policy, and any other equitable considerations.” (OneBeacon, supra, 175 Cal.App.4th at p. 199, citing Signal Companies, Inc. v. Harbor Ins. Co. (1980) 27 Cal.3d 359, 369.) “[C]ourts have prorated the responsibility by focusing on contractual issues rather than on ‘fault’ concepts [citations], and have ordered proration based on the proportion each insurer’s coverage bore to the total coverage provided by all policies.” (Hartford Acc. & Indem., supra, 29 Cal.App.4th at p. 440.)
In this case, the factors to consider in apportioning the loss would include the nature of the two policies providing coverage for the loss, the scope of the risks they were intended to cover, and the facts surrounding the loss. The two insurers issued different types of policies, covering different risks. One was an automobile policy, covering use of the trailers. The other policy covered losses occurring on or near the insureds’ premises in the course of its farming [*93] operations, which included the loss arising out of the grape harvesting operation. The trial court may consider how each policy applied to the loss, in light of the particular facts of the accident. The trial court may also consider the policy limits of both policies, and any other relevant factors related to the policies and their coverages.
“An insurer can recover equitable contribution only when that insurer has paid more than its fair share.” (Century, supra, 182 Cal.App.4th at p. 1036.) The trial court concluded California Capital did not pay more than its fair share of the loss. But the trial court found both insurers had an obligation to indemnify the Wend defendants for the judgment in the Cole action. California Capital demonstrated it paid the entire amount necessary to satisfy the judgment against the Wend defendants. Scottsdale paid nothing. Necessarily, California Capital paid more than its fair share of the loss. (See St. Paul, supra, 210 Cal.App.4th at p. 662.)
Because the trial court considered inappropriate factors in determining the allocation of the loss between the two insurers, and failed to consider relevant factors, we conclude it abused its discretion in allocating the entire loss to California Capital. We must reverse and remand the matter to [*94] the trial court for a redetermination of that issue.

DISPOSITION
The judgment is reversed and the matter is remanded to the trial court for a redetermination of the allocation between the insurers of the amount paid by California Capital to satisfy the judgment in the Cole action. The trial court is to exercise its discretion, applying principles of equitable contribution in accordance with this opinion. In all other respects, the judgment is affirmed. California Capital is entitled to its costs on appeal.
HILL, P. J.
WE CONCUR:
LEVY, J.
DETJEN, J.

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