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Allianz Insurance Co. v. Municipal Court
Citations: 126 Cal. App. 3d 1043; 179 Cal. Rptr. 334; 47 Cal. Comp. Cases 159; 1981 Cal. App. LEXIS 2495Docket: Civ. 51667
Court: California Court of Appeal; December 22, 1981; California; State Appellate Court
Allianz Insurance Company, a workers' compensation insurer, sought to file claims against third-party tortfeasors to recover benefits paid to injured workers. The Small Claims Court clerk refused to file these claims, prompting Allianz to petition for a writ of mandate in superior court to compel filing. The petition was denied, and the judgment favored the respondents. Allianz appealed, arguing that it was not an assignee under Code of Civil Procedure section 117.5, which restricts assignees from filing in small claims court. The court disagreed, affirming that Allianz qualifies as an assignee. The right for an insurer to sue a third-party tortfeasor is established by Labor Code sections 3850 and 3852, which define 'employer' to include insurers. Allianz contended it had an independent statutory cause of action, but the court referenced previous decisions indicating that such actions are rooted in equitable subrogation principles rather than a distinct cause of action. The findings concluded that the statutes merely codify existing judicial principles regarding employer and employee rights to recover against third parties. An employer can recover from a third party responsible for workers' compensation payments, even without legislative action. Case law, including De Cruz v. Reid and Western States etc. Co. v. Bayside L. Co., supports this principle. The California Supreme Court in Morris v. Standard Oil Co. noted that when an employer’s insurance carrier pays compensation, it is subrogated to the employer's rights, allowing it to enforce those rights directly. Subrogation is treated as an equitable assignment, as affirmed in Fifield Manor v. Finston and other cases. The court concluded that a subrogee qualifies as an "assignee" under Code of Civil Procedure section 117.5, barring them from filing claims in small claims court. The prohibition applies broadly to all assignees, not just those assigned for collection. The judgment was affirmed, and a petition for a Supreme Court hearing was denied. Notably, section 117.5 allows exceptions for bankruptcy trustees and certain conditional sales contract holders. The court found no need to address the argument regarding indispensable parties due to its decision on the main issue.