Defendants, consignment holders of lost jewelry that had belonged to plaintiffs

Procedural Posture

Defendants, consignment holders of lost jewelry that had belonged to plaintiffs, sought review of the judgment of the Superior Court of Los Angeles County, California, which rendered summary judgment in favor of plaintiffs in a suit brought by plaintiffs to recover the value of the lost jewelry. Plaintiffs' suit had been based on breach of a consignment memorandum that placed all risk of loss on defendants.

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Defendants held certain jewelry pursuant to a consignment agreement they had with plaintiff owners of the jewelry. Consignment memoranda placed the risk of loss from all hazards upon defendants until the return of the jewelry to plaintiffs. The jewelry was stolen from defendants while on a sales trip. The theft was not due to any fault or negligence on the part of defendants. Plaintiffs thereafter brought suit against defendants based on breach of the memorandum contract. Defendants argued in defense that plaintiffs had been fully reimbursed for their loss by plaintiffs' insurance company. Plaintiffs admitted that the suit was actually a subrogation claim asserted by plaintiffs' insurance company in the names of plaintiffs. The court found the subrogation suit to be proper because, once the insurer reimbursed plaintiffs for their loss, it thereby became subrogated to all of the rights of the plaintiffs in relation to the loss. The fact that the right based on the memorandum was a contractual one, rather than a right founded in tort, had no effect on the insurer's rights. Summary judgment was entered in favor of plaintiffs in the amount of damages prayed for.

Outcome

The summary judgment order was affirmed in all respects except as to the amount one plaintiff received. That amount was found to be more than the amount he had claimed to have sustained and was reformed to match the amount prayed for in the complaint. The fact that the suit was really a subrogation suit by plaintiffs' insurer had no effect.