Bank Of The Orient v. Superior Court

67 Cal.App.3d 588 (1977)

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Nature of the Case

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Facts

This case arises out of the embezzlement by Quailand Tom, former manager of the Chinatown branch of the San Francisco Federal Savings and Loan Association (P). Tom made unauthorized withdrawals from savings accounts by forging the signatures of savings customers on savings withdrawal applications and directing employees to issue and sign checks drawn on his employer's general operating account at Crocker National Bank for the amounts of such unauthorized savings withdrawals. Tom then caused the checks to be made payable to the order of D. Tom then deposited these checks in a personal checking account which he maintained with D and subsequently withdrew the entire amount. P was insured by St. Paul Fire and Marine Insurance Company. St. Paul paid to P the sum of $449,829.27. St. Paul paid another sum of $124,082.48 to P and St. Paul obtained a release in full. P assigned to St. Paul all of its claims and demands against any other party, person, or corporation arising from or connected with said loss. P then instituted an action against D, alleging that D converted funds of P and that because of D's negligence Tom was able to accomplish his thefts, resulting in damage to P. During discovery D discovered that St. Paul had paid the loss and had taken an assignment of the claims of P. D noticed a motion for an order that P be compelled to join St. Paul as a party plaintiff and for an order that D be given leave to amend its answer and to file a cross-complaint against the joined party plaintiff. D submitted a cross-complaint for declaratory relief, offset and damages against P, as cross-defendant, alleging that D, was a party to an insurance agreement with St. Paul, which insured the D against claims for property damage, D was only granted permission to amend its answer. The court had already denied D's motion for an order compelling production of the documents. D filed this writ. D contends that the trial court abused its discretion in not requiring the joinder of St. Paul as a party plaintiff. D claims that St. Paul is a real party in interest whose presence is indispensable to the determination of the liabilities alleged in the complaint. D posits that because St. Paul possessed the assigned interest of P when the action was initiated and that the law precludes this ruse,