Sunday, December 1, 2013

Johnson v. Holmes Tuttle Lincoln-Mercury, Inc. case brief

Johnson v. Holmes Tuttle Lincoln-Mercury, Inc. case brief summary
325 P.2d 193 (1958)

Plaintiff injured parties brought an action for damages against defendant car dealership following an accident with the tortfeasor. The Superior Court of Los Angeles County (California) found that the dealership was liable to the injured parties as third party beneficiaries of an oral agreement between the dealership and the tortfeasor to procure liability insurance. The dealership appealed.

The injured parties claimed that the dealership had breached its agreement to obtain full coverage insurance for the tortfeasor in connection with the purchase of the tortfeasor's vehicle. A jury entered a verdict in favor of the injured parties on their claim.


  • The court held that the evidence was sufficient to support a finding that there was a meeting of the minds that the insurance was to include liability coverage. 
  • The court also found that the injured parties were third party beneficiaries of the agreement to procure the insurance. 
  • Cal. Ins. Code § 11580, incorporated into every general liability policy, created a contractual relation which inured to the benefit of injured third parties. 
  • Further, it was reasonable for the jury to infer that the tortfeasor, in making the agreement with the dealership, desired and intended that injured third parties were protected in the event of an accident with the newly purchased car.

The decision of the trial court was affirmed.

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