Procedural Posture

Procedural Posture

BUSINESS

Plaintiff insurer appealed a judgment of the Superior Court of Los Angeles County (California), which denied any recovery on its complaint for equitable contribution against defendant insurer regarding the settlement of a construction defect action brought against an insured general contractor.

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Overview

Both insurers issued primary commercial general liability policies to the insured general contractor for different time periods. Defendant also issued an excess policy. A contractors warranty endorsement provided that coverage would not apply to operations performed by independent contractors unless hold harmless agreements and certificates of insurance were provided. The insured failed to comply with the contractors warranty endorsement as to most of its subcontractors. The court held that substantial evidence supported a finding that the residence was put to its intended use, for purposes of completed operations coverage, on the date reflected in the notice of completion. The denial of recovery was proper because the contractors warranty endorsements were conspicuous, enforceable, and expressed preconditions to coverage. The excess policy was not triggered because there was no coverage under the primary policy for most of the claims. Although an expert’s testimony relied on hearsay and embraced the ultimate issue of each insurer’s percentage of relative responsibility, it was admissible pursuant to Evid. Code, §§ 801, subds. (a), (b), 805.

Outcome

The court affirmed the trial court’s judgment.