JPA ADMINISTRATION AND COVERAGE CASES
Summaries provided by Doug Alliston of Murphy, Campbell, Alliston and Quinn McCarthy Bldg. Cos. v. Mt. Hawley Ins. Co. (C.D.Cal. 2021) 2021 U.S.Dist.LEXIS 35613 Summary: An agreement requiring that an additional insured endorsement be provided during the life of the agreement means the additional insured may be unprotected for completed operations. Discussion: Huntington Beach Union High School District contracted with McCarthy Building Companies, Inc. for management of various construction projects including the Huntington Beach High School Modernization project. The District entered into an agreement with Day Construction Company to complete the high school project. The agreement required Day during the life of the agreement to maintain a Commercial General Liability Insurance that provided contractual liability coverage, applied to completed operations, and named McCarthy as an additional insured. Day complied with this requirement while the project was ongoing. Five years after completion of the project, the District was sued by a woman who had tripped on a doorstop, and the District cross-complained against McCarthy and Day. Mt. Hawley, which insured Day at the time of the woman’s injury, initially agreed to defend McCarthy under its blanket additional insured endorsement, which made an additional insured of any party that the named insured (Day) was contractually required to have named as an additional insured. Mt. Hawley subsequently denied coverage on the basis that at the time of injury, the relevant contract was no longer in effect and there was no continuing obligation of Day to have McCarthy named as an additional insured. McCarthy sued Mt. Hawley and Mt. Hawley moved for summary judgment. The Court found the plain meaning of the phrase “life of this Agreement” to be until performance by both parties is complete. Accordingly, it concluded that Day was under no obligation to provide additional insured status at the time of the woman’s injury and that Mt. Hawley’s blanket additional insured endorsement did not apply.
Truck Ins. Exch. v. AMCO Ins. Co. (2020) 56 Cal. App. 5th 619 Summary: Landowner who is additional insured for injury arising out of tenant’s use of premises is covered without regard to tenant’s fault. Discussion: A car crashed into a restaurant injuring restaurant patrons. The patrons sued the restaurant operator and the building’s owner. There had been a prior similar accident at the site, which was unknown to the restaurant operator but known to the building’s owner. The owner had taken no steps to prevent a recurrence. Consequently, the restaurant operator was granted summary judgment, but the building’s owner was not. The owner’s insurer, Truck Insurance Exchange, then settled and sued the restaurant operator’s insurer, AMCO, for equitable subrogation, equitable indemnification, equitable contribution, and declaratory relief based on the additional insured endorsement issued by AMCO to the owner covering liability “arising out of ” the restaurant operator’s use of the premises. AMCO argued that because the restaurant operator was found not at fault in the accident, the owner’s liability did not arise out of the operator’s use of the premises. The trial court disagreed, finding the liability exposure clearly arose out of the use of the restaurant premises. AMCO appealed. The appellate court pointed out that the cases have consistently held that “arising out of ” does not indicate any particular standard of causation or theory of liability but broadly links a factual situation with the event creating liability, requiring no more than a minimal causal connection or incidental relationship. Accordingly, the appellate court found the additional insured endorsement applied and confirmed the judgment in favor of Truck Insurance Exchange.
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