Hollingsworth

INTRODUCTION

Plaintiffs and appellants Gary and Ivy Hollingsworth contracted with general contractor Baker Brothers Construction, Inc. (BBCI) to remodel their house. Dissatisfied with BBCI’s performance, plaintiffs “rescinded and terminated” the contract. BBCI brought an action against plaintiffs for breach of contract, quantum meruit, and unjust enrichment, and plaintiffs filed a cross-complaint against BBCI for negligence and breach of contract (BBCI Action). BBCI tendered the defense of the cross-complaint to its insurer, defendant and respondent Lincoln General Insurance Company (Lincoln), which denied a defense and indemnity to BBCI. Thereafter, BBCI and plaintiffs settled the BBCI Action, which settlement included BBCI’s assignment to plaintiffs of any claims or causes of action BBCI had against Lincoln or BBCI’s insurance broker, defendant and respondent Powers & Effler Insurance Brokers, Inc. (Powers), in connection with the disputed insurance coverage for the BBCI Action. Plaintiffs then brought an action against Lincoln for failing to defend and indemnify BBCI in the BBCI Action and against Powers for failing to procure for BBCI insurance that would have covered the…