Canal Indemnity Company v. Adair Homes Inc

MEMORANDUM

In this insurance coverage dispute, Appellant Adair Homes, Inc. (Adair Homes), a construction company, was sued by Tammy and Daniel Pearson (the Pearsons) for the alleged defective construction of their residence. The Pearsons averred that water intrusion into their residence resulted in property damage and bodily injury stemming from mold exposure. Adair Homes tendered the lawsuit to its insurer, Appellee Canal Indemnity Co. (Canal), which filed a declaratory action regarding its duty to defend while providing a defense under a reservation of rights. Adair Homes challenges the district court’s grant of summary judgment in Canal’s favor based on the insurance policies’ exclusions.

In this declaratory judgment action, the district court properly granted summary judgment because Adair Homes failed to raise a material factual dispute regarding Canal’s duty to defend. See American Best Food, Inc. v. Alea London, Ltd., 168 Wash.2d 398 , 229 P.3d 693, 696 (2010) (en banc), as corrected (‘When the facts or the law affecting coverage is disputed, the insurer may defend under a reservation of rights until coverage is settled in a declaratory action.”) (citation omitted). Canal…