Barratt American, Inc. v. Transcontinental Insurance

A residential developer, Barratt American, Inc. (Barratt), sued its insurer, Transcontinental Insurance Company (Transcontinental), alleging Transcontinental failed to provide it with a defense in an underlying construction defect lawsuit. At trial, it was undisputed that Transcontinental owed Barratt a duty to defend. The primary issue for the jury was whether costs Barratt incurred to repair homes owned by individuals who did not join the underlying construction defect lawsuit qualified as recoverable defense costs. After a lengthy trial, the jury found the costs were recoverable defense costs, and Barratt was not barred from recovering the costs by having failed to obtain Transcontinental ’ s consent to incur them. The court awarded Barratt $580,714.50, with a credit of $19,649.84.

Both parties appeal. Transcontinental contends: (1) the claimed defense costs are not recoverable as a matter of law; (2) insufficient evidence supports the judgment as to the existence and amount of the defense costs; (3) the court erroneously instructed the jury on defense cost issues; and (4) the court erred in failing to reduce the judgment amount to reflect Transcontinental’s share of…