Collins Development Company v. Dj Plastering, Inc.

Summary

Cross-complainant and respondent Collins Development Company (Collins) was the developer of a large tract of condominium duplexes. Collins was sued by University Canyon West Homeowners Association (UCW), which represents-homeowners who purchased individual units in the development. UCW claimed the units suffered from a number of defects, including, in particular, defective stucco on the exterior of the units. UCW believed its members suffered a total of $9 million in damages.

UCW did not sue any subcontractors. However, Collins filed cross-complaints for contractual and equitable indemnity against 28 subcontractors. Collins eventually agreed to pay UCW a total of $5 million in cash. A number of subcontractors contributed approximately $1 million of the cash payment.

Under the settlement agreement, UCW released all of its claims against Collins, save those caused by alleged defective stucco. With respect to the stucco claims, Collins agreed that upon completion of litigation between itself and the stucco subcontractor, cross-defendant and appellant D. J. Plastering, Inc. (DJ), it would place $600,000 in an escrow account which would be released in whole or part,…