Richmond

In this case we deal with the falling out between a homebuilder, Richmond American Homes of California, Inc., one of its subcontractors, Performance Plastering, and the subcontractor’s insurer, CalFarm Insurance Company.

The problems underlying this case began when Performance Plastering was suspended as a corporation and Richmond began receiving complaints of defective construction work done by Performance Plastering on some of Richmond’s homes. In an attempt to resolve liability, Richmond and Performance Plastering entered into the so-called El Niño settlement agreements, and Richmond and CalFarm entered into the so-called Air Design settlement agreement. The El Niño settlement agreements released Performance Plastering and its insurers from claims related to 65 homes in Elk Grove in exchange for Performance Plastering paying Richmond $57,000. The Air Design settlement agreement dismissed Performance Plastering from all claims, gave Performance Plastering a release of all claims identified on a “subcontractor allocation,” and obligated Richmond to give five business days’ notice to CalFarm “of any potential indemnity claims,” all in exchange for CalFarm’s paying…