Glenbrook Homeowners Assoc. v. Scottsdale Ins. Co.

MEMORANDUM AND ORDER

On September 14, 1988, Glenbrook Homeowners Association (“Glenbrook”) filed a complaint in Sonoma County Superior Court against X-L Homes (“X-L”), Firestone Development (“Firestone”), and others, alleging negligence, fraud, breach of warranty, breach of contract, and strict liability in connection with development of the Glenbrook condominium project. X-L tendered the defense of the action to all five of its insurance carriers, and four carriers accepted the tender of defense (“Carriers”). The fifth insurance carrier, Scottsdale Insurance Company (“Scottsdale”), refused to defend X-L after determining that the alleged damages were the result of a joint venture between X-L and Firestone, and therefore were not covered due to a joint venture exclusion clause in the Scottsdale policy.

Firestone and the other defendants in the Sonoma County action settled with Glen-brook, but X-L did-not. On December 4, 1992, written notice of a December 22 trial date was sent to Scottsdale. On December 22, 1992, the claims against X-L were tried on the short cause calendar. The parties announced that they had narrowed the issues through extensive discovery, and the trial…