Parkwoods Community Ass'n v. California Insurance Guarantee Ass'n

This action was brought by plaintiff Parkwoods Community Association (Parkwoods) following the settlement of its earlier construction defect action arising out of the construction of the Parkwoods condominium development in Oakland. Five of the subcontractor defendants in the earlier action (the Reliance Insureds) were insured by Reliance Insurance Company (Reliance), a Pennsylvania insurance company that was placed into liquidation, causing defendant California Insurance Guarantee Association (CIGA) to assume their defense. The prior action was resolved by a settlement in which the developer and general contractor paid Parkwoods an amount that exhausted their primary commercial general liability (CGL) coverage and included a contribution from their excess insurance carrier that did not exhaust the excess insurance limits. Parkwoods and CIGA agreed upon the amount that CIGA would pay Parkwoods if CIGA is required to pay the obligations of Reliance and the Reliance Insureds, and agreed that this declaratory relief action would be brought to resolve their dispute as to whether Parkwoods’s claim is a “covered claim” within the meaning of Insurance Code section 1063.1,…