Royal Surplus Lines Insurance v. Ranger Insurance

Plaintiff Royal Surplus Lines Insurance Company, Inc. (Royal) and its insured, plaintiff 1915 Ocean Front Walk, LLC (Ocean), appeal from a judgment entered after the court sustained the demurrer of defendant Ranger Insurance Company (Ranger). Plaintiffs contend the court erred when it sustained the demurrer on the basis plaintiffs could not sue an insured and its insurer in the same action. We agree with plaintiffs and reverse and remand.

Factual and Procedural Synopsis

Ocean is the owner of a residential apartment complex located in the City of Santa Monica. Royal was the general liability insurance carrier of Ocean at all relevant times, but excess to any additional insurance.

In May 1998, Ocean commenced a large-scale construction project on the apartment complex. The project was intended to refurbish and improve the property as well as bring it into compliance with local and state building codes. Calstar Management, Inc., was the general contractor. Ocean contracted with various subcontractors to perform work on the project.

On August 4, Ocean entered into a written contract (the Agreement) with Ultimate Construction (Ultimate) to perform construction work,…