Maryland Casualty Co. v. Bailey & Sons, Inc.

This appeal arises from the construction of the Villa Mallorcas condominium project (Project) in the late 1970’s. The ensuing construction defect litigation began in 1984 and continued in various forms over the next decade, culminating in this appeal. The remaining parties include appellant Maryland Casualty Company (Maryland), the primary liability insurer for the Project’s general contractor and owner (referred to as Kelly), and the respondents, three of the subcontractors on the Project: the masonry subcontractor Bailey & Sons, Inc. (Bailey), the framing subcontractor L&H Construction Company (L&H), and the architect Carl McLarand Associates (CMA) (collectively Subcontractors).

This appeal concerns (1) indemnity claims asserted by Maryland, acting as Kelly’s assignee, against each of the Subcontractors, seeking to recover $3.5 million paid to the Villa Mallorcas Homeowners Association; (2) breach of contract claims asserted by Maryland, as Kelly’s assignee, against Bailey and L&H; and (3) CMA’s express indemnity claim asserted against Maryland, as Kelly’s assignee, seeking to recover money paid in a settlement to Kelly’s excess insurer (Fireman’s Fund Insurance…