Carmel Development Co. v. RLI Insurance

This appeal arises from a dispute between excess insurers of comprehensive general liability. The trial court ruled that appellant RLI Insurance Company (RLI) and respondent Fireman’s Fund Insurance Company (Fireman’s Fund) insured the same risk and had competing “other insurance” clauses. It therefore ordered RLI to contribute to Fireman’s Fund’s settlement of a personal injury lawsuit against the insured.

On appeal, RLI contends that it was not obligated to contribute to the settlement on an equal basis with Fireman’s Fund because the insuring agreement in its policy made it excess to the coverage Fireman’s Fund provided. We find merit in RLI’s argument and must therefore reverse the judgment.

Background

The facts of the underlying lawsuit are undisputed and need be recounted only briefly. Carmel Development Company (Carmel) was the general contractor on a project to construct golf and residential facilities in Monterey County. For the concrete work Carmel subcontracted with Largo Concrete Company (Largo), which in turn subcontracted with CAB Concrete (CAB) for a portion of the work. On January 13, 1999, Abel Vargas, a CAB employee, was severely injured on the work…