Blackhawk Corp. v. Gotham Ins. Co.

In this insurance coverage case, we are asked to decide whether subsidence exclusions apply to preclude coverage of defective lot claims by homeowners against the developer of unimproved lots. Also at issue is whether the work of the building contractors that constructed the residential units and site improvements is attributable to the lot developer on a strict liability theory, thereby entitling the developer to coverage for property damage due to concurrent causes. We resolve both questions against the insured developer and, accordingly, affirm the summary judgment in favor of the insurer.

I. Background

Blackhawk Corporation (Blackhawk) is the developer of Blackhawk community, an affluent, gated residential community in Danville, Contra Costa County. Throughout the past 20 years Blackhawk’s role has been to develop residential subdivisions and sell the residential lots to licensed building contractors. Blackhawk purchases the raw land; obtains necessary governmental approvals to subdivide the property; obtains a final subdivision map; and hires independent surveyors, engineers and contractors to design the subdivisions, plan lot layouts, conduct soils investigations…