Scottsdale Insurance v. Essex Insurance

This is an action for declaratory relief and equitable contribution between insurance carriers for a common insured. After a bench trial the court determined that plaintiff Scottsdale Insurance Company (Scottsdale) properly paid $225,000 to settle prelitigation claims made against the mutual insured, James Conrad Construction, Inc., arising from the construction of a house purchased by Robert Opera and his wife, Sandra Opera. The trial court required defendant Essex Insurance Company (Essex) to reimburse Scottsdale in the amount of $148,026.32. Essex appeals, arguing the trial court misapplied the law of equitable contribution and erroneously found the claim covered by its policy and gave Scottsdale an excessive judgment.

Background

A. The House

James Conrad, a licensed architect and general contractor, built a large single-family home in Laguna Beach. Conrad’s financial partner in the project was Robert Boris. Title to the property to be developed was held in Boris’s name. The application for the building permit identified Boris as the owner and Conrad as the builder. Boris was not involved with the physical construction of the home. The final inspection was completed…