Colony Insurance v. Crusader Insurance

Both Colony Insurance Company (Colony) and Crusader Insurance Company (Crusader) insured a building in Los Angeles, which became the subject of a tenant lawsuit. In this case, Colony sought a declaration that Crusader improperly refused to defend the tenant lawsuit. Colony further sought an equitable share of defense costs incurred in defending the tenant litigation. In this appeal, Colony argues that Crusader failed to investigate public records as required by Crusader’s internal underwriting guidelines. As a result, according to Colony, Crusader waived the right to challenge misrepresentations made by its insured and was estopped from denying a defense in the tenant lawsuit based on the insured’s misrepresentations. Colony forfeited this argument by failing to raise it until after trial in its objections to the trial court’s statement of decision. Moreover, the argument fails on the merits, as Crusader’s internal guidelines, standing alone, created no enforceable rights on Colony’s part. Colony also argues but fails to show that Crusader engaged in improper postclaims underwriting. We affirm the judgment in favor of Crusader.

FACTUAL AND PROCEDURAL BACKGROUND

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