Collett

William D. Collett, a masonry contractor doing business as Reflective Designs, built a series of retaining walls for Dividend Development in connection with a residential development in San Juan Capistrano. The retaining walls failed, and Collett agreed to remove and rebuild them, up to a cost of $125,000, as a settlement of claims against him by Dividend Development. Collett claimed its insurer, Insurance Company of the West (ICW), had agreed to indemnify him for these costs under the property damage provisions of his commercial general liability policy. When ICW refused to do so, Collett sued it for breach of contract and breach of the covenant of good faith and fair dealing.

In a bifurcated proceeding, the court tried the issue of coverage and found the claim fell under the work completed exclusion. Collett claims the court erred because the inspector he hired failed to discover the defects in the wall. Collett asserts the inspector should be considered a “subcontractor,” thus bringing his claim under an exception to the work completed exclusion. We disagree and affirm.

Collett contracted with Dividend in May 1988 to build retaining walls for a residential…