Travelers Casualty & Surety Co. v. Transcontinental Insurance

INTRODUCTION

Federal Insurance Company (Federal) issued an “excess” insurance policy to a real estate developer. The policy provided for a defense to the developer upon the exhaustion of a specific policy, which the parties agreed had been exhausted. The developer was also named as an “additional insured” on insurance policies issued to subcontractors working on the developer’s project. The developer was sued for construction defects on the project. After paying a portion of the cost to defend the developer, Federal sought a judicial declaration that it did not have a duty to defend because the subcontractors’ insurance was unexhausted “primary” insurance. The trial court granted Federal’s motion for summary adjudication, ruling that Federal did not have a duty to defend and was entitled to reimbursement of its defense costs. Based in part on this ruling, the court subsequently granted Federal’s motion for summary judgment and entered judgment for Federal in the amount of $203,245.85, plus costs.

Appellants Transcontinental Insurance Company, Continental Insurance Company, and Valley Forge Insurance Company (collectively CNA) challenge the trial court’s order granting…