La Sound USA, Inc. v. St. Paul Fire & Marine Insurance
Opinion
Opinion
Ikola, J.
Plaintiffs LA Sound USA, Inc. (LA Sound), LSY Trading Development, Inc. (LSY), Ancle Hsu, and David Ji (collectively, plaintiffs) appeal from a judgment entered in favor of defendant St. Paul Fire & Marine Insurance Company (St. Paul) on plaintiffs’ complaint and St. Paul’s cross-complaint.
The court correctly entered judgment in favor of St. Paul on plaintiffs’ complaint for breach of an insurance policy issued by St. Paul. Plaintiffs contend St. Paul failed to pay all their defense and settlement costs in an underlying action. But LA Sound made material misrepresentations on the insurance application, entitling St. Paul to rescind the policy. Thus, St. Paul had no duty to defend or indemnify plaintiffs at all.
Similarly, the court correctly determined St. Paul was entitled to reimbursement of the defense and settlement costs it paid. But it erred in awarding judgment jointly and severally against all of its insureds. St. Paul failed to present evidence of the amount by which each of its insureds benefited from the defense and settlement costs it had advanced. Thus, we affirm in part, reverse in part, and remand with directions.