Pines of La Jolla Homeowners Ass'n v. Industrial Indemnity

This case presents the narrow issue of whether an insurer may rely on a clause in its insurance policy (the so-called “other insurance” clause) to escape liability for damages which may have occurred during its policy period, merely because a second insurer in fact paid such damages as part of a settlement on behalf of the insured. We conclude, on the facts presented here, that mere payment of settlement proceeds by the second insurer did not constitute that insurer’s binding admission of its liability for all claims presented in the lawsuit, and hence summary judgment based on the “other insurance” clause was inappropriate. We therefore reverse.

Factual and Procedural Background

I. The Project

The facts, construed most strongly in favor of appellant, reflect that between 1979 and 1984, a 247-unit condominium project known as “Pines of La Jolla” was developed. A&A Construction Company, Inc., and Augusto Angelucci (hereinafter insureds) were involved in developing the project.

II. The Insurance Policies

The insureds had five different insurers during the relevant time period, only two of which are germane to our analysis. For the period of April 26, 1981, through…