San Diego Housing Commission v. Industrial Indemnity Co.

This action by plaintiffs and respondents San Diego Housing Commission and San Diego Housing Authority (collectively, Housing; respectively, the Commission and the Authority) against insurer Industrial Indemnity Company (DC) arose out of an underlying default judgment for damages for construction defects that Housing obtained against John B. Reed Construction Co. (JBR), whom IIC insured under a liability policy. (San Diego Housing Authority v. John B. Reed Construction Co. (Super. Ct. San Diego County, 1992, No. 651235) (the underlying action).) In 1983 through 1984, JBR was the general contractor for a low-income housing project, Calle Primera (the project), built for the Commission on land owned by the Authority, and funded by the federal Department of Housing and Urban Development (HUD). As the property owner where the project was built, Housing was an additional insured on JBR’s liability policy issued hyllC.

The project was completed and inspected by officials of the City of San Diego (City) and HUD in March and April 1984; tenants began moving in beginning April 4, 1984. Beginning in 1989 and 1990, tenants made complaints to Housing concerning problems with the…