Clarendon America Insurance v. North American Capacity Insurance

I. INTRODUCTION

Eagle Ranch Residential, LLC, doing business as Tanamera Homes and Resort Communities, LLC (Tanamera), constructed a residential development in Victorville known as Shenandoah at Eagle Ranch (Eagle Ranch). Clarendon America Insurance Company (Clarendon) and North American Capacity Insurance Company (NAC), the parties to the present action, insured Tanamera under separate and consecutive general commercial liability policies.

In the present action, Clarendon sued NAC for declaratory relief, equitable contribution, and partial equitable indemnity, seeking a proportionate or equitable share of sums Clarendon expended to defend Tanamera in a construction defect action brought by the owners of 43 Eagle Ranch homes (the Bradley action). NAC moved for summary judgment on the ground its duty to defend Tanamera in the Bradley action never arose because Tanamera never paid a $25,000 “per claim” self-insured retention (SIR) for each home involved in the Bradley action and completed after November 30, 2002, the effective date of the NAC policy.

Only eight of the 43 homes involved in the Bradley action were completed after November 30, 2002. Thus, NAC argued it had…