Insurance Co. of North America v. National American Insurance Co.

This action involves a dispute over the allocation of liability between two insurance companies which had insured a single insured, Hacienda Roofing, Inc. (Hacienda). Appellant National American Insurance Company of California (NAICC) insured Hacienda under two liability policies covering the 1984-1985 and 1985-1986 periods. Those policies contained a “broad-form endorsement” expanding the types of coverage afforded Hacienda. Respondent Insurance Company of North America (INA) insured Hacienda under similar policies during succeeding years.

Hacienda was the roofing contractor on a condominium project. The roofs failed. In the ensuing construction defect lawsuit, the general contractor, Buie Corporation (Buie), was held liable to the homeowners association, and Hacienda was held liable (under a “Type I” indemnity agreement) to pay Buie’s liability to the homeowners association. INA paid the bulk of Hacienda’s liability to Buie. INA now seeks reimbursement from NAICC for NAICC’s alleged share of the liability.

The issue is whether Hacienda’s liability to Buie was covered by NAICC’s policy. NAICC asserts that a clause in its policy (the “work-performed” exclusion) excludes…