PMA CAPITAL INSURANCE COMPANY v. American Safety Indem. Co.

ORDER GRANTING DEFENDANT AMERICAN SAFETY INDEMNITY COMPANY’S MOTION FOR SUMMARY JUDGMENT, AND DENYING PLAINTIFF PMA CAPITAL INSURANCE COMPANY’S MOTION FOR SUMMARY JUDGMENT

Plaintiff PMA sued defendant ASIC for equitable contribution, attempting to recover over $1 million on the grounds that as a coinsurer, ASIC had a concurrent duty to defend a mutual insured. The lawsuit, which is before the Court on diversity jurisdiction, arises from a resolved construction defect case involving a mutual insured, J.W. McClenahan Company. From 1996 to 1998, McClenahan performed plumbing work as a subcontractor on the Embassy Suites project up in Lake Tahoe. Sunterra, who was the owner of the project, filed a lawsuit in bankruptcy court in Maryland. That got transferred out to the bankruptcy court here in the Eastern District of California as an adversary proceeding. Perini then named McClenahan, along with other subcontractors, as a cross-defendant. PMA has submitted evidence that they incurred $359,378 in defense fees and costs and contributed $1 million toward the settlement. ASIC declined coverage, stating no coverage existed because the “occurrence” did not happen during the policy…