Pacific Building Development v. Kensington-Fair Oaks Assocs. Joint Venture CA6

Background In early March of 2005 Kensington entered into a contract with the insured, Pacific Building Development Inc. (Pacific), for the reconstruction and repair of structural defects in the 186-unit apartment complex Kensington owned in Sunnyvale. In December 2005 Pacific stopped work on the project, claiming payments due for work already performed. Pacific filed suit against Kensington on January 25, 2006, for breach of contract and for the value of goods and services provided, which it estimated to be $700,000. Kensington filed a cross-complaint against Pacific for negligence in Pacific’s performance of the work, breach of contract for failing to perform and complete the work free of defects, and breach of a third-party contract between Pacific and its subcontractors. In September 2006 Pacific filed a separate cross-complaint for indemnity against several subcontractors, including Rojas Construction and its principal, 1 Rudy Rojas (collectively, Rojas). Rojas filed its own cross-complaint against Pacific for breach of contract in July 2008. Pacific was insured by Lincoln during the period of the project. Between June 11, 2004 and June 11, 2005 the liability policy covered…