Nede Mgmt., Inc. v. Aspen American Ins. Co.

BACKGROUND

We take the facts from the operative SAC, which we assume are true. (Centex Homes v. St. Paul Fire & Marine Ins. Co. (2015) 237 Cal.App.4th 23, 26 (Centex Homes I).) We also assume the numerous attachments to the complaint are true, and they take precedence over any conflicting allegations in the SAC. (Brakke v. Economic Concepts, Inc. (2013) 213 Cal.App.4th 761, 767.) Allegations On July 4, 2015, a fire occurred on a property covered by the insurance policy at issue. A squatter died. Two tenants, two surviving squatters, and the estate of the deceased squatter sued the Darwish family and their corporate entities, including Nede. The lawsuit alleged claims for wrongful death, negligence, premises liability, and conversion (the Hall action). David and Barbara tendered their defense in the Hall action to D&H and Aspen. D&H assumed control of the action and hired attorney Gary Fields as counsel for the Darwish family. Fields’ representation was subject to two reservations of rights: Aspen would not pay any judgment exceeding the $1 million policy limit and would not pay punitive damages. The Darwish family alleged Fields “failed and refused to properly defend” them,…