St. Paul Mercury Insurance v. Mountain West Farm Bureau Mutual Insurance

INTRODUCTION

St. Paul Mercury Insurance Company (St. Paul Mercury), the general liability insurer for the general contractor, sought equitable contribution from Mountain West Farm Bureau Mutual Insurance Company (Mountain West), the insurer for the framing subcontractor, based on an additional insured endorsement in Mountain West’s policy naming the general contractor. The trial court ruled in favor of St. Paul Mercury and ordered Mountain West to contribute $2,087,171.50, plus interest in the amount of $372,731.73, to the *650 defense and settlement costs St. Paul Mercury incurred in the underlying construction defect litigation.

Mountain West’s entire appeal is shaped by its view that it participated in the defense of its additional insured by paying into the settlement of the underlying construction defect action on behalf of its insured (the framing subcontractor). Yet, Mountain West admitted it owed a duty to defend its additional insured (the general contractor) but did not provide a defense. Consequently, the shifting burdens under Safeco Ins. Co. of America v. Superior Court (2006) 140 Cal.App.4th 874 [ 44 Cal.Rptr.3d 841 ] (Safeco) apply to this equitable…