McMillin Mgmt. Servs., L.P. v. Fin. Pac. Ins. Co.

*191 I.

INTRODUCTION

McMillin Management Services, L.P. and Imperial Valley Residential Valley Residential Builders, L.P. (collectively "McMillin") 1 filed this action against numerous insurance companies, including respondents Lexington Insurance Company (Lexington) and Financial Pacific Insurance Company (Financial Pacific). In its complaint, McMillin alleged that it had acted as a developer and general contractor of a residential development project in Brawley (the Project) and that it had hired various subcontractors to help construct the Project. As relevant to this appeal, McMillin alleged that Lexington and Financial Pacific breached their respective duties to defend McMillin in a construction defect action (underlying action) brought by homeowners within the Project. McMillin alleged that Lexington and Financial Pacific each owed a duty to defend McMillin in the underlying action pursuant to various comprehensive general liability (CGL) insurance policies issued to the subcontractors that named McMillin as an additional insured.

Whether an insurer owes an insured a duty to defend a third party's lawsuit depends, in the first instance, on a comparison of the allegations…