United States District Court, D. Nevada
NATIONAL FIRE & MARINE INSURANCE CO., a Nebraska Corporation, Plaintiff,
REDLAND INSURANCE COMPANY, a New Jersey Corporation, OCCIDENTAL FIRE & CASUALTY COMPANY OF NORTH CAROLINA, a North Carolina Corporation, and DOES 1 to 10, Defendants.
LARRY R. HICKS, District Judge.
Before the Court is Defendants Redland Insurance Company ("Redland") and Occidental Fire & Casualty Company of North Carolina's ("Occidental") (collectively "Defendants") Motion for Summary Judgment. Doc. #20. Plaintiff National Fire & Marine Insurance Co. ("National Fire") filed a Response (Doc. #22), to which Defendants replied (Doc. #23).
I. Factual Background
This case concerns an insurance coverage dispute between National Fire and Defendants regarding National Fire's alleged right to equitable contribution from Defendants for the defense fees and costs it incurred on behalf of Edward B. Campau, d.b.a. Southwest Carpentry ("Southwest Carpentry") in a lawsuit entitled Albanese v. Centex Homes, et al., Washoe County Court Case No. CV-07-02374 (the "Underlying Action"). National Fire alleges that Defendants also had a duty to defend Southwest Carpentry in the Underlying Action and, therefore, must share on a pro rata basis the $513, 216.24 defense expenses.
The Underlying Action involves claims for property damage arising out of construction defects to multiple homes in the Turtle Creek subdivision in Stead, Nevada. Doc. #1, ¶14; Doc. #20, p. 6. Centex Homes was the developer and general contractor for the Turtle Creek residential subdivision. Id. On August 1, 2001, Centex Homes retained Southwest Carpentry to provide framing services for the first phase of development. Doc. #1, ¶14; Doc. #20, Ex. 1. At the time, Southwest Carpentry was insured with Redland pursuant to a commercial liability policy effective January 1, 2001 to January 1, 2002. Doc. #1, ¶10; Doc. #20, Ex. 2. From January 1, 2002 to January 1, 2003, Southwest Carpentry was insured with Occidental under a similar commercial liability policy. Doc. #1, ¶11; Doc. #20, Ex. 4. Both Redland's and Occidental's policies contain the same coverage limitations:
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance policy applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance policy does not apply. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result.
b. This insurance applies to "bodily injury" and "property damage" only if:
(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory";
(2) The "bodily injury" or "property damage" occurs during the policy period.
Doc. #20, Ex. 2; Doc. #20, Ex. 4. "Property damage" is defined as:
a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it.
Id. "Occurrence" is defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." Id.
Following the expiration of Occidental's insurance policy, Southwest Carpentry was insured under a commercial liability policy issued by Underwriter's at Lloyd's of London and effective January 15, 2003 through October 23, 2003. Doc. #20, Ex. 5. That insurance carrier is not a party to this contribution action. On September 10, 2003, Centex Homes and Southwest Carpentry entered into a second subcontracting agreement, pursuant to which Southwest Carpentry was to continue providing framing services for the construction of the second phase of homes at Turtle Creek. Doc. #20, Ex. 6. From October 23, 2003 to October 23, 2004, Southwest Carpentry was insured under a commercial liability ...