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Prescott Companies, Inc. v. Mt. Vernon Fire Insurance Co.

April 14, 2010

PRESCOTT COMPANIES, INC., PLAINTIFF,
v.
MT. VERNON FIRE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING MOTION TO DISMISS

Defendant Mount Vernon Fire Insurance Company ("Defendant" or "Mount Vernon") has filed a motion to dismiss the First Amended Complaint ("FAC") for failure to state a claim upon which relief can be granted. For the reasons discussed below, Defendant's motion is GRANTED.

I. FACTUAL BACKGROUND

On September 15, 2005, Prescott Companies, Inc. ("Prescott") entered into a commercial lease of premises located at 5966 La Place Court, Suite 170 in Carlsbad, California. (FAC ¶ 4.) The lessor was Property Acquisition Partners LP. (Id.) Cognac Campus LLC ("Cognac") succeeded to Property Acquisitions Partners LP's interest in the property and lease. (Id.)

Mount Vernon issued a CGL policy of insurance (the "Policy") to Prescott for a twelve- month term commencing on July 1, 2006. (Ex. 3 to FAC.) Cognac is named as an additional insured pursuant to an additional insured endorsement. On April 20, 2007, Linda A. Mayer, an employee of Prescott, slipped and fell while on the premises.

In August 2007, Mayer filed a workers' compensation claim with the Workers' Compensation Appeals Board ("WCAB"), alleging that she sustained injury arising out of and in the course of employment as a result of a slip and fall at the place of her employment. (Def. RJN, Ex. A.) In March 2008, Prescott and its insurance carrier, Zenith Insurance Company, settled Mayer's claim for the sum of $35,000 (in addition to $14,424.33 in medical expenses previously paid). (WCAB Order Approving Compromise and Release, Def. RJN, EX B.)*fn1

On June 23, 2008, Mayer filed a personal-injury lawsuit (the "Underlying Action") against Cognac in the San Diego Superior Court. (Mayer Compl., Ex. 4 to FAC.) Mayer alleged that she was walking on the finished stone walkway just outside the main entrance doors to Prescott when she fell because the walkway was wet and slick. (Mayer Compl. ¶¶ 12-13.)*fn2 Mayer alleged that she "was on said premises as a requirement of her employment when the INCIDENT giving rise to this action occurred." (Mayer Compl. ¶ 24.) As a result of the fall, Mayer suffered injuries to her lower back, hip, and arm. (Mayer Compl. ¶ 13.)

Mayer asserted claims of negligence and premises liability against Cognac.

On or about February 2, 2009, Cognac tendered its defense in the Underlying Action to Mount Vernon as an additional insured. (FAC ¶ 8.) Cognac also requested that Prescott defend and indemnify Cognac pursuant to the terms of the lease.

On February 6, 2009, Cognac filed a cross-complaint against Prescott for express, implied, and equitable indemnity, breach of contract, contribution and declaratory relief. (Def. RJN, Ex. C.) Prescott requested that Mount Vernon defend it against Cognac's cross-complaint.

Mount Vernon declined coverage and refused to defend Cognac and Prescott in the Underlying Action. (FAC ¶¶ 10-11, 18-20.)

On December 22, 2009, Cognac and Prescott settled the Underlying Action with Mayer. (FAC ¶ 21.) Pursuant to the settlement, Cognac paid Mayer $150,000 ($125,000 of which was from its insurer, Hartford) and Prescott paid Mayer $25,000. (Id.) On December 29, 2009, Prescott received an assignment of claims from Cognac and Hartford. (FAC ¶ 22.)

In the FAC, Prescott asserts claims on behalf of itself, Cognac, and Hartford. The FAC asserts the following seven causes of action: (1) breach of contract (brought by Prescott); (2) breach of contract (brought by Prescott as assignee of Cognac); (3) equitable contribution; (4) equitable subrogation; (5) breach of third party contract; (6) ...


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