Appeal from a judgment of the Superior Court of Orange County, Peter J. Polos, Judge. Affirmed. (Super. Ct. No. 30-2007-00100172- CU-IC-CJC).
The opinion of the court was delivered by: Fybel, J.
CERTIFIED FOR PUBLICATION
We hold, as a matter of first impression, the provision in a commercial general liability (CGL) insurance policy requiring the insurer to "defend the insured against any 'suit' seeking . . . damages" to which the insurance applies includes the duty to defend the insured in proceedings under the Calderon Act, Civil Code section 1375 et seq. (All further code references are to the Civil Code unless otherwise noted.) Because the trial court reached the same conclusion, we affirm the judgment.
The CGL policies in issue, as all standard CGL policies, define "suit" to mean "a civil proceeding in which damages . . . to which this insurance applies are alleged." The process prescribed by the Calderon Act (the Calderon Process) is a civil proceeding within this definition. The Calderon Act requires a common interest development association to satisfy certain dispute resolution requirements with respect to the builder, developer, or general contractor before the association may file a complaint in court for construction or design defects. (§ 1375, subd. (a).) Although the Calderon Process occurs before a complaint is filed and itself does not result in a judgment or court-ordered payment of money, the Calderon Process is an integral part of construction defect litigation initiated by a common interest development association.
FACTS AND PROCEDURAL HISTORY
Centex Homes (Centex) was the developer of a residential development in Simi Valley known as Westwood Ranch. In July 2006, the Westwood Ranch Homeowners Association, Inc., served a notice of commencement of legal proceedings pursuant to section 1375 et seq. (Calderon Notice) on Centex that set forth a list of alleged construction defects at Westwood Ranch.
WSM Transportation doing business as Sam Hill & Sons, Inc. (Sam Hill), was a subcontractor on the Westwood Ranch development. StarNet Insurance Company (StarNet) issued two successive policies of CGL insurance (the StarNet CGL policies) to Sam Hill effective from June 12, 2002 to June 12, 2004.
The StarNet CGL policies' insuring agreement provides: "[StarNet] 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 applies." The StarNet CGL policies' defense agreement provides: "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 does not apply. We may, at our discretion, investigate any 'occurrence' and settle any claim or 'suit' that may result."
The StarNet CGL policies define the word "suit" as follows: "'Suit' means a civil proceeding in which damages because of 'bodily injury[,'] 'property damage' or 'personal and advertising injury' to which this insurance applies are alleged. 'Suit' includes: [¶] a. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit with our consent; or [¶] b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured submits with our consent."
The StarNet CGL policies named Centex as an additional insured pursuant to the terms of the subcontract between Centex and Sam Hill.
Clarendon America Insurance Company (Clarendon) had issued a CGL insurance policy to another subcontractor, Ebensteiner Company. Centex was afforded coverage as an additional insured under the Clarendon CGL policy issued to Ebensteiner Company.
In December 2007, Centex filed a complaint against Clarendon seeking payment of defense fees and costs incurred in defending against the Calderon Notice. Clarendon filed a cross-complaint against the additional insurers, including StarNet, seeking a declaration they were obligated to provide Centex a defense and/or coverage. In the first amended cross-complaint, Clarendon sought indemnity, declaratory relief, and contribution from the ...