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American Safety Indemnity Company v. National Union Fire Insurance Company of Pittsburgh

January 3, 2011

AMERICAN SAFETY INDEMNITY COMPANY,
PLAINTIFF,
v.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH,
DEFENDANT.



The opinion of the court was delivered by: Hon. Dana M. SABRAWUnited States District Judge

ORDER (1) GRANTING JUDGMENT AND (2) DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [Docket Nos. 19, 21] PLAINTIFF'S MOTION FOR PARTIAL SUMMARY

This matter comes before the Court on Plaintiff's motion for partial summary judgment and Defendant's motion for summary judgment. The motions are fully briefed and ready for disposition. For the reasons discussed below, the Court grants Plaintiff's motion and denies Defendant's motion.

I. BACKGROUND

Plaintiff American Safety Indemnity Company issued two commercial general liability insurance policies to grading contractor Signs & Pinnick, effective 11/01/01 to 11/01/02 and 11/01/02 to 11/01/03. (Joint Stipulation of Facts for Cross-Motions ¶1.) Defendant National Union Fire Insurance Company of Pittsburgh, PA issued a commercial general liability insurance policy to Signs & Pinnick, effective 11/01/03 to 11/01/04. (Id. ¶ 2.)

In 1999 and 2000, contractor Signs & Pinnick performed grading work on seven single family home building sites at the 4S Ranch residential development located on Lone Bluff Way in San Diego, California. (Id. ¶ 4.) On February 15, 2005, a lawsuit was filed in San Diego Superior Court against several defendants, including Signs & Pinnick, alleging construction defects at the 4S Ranch development. (Id. ¶ 5.)

In 2001 and 2002, Signs & Pinnick performed grading work at an apartment project called Casoleil in San Diego, California. (Id. ¶ 9.) On March 13, 2006, a lawsuit was filed in San Diego Superior Court against the general contractor of the Casoleil project alleging various construction defects. (Id. ¶ 10.) On November 29, 2006, the general contractor filed a cross-complaint against various subcontractors, including Signs & Pinnick. (Id. ¶ 11.)

Plaintiff defended Signs & Pinnick in the 4S Ranch litigation and the Casoleil litigation, and incurred fees and costs in doing so. (Id. ¶¶ 6, 8, 12, 14.) Defendant refused to defend Signs & Pinnick in either litigation pursuant to a full reservation of rights. (Id. ¶¶ 7, 13.)

On December 11, 2009, Plaintiff filed the present case against Defendant alleging claims for declaratory relief and equitable contribution. The present motions followed.

II. DISCUSSION

Both motions raise the issue of whether Defendant had a duty to defend Signs & Pinnick in the underlying state court actions. Plaintiff asserts Defendant had a duty to defend under the terms of its policy, while Defendant argues its policy explicitly negated that duty.

A. Standard of Review

Summary judgment is appropriate if there is no genuine issue as to any material fact, and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The moving party has the initial burden of demonstrating that summary judgment is proper. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). The moving party must identify the pleadings, depositions, affidavits, or other evidence that it "believes demonstrates the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "A material issue of fact is one that affects the outcome of the litigation and requires a trial to resolve the parties' differing versions of the truth." S.E.C. v. Seaboard Corp., 677 F.2d 1301, 1306 (9th Cir. 1982).

The burden then shifts to the opposing party to show that summary judgment is not appropriate. Celotex, 477 U.S. at 324. The opposing party's evidence is to be believed, and all justifiable inferences are to be drawn in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). However, to avoid summary judgment, the opposing party cannot rest solely on conclusory allegations. Berg v. Kincheloe, 794 F.2d 457, 459 (9th Cir. 1986). Instead, it must designate specific facts showing there is a genuine issue for trial. Id. See also Butler v. San Diego District Attorney's Office, 370 F.3d 956, 958 (9th Cir. 2004) (stating if defendant produces enough evidence to require plaintiff to go beyond pleadings, plaintiff must counter by producing ...


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