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San Diego Assemblers, Inc. v. Work Comp for Less Insurance Services, Inc.

California Court of Appeals, Fourth District, First Division

October 4, 2013

SAN DIEGO ASSEMBLERS, INC., Plaintiff and Appellant,
v.
WORK COMP FOR LESS INSURANCE SERVICES, INC., Defendant and Respondent.

Pub. order 10/28/13

APPEAL from a judgment of the Superior Court of San Diego County No. 37-2011-00051326- CU-PN-NC, Thomas P. Nugent, Judge.

Edwards & Hunter, Richard P. Edwards and Ellen E. Hunter for Plaintiff and Appellant.

Murchison & Cumming, Kenneth H. Moreno and Scott J. Loeding for Defendant and Respondent.

McCONNELL, P. J.

INTRODUCTION

San Diego Assemblers, Inc. (Assemblers) appeals from a judgment of dismissal following the court's granting of summary judgment in favor of Work Comp for Less Insurance Services, Inc. (Broker). Assemblers contends the court erroneously determined Broker had no duty to procure a liability insurance policy for Assemblers covering Assemblers's prior completed work. Assemblers additionally contends its claim is not barred by the superior equities doctrine or the statute of limitations. It also contends that, if Broker owed a duty to Assemblers, the court erroneously sustained Broker's objections to the declaration of Assemblers's standard of care expert.

We conclude Assemblers's claim is barred by the superior equities doctrine. We further conclude Broker owed no duty to procure prior completed work coverage for Assemblers. We, therefore, affirm the judgment.

BACKGROUND

Broker procures insurance for businesses. Assemblers was a remodeling contractor. In 2000, Assemblers contacted Broker seeking a basic liability policy. Assemblers told Broker the policy limits its clients required, but never described the types of coverage it wanted. Assemblers repeatedly told Broker to procure the least expensive policy. Broker procured policies and provided them to Assemblers's president, who read them. The president never had any questions for Broker after reading the policies and never asked for a different policy or different coverage. Assemblers never told Broker it did not want a policy with a manifestation endorsement or with a prior completed work exclusion. In addition, Broker never misrepresented any coverage contained in Assemblers's policies and never failed to obtain the coverage Assemblers requested.

In April 2004 Assemblers performed work for a restaurant. In July 2008 an explosion and resulting fire occurred at the restaurant, causing substantial property damage. The restaurant's insurer, Golden Eagle Insurance (Golden Eagle), paid for the damage under an insurance policy for which the restaurant paid premiums. Within a month of the fire, Golden Eagle began pursuing Assemblers to pay for the damage. Assemblers tendered Golden Eagle's claim to Lincoln General Insurance Company (Lincoln General), the insurer who provided liability insurance for Assemblers in 2004, and Preferred Contractors Insurance Company (Preferred), the insurer providing liability insurance for Assemblers in 2008.

In an October 14, 2008, telephone conversation, a Preferred claims specialist informed Assemblers's president that Assemblers's policy included a prior completed work exclusion. Assemblers's president indicated he was aware of the exclusion and that Lincoln General had also denied coverage. He told the claims specialist he had informed Golden Eagle he had no coverage for the loss and Golden Eagle was welcome to sue him.

Preferred denied coverage in writing on October 23, 2008, asserting a prior completed work exclusion. Lincoln General denied coverage on February 10, 2009, asserting a manifestation endorsement limiting coverage to injury or damage first manifested during the policy period.

After learning of the denial of coverage, Assemblers did not ask Broker why Broker had not obtained a different type of policy for Assemblers and Assemblers had no criticisms of Broker's failure to do so. Assemblers also did not ask Broker to change any of Assemblers's policies to include the coverages excluded by the ...


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