United States District Court, N.D. California
ORDER REGARDING MOTIONS FOR SUMMARY JUDGMENT
WILLIAM H. ORRICK, UNITED STATES DISTRICT JUDGE
Westchester Surplus Lines Insurance Co.
(“Westchester”) brings an action against
defendant Liberty Mutual Insurance Co. (“Liberty
Mutual”) for equitable contribution stemming from
Westchester's defense and indemnity of Tractel, Inc.
(“Tractel”) following an accident occurring on
August 4, 2011 at a residential building located at 300 Berry
Street in San Francisco, California. Westchester, which
insured Tractel as part of a “wrap up” insurance
program, argues that it is entitled to equitable contribution
from Liberty Mutual because both parties previously issued a
primary insurance policy to Tractel, while Liberty Mutual
contends that its policy carves out coverage when a wrap up
insurance program applies and that it had no obligation,
equitable or otherwise, to defend Tractel in that
circumstance. Both parties moved for summary judgment. For
the reasons discussed below, Westchester is not entitled to
equitable contribution from Liberty Mutual. I grant Liberty
Mutual's motion and deny Westchester's.
The Owner Controlled Insurance Program
2006, Arterra Mission Bay, LLC began work on the construction
of 268 mid-level condominiums and townhome units in the
Mission Bay area of San Francisco (the “Arterra
Project”). See Declaration of Nancy Adams
(“Adams Decl.”), Ex. 1, Tractel/Bovis
Subcontract, at Ex. B.1 at 1 (Dkt. No. 35-1). As a part of
the Arterra Project, the owner created an owner controlled
insurance program (“OCIP”) in order to provide
insurance coverage to contractors working on the project.
See Adams Decl., Ex. 2, OCIP Manual at 5 (Dkt. No.
35-2). Enrollment and participation in the OCIP were
mandatory for all the contractors working on the project.
Id. Westchester issued the wrap up insurance policy,
providing primary general liability coverage under the OCIP.
See Adams Decl., Ex. 3, Westchester Policy at
Endorsement No. 1 (ECF p. 7) (Dkt. No. 35-3).
was awarded a subcontract with Bovis Lend Lease as a part of
the Arterra Project, related to the construction and
installation of the Exterior Building Maintenance System that
facilitates window washing and other exterior building
maintenance. See Adams Decl., Ex. 1, Tractel/Bovis
Subcontract, at 1, Ex. B.1 at 2 (Dkt. No. 35-1). The
Tractel/Bovis Subcontract incorporates the OCIP Manual by
reference. See id. at 15 (listing “Exhibit C.1
(Wrap-Up Manual)” as a contract document). Even though
Tractel was already insured by Liberty Mutual, per the terms
of the subcontract Tractel was obligated to enroll in the
OCIP and pay premiums to Westchester, which it did.
See Adams Decl., Ex. 4, Lockton Insurance Brokers
OCIP Enrollment Spreadsheet (Dkt. No. 35-4) (listing Tractel
as an “enrolled contractor”).
The Westchester Policy
issued a general liability policy to Mission Bay LLC,
effective from May 1, 2006 to March 1, 2009. Corona Decl.,
Ex. 3, Westchester Policy (Dkt. No. 32-6). By endorsement,
Mission Bay LLC and “all subcontractors that are
enrolled in the [OCIP]” were the “Named
Insured” for the Westchester policy. Id.
¶ 12; Adams Decl., Ex. 3, Westchester Policy at
Endorsement No. 1 (ECF p. 7).
to this action, the Westchester Policy contains an
“Other Insurance” provision that states:
4. Other Insurance
If other valid and collectible insurance is available to
the insured for a loss we cover under Coverages A or B of
this Coverage Part, our obligations are limited as follows:
a. Primary Insurance
This insurance is primary except when b. below applies. If
this insurance is primary, our obligations are not affected
unless any of the other insurance is also primary. Then, we
will share with all that other insurance by the method
described in c. below.
b. Excess Insurance
This insurance is excess over:
(1) Any of the other insurance, whether primary, excess,
contingent or on any other basis:
(a) That is Fire, Extended Coverage, Builder's Risk,
Installation Risk or similar coverage for “your
work”. . .;
(2) Any other primary insurance available to you covering
liability for damages arising out of the premises or
operations for which you have been added as an additional
insured by attachment of an endorsement.
c. Method of Sharing
If all of the other insurance permits contribution by
equal shares, we will follow this method unless the insured
is required by contract to provide insurance that is primary
and non-contributory, and the “insured contract”
is executed prior to any loss. Where required by a contract,
this insurance will be primary only when and to the extent as
required by that contract. However, under the contributory
approach each insurer contributes equal amounts until it has
paid its applicable limit of insurance or none of the loss
remains, whichever comes first. If any of the other insurance
does not permit ...