The Travelers Indemnity Company Of Connecticut v. Navigators Specialty Insurance Company

• Published date: 03 January 2022
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Trials & Appeals & Compensation
• Law Firm: Lewis Brisbois Bisgaard & Smith LLP
• Author: Mr Michael Velladao

Insurer Properly Alleged Claims for Equitable Indemnity and Equitable Contribution Against Other Insurers That Failed to Pay Defense Costs Incurred in Construction Defect Lawsuit

(December 2021) - In Travelers Indem. Co. of Conn. v. Navigators Specialty Ins. Co., 70 Cal.App.5th 341 (October 15, 2021), the California Fourth District Court of Appeal reversed the trial court's order dismissing a lawsuit filed by Travelers alleging causes of action for declaratory relief, equitable contribution, and equitable indemnity against Navigators Specialty Insurance Company (("Navigators") and Mt. Hawley Insurance Company ("Mt. Hawley"). The parties' dispute arose out of Travelers' defense of a general contractor as an additional insured in a construction defect lawsuit. Travelers later amended its complaint to allege that coverage was never owed to the general contractor under its policy in the first instance. Travelers contended that Navigators was required to share in the defense of the general contractor on the same basis as Travelers as its policy made the general contractor an additional insured as well. In addition, because Mt. Hawley insured the general contractor directly, it too was required to share in the cost of defending the lawsuit. Alternatively, Travelers argued that it was entitled to equitable indemnity from Navigators and Mt. Hawley for all the defense costs that it had paid on behalf of the general contractor because coverage was not afforded under the Travelers policy.

In response to the Travelers lawsuit, Navigators filed a demurrer and argued that Travelers could not seek declaratory relief because the underlying lawsuit had ended and Travelers was no longer paying for the defense of the lawsuit. Navigators also argued that Travelers was not entitled to equitable contribution because it contended that coverage was not afforded under its policy. Lastly, Navigators argued that Travelers was not entitled to equitable indemnity because such remedy was not afforded for reimbursement of defense costs.

Mt. Hawley also filed a demurrer based on a request for the trial court to take judicial notice of the Travelers and Mt. Hawley policies. According to Mt. Hawley, the language of the Travelers and Mt. Hawley policies required Travelers to afford primary coverage to the general contractor while the Mt. Hawley policy afforded excess coverage. Alternatively, Mt. Hawley adopted Navigators' arguments as the basis for dismissing the Travelers lawsuit.

The...