Narrative Opinion Summary
The case involves Pardee Construction Company's appeal against the district court's summary judgment in favor of Liberty Mutual Insurance Company regarding Liberty's duty to defend Pardee as an additional insured under a commercial general liability policy issued to Jasper Sons. The appellate court, exercising jurisdiction under 28 U.S.C. § 1291, reviewed the case de novo and found that the allegations in the homeowners' complaint and defects list triggered Liberty's duty to defend under California law. Initially, a Liberty claims adjuster acknowledged this duty, but later retracted it, which the court ruled only affected future obligations. The appellate court reversed the district court's summary judgment and remanded the case to establish when Liberty's duty to defend was extinguished and to determine damages for Liberty's failure to defend. The decision underscores that an insured can recover reasonable defense costs if the insurer breaches its duty to defend, although the ruling is not designated for publication and is subject to specific Ninth Circuit citation rules.
Legal Issues Addressed
Duty to Defend under Commercial General Liability Policysubscribe to see similar legal issues
Application: The appellate court determined that Liberty Mutual Insurance Company had a duty to defend Pardee Construction Company as an additional insured under the policy issued to Jasper Sons, based on the allegations in the complaint and defects list.
Reasoning: Pardee contends that the allegations in the homeowners' complaint from Summit Ridge and the defects list were sufficient to trigger Liberty's duty to defend.
Evaluation of Duty to Defendsubscribe to see similar legal issues
Application: The court applied California law, stating the insurer’s duty to defend is evaluated at the start of litigation by comparing the complaint's allegations with the policy terms, regardless of the ultimate outcome of the claims.
Reasoning: The evaluation of this duty occurs at the start of litigation by comparing the complaint's allegations with the policy terms.
Prospective Effect of Duty to Defendsubscribe to see similar legal issues
Application: Liberty Mutual's retraction of its initial acknowledgment to defend Pardee did not affect its duty to defend based on the facts known at the time of the complaint.
Reasoning: However, this change only prospectively affected Liberty's duty to defend, as the facts known at the time of the complaint still indicated potential coverage.
Recovery of Defense Costssubscribe to see similar legal issues
Application: The appellate court's decision to reverse and remand indicates that an insured may recover reasonable defense costs if the insurer breaches its duty to defend.
Reasoning: The ruling emphasizes that an insured can recover reasonable defense costs if an insurer breaches its duty to defend.