Advent, Inc. v. National Union Fire Insurance Co. of Pittsburgh
6 Cal. App. 5th 443
| Cal. Ct. App. | 2016Background
- Advent was general contractor for a Milpitas project; Pacific was its subcontractor and Pacific subcontracted Johnson to perform shotcrete work. Johnson employed injured worker Kielty.
- Kielty fell down an unguarded stairwell inside Building 70, sustained severe injuries, and sued Advent (but not Johnson); Advent tendered defense to various insurers.
- Landmark (primary for Advent) and Topa (Advent’s $5M excess) paid portions of a $10M settlement; National Union (Johnson’s insurer) paid $1M under its primary policy while reserving rights and denied coverage under its $15M excess policy.
- Topa intervened seeking declaratory relief, equitable contribution, and equitable subrogation against National Union, arguing Advent was an additional insured under National Union’s policies via the Pacific–Johnson subcontract.
- Trial court granted summary judgment for National Union and denied Topa’s summary judgment; on appeal the court affirmed, holding (1) no evidence Johnson (or those acting on its behalf) caused Kielty’s injury, and (2) Topa’s excess policy was specific-excess that applied before National Union’s general-excess policy.
Issues
| Issue | Topa (Plaintiff) Argument | National Union (Defendant) Argument | Held |
|---|---|---|---|
| Whether Advent is an additional insured under National Union’s excess policy (i.e., whether Pacific/Johnson subcontract required Johnson to add Advent) | Exhibit D and subcontract language incorporate Advent/Pacific insurance requirements, so Johnson was required to add Advent as additional insured, producing coverage under National Union’s policies | Pacific/Johnson does not reasonably incorporate Advent/Pacific insurance provisions; the subcontract contains no express insurance obligation to name Advent | Court did not need to decide incorporation; ruled Topa failed to show actual coverage because causation lacking, so National Union prevails |
| Whether Kielty’s injury was "caused by" Johnson or those acting on its behalf (threshold for additional-insured coverage) | Presence on site and being directed by a Johnson foreman to get plywood creates a reasonable inference Johnson contributed to injury | Undisputed facts show foreman sent Kielty outside; Kielty went inside for unknown reasons; no evidence Johnson controlled interior work or caused fall — speculation insufficient | Held for National Union: no admissible evidence Johnson or agents caused injury; speculation cannot defeat summary judgment |
| Burden of proof on contribution/coverage when settlor paid and nonparticipating insurer reserved rights | Topa contends showing potential for coverage suffices to shift burden to National Union to prove no coverage (citing Safeco) | National Union distinguishes Safeco but court applies burden logic: Topa must make prima facie showing of actual coverage; National Union may then meet its burden to show absence of coverage | Court: Topa needed to show potential for coverage to meet initial burden; National Union met its affirmative burden showing lack of causation, shifting burden to Topa, which failed |
| Priority among excess policies / effect of "other insurance" clauses | Topa argues its excess should contribute and that its policy language regarding “loss” does not make it subordinate to National Union | National Union’s excess is a general-excess that obligates payment only after exhaustion of scheduled underlying and other applicable insurance; Topa’s policy is specific-excess to Landmark primary, so Topa’s policy paid first | Held for National Union: policy language makes Topa a specific excess that attaches earlier; National Union’s general-excess obligation is subordinate, so no contribution required |
Key Cases Cited
- Safeco Ins. Co. of America v. Superior Court, 140 Cal.App.4th 874 (Cal. Ct. App.) (settling coinsurer need only show potential for coverage to meet initial burden; nonparticipating coinsurer must prove absence of coverage)
- St. Paul Fire & Marine Ins. Co. v. American Dynasty Surplus Lines Ins. Co., 101 Cal.App.4th 1038 (Cal. Ct. App.) (additional-insured/indemnity obligations limited to injuries causally related to subcontractor’s work and control)
- Carmel Development Co. v. RLI Ins. Co., 126 Cal.App.4th 502 (Cal. Ct. App.) (distinguishing specific-excess and general-excess policies and refusing proration where policy language shows different levels of excess)
- Fireman’s Fund Indemnity Co. v. Prudential Assurance Co., 192 Cal.App.2d 492 (Cal. Ct. App.) (policy definitions of "loss" are not substitutes for a clear "other insurance" clause)
- Aguilar v. Atlantic Richfield Co., 25 Cal.4th 826 (Cal.) (standard for prima facie showing on summary judgment)
- Guz v. Bechtel National, Inc., 24 Cal.4th 317 (Cal.) (defendant’s initial burden on summary judgment: negate essential element or show complete defense)