{"id":900938,"date":"2023-03-14T15:16:34","date_gmt":"2023-03-14T21:16:34","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900938"},"modified":"2023-03-14T15:16:38","modified_gmt":"2023-03-14T21:16:38","slug":"no-duty-to-defend-policy-exclusion-applies","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/no-duty-to-defend-policy-exclusion-applies\/","title":{"rendered":"California Appeals Court Says No Duty to Defend Where Policy Exclusion Applies"},"content":{"rendered":"\n<p>Alex Purvis, Emily M. Ruzic and Amandeep S. Kahlon | <a href=\"https:\/\/www.buildsmartbradley.com\/2023\/03\/california-appeals-court-says-no-duty-to-defend-where-policy-exclusion-applies\/?utm_source=Bradley+Arant+Boult+Cummings+LLP+-+BuildSmart&amp;utm_campaign=892f97997d-RSS_EMAIL_CAMPAIGN&amp;utm_medium=email&amp;utm_term=0_b504caf31b-892f97997d-78863422\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Build Smart<\/a><\/p>\n\n\n\n<p>In\u00a0<em>Ali Heidari v. Golden Bear Insurance,\u00a0<\/em>a California appeals court recently affirmed a lower court\u2019s decision to deny relief under a\u00a0CGL policy, where the policy excluded from coverage work performed by subcontractors under the contractor\u2019s warranty exclusion. Specifically, the appellate court upheld the trial court\u2019s determination that the insurer did not have a <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/construction-defect-claims-duty-to-defend\/\" target=\"_blank\" rel=\"noreferrer noopener\">duty to defend<\/a> the insured. The case involved construction defect claims brought by a homeowner against a contractor for a residence in Monte Sereno, California.<\/p>\n\n\n\n<p>The warranty exclusion under the policy provided that coverage would not apply to occurrences arising out of operations performed by subcontractors. The initial complaint by the homeowner did not allege or disclose which entities completed the work on the property. When the contractor tendered its defense to its insurer, the insurer denied coverage based, in part, on the warranty exclusion.<\/p>\n\n\n\n<p>After the contractor and homeowner settled, the homeowner (as assignee of the contractor\u2019s claim) pursued a declaratory and bad faith action against the insurer. Evidence at trial included the contractor\u2019s application for insurance, which indicated that 90% of its work was to be performed by subcontractors and that \u201call trades are subbed out.\u201d The trial court was persuaded by the insurer\u2019s representative\u2019s testimony that she understood the application to mean that the contractor only provided supervision on the project. The actual work was all performed by subcontractors.<\/p>\n\n\n\n<p>Conversely, the court found the contractor\u2019s representative\u2019s contrary testimony was not credible. The judge reached this finding based on the representative\u2019s demeanor during his testimony and on the knowledge that the contractor had intentionally destroyed its project files after completing the project.<\/p>\n\n\n\n<p>In upholding the trial court\u2019s decision, the appellate court noted that the homeowner\u2019s initial complaint against the contractor did not establish any potential for coverage, which would trigger a duty to defend. The appellate court also determined that the trial court\u2019s findings of fact regarding the application of the warranty exclusion also extinguished any such duty and distinguished the&nbsp;<em>Heidari<\/em>&nbsp;facts from other California coverage cases.&nbsp;<\/p>\n\n\n\n<p>The\u00a0<em>Heidari<\/em>\u00a0case underscores how a more detailed complaint may be useful in the context of securing coverage from an insurer. Had the\u00a0<em>Heidari<\/em>\u00a0plaintiff included allegations in the complaint regarding the contractor performing some or all of the work, that might have persuaded the insurer to provide a defense based on the potential for coverage. However, by failing to include such allegations and ultimately having the judge find against it on this factual dispute and the applicability of the warranty exclusion, the plaintiff allowed the insurer to avoid any potential liability.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Alex Purvis, Emily M. Ruzic and Amandeep S. Kahlon | Build Smart In\u00a0Ali Heidari v. Golden Bear Insurance,\u00a0a California appeals court recently affirmed a lower court\u2019s decision to deny relief under a\u00a0CGL policy, where the policy excluded from coverage work performed by subcontractors under the contractor\u2019s warranty exclusion. Specifically, the appellate court upheld the trial&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/no-duty-to-defend-policy-exclusion-applies\/\">Continue reading <span class=\"screen-reader-text\">California Appeals Court Says No Duty to Defend Where Policy Exclusion Applies<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[10791,4,10,30,9914],"tags":[9895,392,228,57,23],"class_list":["post-900938","post","type-post","status-publish","format-standard","hentry","category-commercial-general-liability-policy","category-construction-defects","category-duty-to-defend","category-general-liability-policy","category-insurance-coverage","tag-advise-consult","tag-cgl-policy","tag-construction-defect-claims","tag-duty-to-defend-2","tag-insurance-coverage","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>California Appeals Court Says No Duty to Defend Where Policy Exclusion Applies - Advise &amp; 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