Aetna Cas. and Sur. Co. v. Aztec Plumbing Corp., 19235

• Citation: 106 Nev. 474,796 P.2d 227
• Decision Date: 21 August 1990
• Docket Number: No. 19235,19235
• Parties: AETNA CASUALTY AND SURETY COMPANY, Appellant, v. AZTEC PLUMBING CORPORATION, Alan Conrady, Industrial Steel Corporation, Lumber Sales, Inc., Peter Ruiz, dba Universal Concrete, Respondents.
• Court: Supreme Court of Nevada

Page 227

796 P.2d 227

106 Nev. 474

AETNA CASUALTY AND SURETY COMPANY, Appellant, v. AZTEC PLUMBING CORPORATION, Alan Conrady, Industrial Steel

Corporation, Lumber Sales, Inc., Peter Ruiz, dba

Universal Concrete, Respondents.

No. 19235.

Supreme Court of Nevada.

Aug. 21, 1990.

[106 Nev. 475] Pearson & Patton, Las Vegas, for appellant.

Rawlings, Olson & Cannon, and Janice Hodge Jensen, Reno, for Aztec and Conrady.

Vargas & Bartlett, and Shari Cassin, Las Vegas, for Industrial Steel.

R. Paul Sorenson, Las Vegas, for Lumber Sales.

Anderson & Huntsman, Las Vegas, for Ruiz and Universal Concrete.

OPINION

PER CURIAM:

The principal issues in this appeal are whether the district court erred by dismissing appellant's complaints on the alternative grounds that appellant split its cause of action and cannot sue its own insured. For the reasons set forth below, we find the district court did err and therefore reverse and remand.

FACTS

Home Savings Association (Home) was a Nevada Savings and Loan Association. Home's wholly owned subsidiary, H.S. Service Corporation (H.S.) was a general contractor for the design, development, and construction of the Forest Lane Apartments in Las Vegas, Nevada. Both Home and H.S. were insured by appellant, Aetna Casualty and Surety Company (Aetna). Except for inspection services, all of the work at the apartments was performed by independent subcontractors, including the above-named respondents. Respondent Conrady supervised respondent Aztec Plumbing Corporation's work during construction.

Eventually, the apartments were sold to Forest Lane Associates (Forest Lane). Because of purported design and construction defects, Forest Lane sued Home and H.S., alleging breach of warranty, breach of contract, negligence, and fraud. On June 26, 1986, a jury verdict was entered against H.S. Aetna subsequently discharged the judgment in full by paying a total of $9,090,000.00 to Forest Lane.

Meanwhile, on February 24, 1983, H.S. filed suit against the architect, engineer, and subcontractors to recover the damages claimed by Forest Lane. Aetna was never joined as a party to this action. The lawsuit was later dismissed with prejudice, except for respondent Industrial Steel, for failure to timely bring the matter to trial.

On November 24, 1987, Aetna filed its own suit against the subcontractors, seeking indemnity and contribution for the money it paid to Forest Lane. The district court, relying on its earlier finding that Aetna was subrogated to the rights of H.S. in the H.S. suit against the subcontractors, concluded that Aetna was barred from relief. The district court found that against respondents Aztec, Industrial Steel, and Lumber Sales, Inc., Aetna had split its cause of action. The district court also found that Aztec, Alan Conrady, Industrial Steel, Lumber Sales, Inc., and Universal Concrete were Aetna's co-insureds and therefore could not be sued because an insurance company cannot sue its own insured.

DISCUSSION

On appeal, Aetna maintains that the district court erred by concluding that Aetna split its cause of action. Aetna contends that its cause of action against the...