Eichler Homes, Inc. v. Underwriters at Lloyd's, London
| Decision Date | 03 December 1965 |
| Citation | 238 Cal.App.2d 532,47 Cal.Rptr. 843 |
| Court | California Court of Appeals Court of Appeals |
| Parties | EICHLER HOMES, INC., a corporation, Plaintiff and Respondent, v. UNDERWRITERS AT LLOYD'S, LONDON, Defendant and Appellant. Civ. 22355. |
Wallace, Garrison, Pascoe, Norton & Ray, San Francisco, for appellants.
Adams, Freidenrich & Ware, Palo Alto. for respondent.
Respondent, Eichler Homes, Inc., a corporation, brought this action against Underwriters at Lloyd's, London, seeking a determination of respondent's rights under various certificates of insurance issued by the underwriters. 1 The trial court entered judgment declaring that the underwriters were obligated to defend certain actions brought by third parties against respondent, and were further liable for attorney's fees, court costs and expenses incurred by respondent because of failure to accept defense of the claims made against respondent. The principal issue on appeal is whether the trial court was correct in its conclusion that appellant was obligated to defend the suits brought by third parties. Appellant also contends that respondent failed to comply with the notice provisions of the policy. From our review of the record and the applicable law we conclude that the judgment of the trial court was correct and must be affirmed.
Respondent is in the business of building and selling homes. It procured several certificates of insurance from appellant. The scope of coverage of all the certificates was identical. They provided: * * *' The certificates also contained a clause by which appellant agreed to defend '* * * all claims or suits for such injury or damage for which the Assured is, or is alleged to be liable. * * *'
The relevant exclusions in the certificates stated:
The notice of loss provision in each certificate was the same. It read, in part: 'As soon as reasonably possible after the occurrence of every accident or loss coming under the conditions of this Certificate the Assured shall give to the undersigned, on behalf of Underwriters, written notice thereof with the fullest information obtainable at the time.'
After issuance of appellant's certificates, and while the insurance was in force, several owners of residences constructed and sold by respondent made claims for damages resulting from the rupture and failure of their radiant heating systems. Numerous suits were filed based on these claims. Defense of these actions was tendered to appellant and rejected on the ground that the claims presented were excluded by the provisions of the certificates, although respondent was advised by appellant that certain of the claims for damage to personal property, such as furniture, rugs, drapes, etc., might come within coverage of the insurance, subject to the deductible provisions of the certificates. However, no defense to any of the actions here involved was provided, and as a result respondent expended $7,823.60 for court costs, attorney's fees and expenses in defending these claims.
The trial court determined that appellant was obligated to defend nine separate actions brought against respondent. Although many parties are named as plaintiffs in the several complaints, for simplicity each action is here referred to only by the name of the party first named in the complaint as a plaintiff. The nine actions are those of Dennis Mann, David Kriegler, Harold R. La Bonte, Jr., Charles E. Armstrong, Karl Bach, Birchall W. Smith, Bernard Feshbach, Saul W. Chaikin, and Steven W. Bauer.
The critical allegations of the several complaints are stated below:
A. The Mann Complaint
'* * * that as a proximate result [of the carelessly and negligently installed system] * * * each and every plaintiff hereinabove referred to sustained damage to his home and to said radiant heating system.'
In paragraph X of their first cause of action: 'That as a proximate result of the negligence and carelessness of defendants * * * plaintiffs have sustained damages as follows: * * * (b) that leakage from deteriorating pipes which comprise said radiant heating system has or will, unless completely replaced, damage the real property, improvements, appliances and furnishings in an undetermined amount; (c) the market value of their home has been or will be impaired.' (Emphasis added.)
B. The Kriegler Complaint
'* * * erection and construction of said dwelling was done in so unskillful, careless and negligent a manner and of such unsuitable materials that * * * the radiant heating system in said dwelling leaked and discharged water and fluids, causing structural and other damage to said dwelling and making said dwelling entirely untenantable.' (Emphasis added.)
C. The La Bonte Complaint
'* * * that as a direct and proximate result of the * * * negligence, carelessness and recklessness of Defendants * * * said radiant heating system was caused to and did discharge water on, in and about the house of Plaintiffs causing damage thereto and rendering said premises untenantable. * * *' (Emphasis added.)
D. The Armstrong Complaint
'As a further proximate result of the said conduct of the defendants, the value of the building * * * has decreased in the approximate amount of $3,000 to plaintiff's further damage. * * *' In paragraph VII plaintiff continues: 'As a further proximate result of said conduct of the defendants, and each of them, the plaintiff suffered * * * minor damage to furniture and fixtures. * * *' (Emphasis added.)
E. The Smith Complaint
The allegations made in this action are identical to those stated in the La Bonte complaint, supra.
F. The Chaikin Complaint
'* * * as a result of the breach of * * * warranties, * * * the plaintiff sustained damage to his home * * * in a total amount of $3,283.31.' In a second cause of action, the plaintiff alleged that 'as a proximate result of the above mentioned negligence, plaintiff's property was injured and damaged * * * as follows: the radiant heating system failed, damaging the floors, heating system, together with its component parts, and other parts of plaintiff's home, all in the amount of $3,283.31, including loss of use of $355.53.' (Emphasis added.)
G. The Bauer Complaint
'That as a direct and proximate result of said breach plaintiffs' unit together with certain appurtenances thereto and certain personal possessions of the plaintiffs located in and about plaintiffs' unit were damaged and depreciated and plaintiffs were required to and did expend the sum of $799.93 to repair the same; * * *.' (Emphasis added.)
H. The Feshbach Complaint
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