Home > Uncategorized > Clarendon v. Starnet holds the Duty to Defend includes the Calderon Process for Construction Defect cases.

Clarendon v. Starnet holds the Duty to Defend includes the Calderon Process for Construction Defect cases.

In Clarendon America Insurance Company v. Starnet Insurance Company (No. G042353), the Fourth District Court of Appeals ruled in an insurer’s suit seeking indemnity, declaratory relief, and contribution from defendant insurer, arising from an underlying lawsuit by a homeowner’s association for construction defects.  The Judgment of the trial court in favor of the plaintiff was affirmed as a provision in a commercial general liability (CGL) insurance policy requiring the insurer to defend the insured against any "suit" seeking damages to which the insurance applies, includes the duty to defend the insured in proceedings under the Calderon Act.  The CGL policies in issue, as all standard CGL policies, define "suit" to mean "a civil proceeding in which damages . . . to which this insurance applies are alleged." The Court ruled that this process prescribed by the Calderon Act (the Calderon Process) is a civil proceeding within this definition. The Calderon Act requires a common interest development association to satisfy certain dispute resolution requirements with respect to the builder, developer, or general contractor before the association may file a complaint in court for construction or design defects. Although the Calderon Process occurs before a complaint is filed and itself does not result in a judgment or court-ordered payment of money, the Calderon Process is an integral part of construction defect litigation initiated by a common interest development association and the duty to defend still applies.  This is a significant ruling for those involved in construction defect litigation for developments.

Nothing herein should be construed as legal advice or creating any attorney-client relationship. Please consult with an attorney for specific legal advice. Thank you.

All Rights Reserved © 2010 by Michael L. Mau, Esq.

The Mau Law Firm

Blog: http://maulaw.spaces.live.com

Website: www.MauLaw.com

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