Albert D. Seeno Construction Company v. Aspen Insurance UK Limited
- Susan Illston
- 3:17-cv-03765
- U.S. District Court · Northern District of California
- 6
Albert D. Seeno Construction v. Aspen Insurance: Judge Illston granted plaintiffs’ motion in part, denied it in part, and denied Aspen’s motion.
ADSCO and Aspen Insurance UK Limited. The rulings address whether Aspen’s defense costs reduce policy limits, whether those costs satisfy the self-insured retention, Aspen’s duty to defend, and factual disputes affecting ADSCO’s claims for defense costs, settlements, and damages.
What happened
In Albert D. Seeno Construction Company v. Aspen Insurance UK Limited, a dispute over insurance coverage for housing construction claims, the parties asked the court to interpret provisions in three general-liability policies issued to ADSCO.
The court ruled that Aspen’s defense attorneys’ fees are supplementary payments that reduce the policies’ limits and do not satisfy ADSCO’s self-insured retention. It also ruled that the retention did not affect Aspen’s duty to defend and that Aspen could not seek reimbursement of defense costs to satisfy it. Other questions—including how the retention applies to an occurrence, whether certain payments were voluntary, and whether statutes of limitation barred damages—required factual findings and were not resolved on summary judgment.
Judge Susan Illston granted the plaintiffs’ motion for partial summary judgment in part and denied it in part, and denied Aspen’s motion for partial summary judgment.
The detailed version
- Albert D. Seeno Construction Company v. Aspen Insurance UK Limited · No. 3:17-cv-03765
- Susan Illston
- Sept. 28, 2020
Background
This was an insurance-coverage dispute between Albert D. Seeno Construction Company and related entities, referred to as ADSCO, and Aspen Insurance UK Limited. ADSCO builds houses and townhomes in subdivisions. Aspen issued ADSCO three consecutive general-liability policies covering December 2005 through December 2015.
The parties filed cross-motions for partial summary judgment, asking the court to interpret policy provisions that affected claims and counterclaims. The court explained that some disputes depended on the parties’ changing course of dealing and factual circumstances, which could not be resolved on summary judgment.
Plaintiffs’ Motion
Defense attorneys’ fees and supplementary payments
ADSCO argued that attorneys’ fees Aspen paid to defend ADSCO were not “supplementary payments” that reduced the policy limits. ADSCO alternatively argued that, if those fees were supplementary payments, they should satisfy the self-insured retention, or SIR.
The court disagreed. It held that attorneys’ fees Aspen incurred defending ADSCO were supplementary payments that reduced the policy limits. It also held that Aspen’s own payments did not satisfy or reduce the SIR. The court interpreted the relevant policy language as referring to ADSCO’s own attorneys’ fees. The court therefore denied ADSCO’s motion for partial summary judgment on this issue.
The SIR and Aspen’s duty to defend
ADSCO sought a ruling that the SIR did not affect Aspen’s duty to defend and that Aspen could not seek reimbursement of defense costs to satisfy the SIR.
The court granted ADSCO’s motion on this issue. It held that Aspen’s duty to defend applied regardless of whether ADSCO had satisfied the SIR. The court also held that ADSCO could satisfy the SIR by paying the first $250,000 of damages per occurrence, including through ADSCO’s own supplementary payments for defense costs. The policies did not state that ADSCO was responsible for defense costs to satisfy the SIR or that Aspen could seek reimbursement of its defense costs.
The SIR and “occurrence”
ADSCO sought a ruling that Aspen could not multiply the $250,000 per-occurrence SIR by the number of policy limits or policies applicable to a claim or suit. The court found disputed factual questions about how the SIR operated in relation to an occurrence and what constituted an occurrence in the claims submitted to Aspen.
The court denied ADSCO’s motion on this issue, concluding that the questions should be resolved by the factfinder after a fuller factual record. The court noted that the parties appeared to agree that coverage under a single policy would require only one SIR, but they disagreed about the meaning of “occurrence” in the circumstances presented.
Aspen’s Motion
Voluntary Payments provision
Aspen sought partial summary judgment that the policies’ Voluntary Payments provision barred ADSCO from recovering defense costs incurred before Aspen received notice of a claim and settlement amounts paid without Aspen’s consent.
ADSCO argued that the payments were not voluntary because ADSCO made them after Aspen told ADSCO that it had to satisfy the SIR before Aspen would defend a claim. The court found factual questions about whether the payments were voluntary, viewing the evidence in the light most favorable to ADSCO. It denied Aspen’s request for partial summary judgment on this issue.
Statutes of limitation
Aspen also sought partial summary judgment based on statutes of limitation. Aspen argued that ADSCO could not seek bad-faith damages for underlying matters resolved before February 22, 2015, or breach-of-contract and unfair-business-practices damages for matters resolved before February 22, 2013.
ADSCO argued that Aspen had maintained a continuing policy of refusing to defend ADSCO until the SIR was satisfied and that this continuing conduct prevented the statutes of limitation from barring the damages claims. The court found disputed factual questions concerning the statutes of limitation and concluded that the issue was not suitable for summary judgment. It stated that Aspen could renew the motions at trial through a Rule 50 motion if appropriate.
Disposition
Judge Susan Illston granted in part and denied in part ADSCO’s motion for partial summary judgment. She denied Aspen’s motion for partial summary judgment.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.