Archive - June 2014

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An Additional Insured’s Reasonable Expectations may be Different from the Named Insured’s and Must be Considered to Determine whether the Additional Insured is Entitled to Defense from the Insurer of a Commercial Excess & Umbrella Liability Policy
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Salespersons Acting Under the Broker Have the Same Fiduciary Duty to the Buyer and the Seller as the Broker When a Broker is a Dual Agent of Both the Buyer and the Seller in a Real Property Transaction

An Additional Insured’s Reasonable Expectations may be Different from the Named Insured’s and Must be Considered to Determine whether the Additional Insured is Entitled to Defense from the Insurer of a Commercial Excess & Umbrella Liability Policy

Transport Insurance Company v. Superior Court (2014) 222 Cal.App.4th 1216.

By: Richard H. Glucksman, Jon A. Turigliatto, and Kacey R. Riccomini
June 4, 2014

The Second District Court of Appeal’s recent decision, Transport Insurance Company v. Superior Court (2014) 222 Cal.App.4th 1216, immediately affects builders and contractors (collectively “builders”) who are often named as additional insureds (AIs) to contractors’ general liability policies. The decision is an important tool for builders’ counsel because the builder’s reasonable expectations can alter the interpretation of ambiguous terms in policies issued to subcontractors. Essentially, the builder’s intent is relevant to the interpretation of policy terms because the subcontractor’s intent in requesting additional coverage depends on the agreement it made with the builder. The salient aspects of the facts, the Appellate Court’s reasoning, and practical considerations are discussed below.

Transport Insurance Company (Transport) issued a commercial excess and umbrella liability policy (Policy) to Vulcan Materials Company (Vulcan), naming R.R. Street & Co., Inc. (Street) as an AI for its distribution of a solvent. The Policy provided that Transport would indemnify and defend the insured for loss caused by property damage if (1) it was not covered by “underlying insurance” but was within the terms of coverage of the Policy, or (2) if the limits of liability of the “underlying insurance” were exhausted during the Policy period due to property damage. The Policy included a Schedule of Underlying Insurance (Schedule) that listed policies issued to Vulcan. Thereafter, Vulcan and Street were named as defendants in several environmental contamination actions (Underlying Actions).

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Salespersons Acting Under the Broker Have the Same Fiduciary Duty to the Buyer and the Seller as the Broker When a Broker is a Dual Agent of Both the Buyer and the Seller in a Real Property Transaction

Horiike. v. Coldwell Banker Residential Brokerage Co. 2014 WL 1384226 (Cal.App. 2 Dist.)

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper
June 4, 2014

The Second District Court of Appeal held that when a broker is the dual agent of both the buyer and the seller in a real property transaction, the salespersons acting under the broker have the same fiduciary duty to the buyer and the seller as the broker.

In 2006, a salesperson at Coldwell Banker Residential Brokerage Company (“Coldwell Banker”) listed a Malibu property on a multiple listing service. The salesperson stated the home offered approximately 15,000 square feet of living areas and created a flier stating the same. In March of 2007, a couple made an offer to purchase the property. The salesperson provided a letter from the architect stating the size of the house was approximately 15,000 square feet and suggested the couple hire a qualified specialist to verify the square footage. The deal eventually fell through when the seller would not extend the time for an inspection of the property. The salesperson subsequently changed the approximate square footage of the living areas to be “0/O.T.” meaning zero square feet and other comments.

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