“PER CLAIM” HELD AMBIGUOUS IN COMMERCIAL LIABILITY POLICY
A California appellate court reversed a grant of summary judgment for defendant on a claim for equitable contribution for sums expended in defending a construction defect action. Defendant North American contended that its duty to defend never arose because the underlying insured never paid the $25,000 “per claim” self-insured retention for each of the eight covered homes at issue. The plaintiff, Clarendon America, countered that “per claim” required only one $25,000 payment for the entire action. In an unpublished opinion, the appellate court held that the phrase “per claim” was ambiguous, and that North American failed to show that the developer did not have an “objectively reasonable expectation” that the $25,000 payment would apply only once to the construction defect action as a whole, rather than to each of the eight covered homes. Clarendon Am. Ins. Co. v. North Am. Capacity Ins. Co., No. CIVRS701868 (Cal. App. Ct. June 15, 2010).
This post written by Michael Wolgin.
