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Voyager Indemnity Insurance coverage Firm (“Voyager) issued a business legal responsibility insurance coverage coverage to MRB Building, Inc. (“MRB Building”), a framing subcontractor. As is frequent with such insurance policies, MRB Building’s coverage contained a “blanket” extra insured endorsement for its ongoing operations. Particularly, the coverage not solely coated MRB Building because the named insured, however prolonged “extra insured” standing to these individuals or organizations “for whom you might be performing operations.”
To qualify for such standing, the blanket extra insured endorsement contained sure circumstances, together with that MRB Building and the putative extra insured “have agreed in writing in a contract or settlement that such particular person or group be added as an extra insured.”
Jennifer Josephs (“Josephs”) employed normal contractor Zalman Netmzov and Zalman N., Inc. (“Zalman”) for a residential constructing mission in Santa Monica. Zalman retained MRB Building for the mission. A development employee suffered accidents on the mission and sued Josephs. In flip, Josephs sued Zalman, MRB and others for indemnity.
Zalman claimed extra insured standing underneath Voyager’s coverage with MRB Building, however produced no underlying written contract requiring MRB Building so as to add Zalman as an extra insured. As an alternative, Zalman relied on a Certificates of Legal responsibility Insurance coverage issued by MRB Building’s insurance coverage dealer figuring out Zalman because the Certificates Holder. The Certificates of Legal responsibility Insurance coverage, nevertheless, contained the proviso that it “IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER.” It additionally famous that, if the Certificates Holder is an extra insured, “the coverage(ies) have to be endorsed.” There was no such endorsement to MRB Building’s coverage.
Voyager filed swimsuit searching for a declaration that it owed no insurance coverage protection to Zalman as an extra insured. Neither as a part of its preliminary discovery disclosures, nor in response to relevant discovery propounded by Voyager, did Zalman produce any underlying contract or settlement requiring that it’s named as an extra insured underneath MRB Building’s coverage. As an alternative, Zalman continued to depend on the Certificates of Legal responsibility Insurance coverage and the coverage.
Voyager moved for abstract judgment. With its Opposition Temporary, Zalman produced for the very first time an “Insurance coverage Addendum to Building Settlement,” which said that every one subcontractors on the mission had been required to keep up normal legal responsibility insurance coverage that “shall identify the Contractor as an Further Insured.” In line with Zalman, each the Certificates of Legal responsibility Insurance coverage and the Insurance coverage Addendum independently proved that it certified as an extra insured such that the District Courtroom ought to deny Voyager’s movement.
The District Courtroom disagreed and granted Voyager’s movement for abstract judgment.
As a threshold matter, the District Courtroom rejected Zalman’s argument that the Certificates of Legal responsibility Insurance coverage conferred extra insured standing. Somewhat, the District Courtroom reasoned {that a} Certificates of Legal responsibility Insurance coverage “is merely proof {that a} coverage has been issued. It isn’t a contract between the insurer and the certificates holder.” 2023 WL 2904591 at *4 (quoting Empire Fireplace & Marine Ins. Co. v. Bell, 55 Cal.App.4th 1410, 1423 fn. 25 (1997)).
Subsequent, the District Courtroom concluded that Zalman couldn’t use the Insurance coverage Addendum to defeat Voyager’s movement. In deciding so, the District Courtroom relied on Federal Rule of Civil Process 37(c)(1)’s sanction for the failure to reveal required data. Pursuant to Rule 37(c)(1): “If a celebration fails to supply data or establish a witness as required by Rule 26(a) or (e), the celebration isn’t allowed to make use of that data or witness to provide proof on a movement, at a listening to, or at trial, except the failure was considerably justified or is innocent.”
The District Courtroom recited info supporting software of Rule 37(c)(1)’s sanction, together with that Zalman made no preliminary disclosures as required by Rule 26(a)(1) and failed to provide the Insurance coverage Addendum in response to Voyager’s discovery. Nor did Zalman clarify the late discovery of the Insurance coverage Addendum on the eve of its Opposition Temporary and roughly six months after Zalman’s preliminary disclosures ought to have been produced. It described the late manufacturing as fully Zalman’s fault.
The District Courtroom additionally rejected any notion that the late manufacturing was innocent. Somewhat, the courtroom defined that Zalman’s manufacturing of the Insurance coverage Addendum occurred simply two weeks earlier than discovery cutoff, and disadvantaged Voyager of the chance to conduct discovery in regards to the authenticity of the Insurance coverage Addendum. The courtroom additionally acknowledged that Voyager had incurred bills to arrange its movement “primarily based on what Zalman now contends is an incomplete understanding of the info.” 2023 WL 2904591 at *6.
As a result of Zalman couldn’t depend on the Insurance coverage Addendum, it did not introduce proof of an underlying contract or settlement that required MRB Building so as to add Zalman as an extra insured. Thus, the District Courtroom granted Voyager’s movement for a declaration that it owed no responsibility to defend or indemnify Zalman towards the underlying claims asserted by the injured employee and Josephs.
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