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Crawford v. Weather Shield Mfg., Inc.

Supreme Court of California

July 21, 2008, Filed

S141541

Opinion

 [**427]  [***724]  BAXTER, J.—Standard comprehensive liability insurance policies provide that the insurer must both indemnify and defend the insured against claims within the scope of the policy coverage. The insurer's duty to defend is broader than its duty to indemnify.  [****3] The latter duty runs only to claims that are actually covered by the policy, while the duty to defend extends to claims that are merely potentially covered. (E.g., Buss v. Superior Court (1997) 16 Cal.4th 35, 45–46 [65 Cal. Rptr. 2d 366, 939 P.2d 766] (Buss); Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287, 295 [24 Cal. Rptr. 2d 467, 861 P.2d 1153].) “The [insurer's] defense duty is a continuing one, arising on tender of defense and lasting until the underlying lawsuit is concluded [***725]  [citation], or until it has been shown that there is no potential for coverage … .” (Montrose, supra, at p. 295.)

Here, however, we address issues concerning the contractual duty to defend in a noninsurance context. We consider whether, by their particular terms, the provisions of a pre-2006 residential construction subcontract obliged the subcontractor to defend its indemnitee—the developer-builder of the project—in lawsuits brought against both parties, insofar as plaintiffs' complaints alleged construction defects arising from the subcontractor's negligence, even though (1) a jury ultimately found that the subcontractor was not negligent, and (2) the parties have accepted an interpretation of the subcontract that gave the builder no right of indemnity  [****4] unless the subcontractor was negligent. We conclude that the answer is yes. We will therefore affirm the judgment of the Court of Appeal.

FACTS AND PROCEDURAL BACKGROUND

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44 Cal. 4th 541 *; 187 P.3d 424 **; 79 Cal. Rptr. 3d 721 ***; 2008 Cal. LEXIS 9072 ****

KIRK CRAWFORD et al., Plaintiffs and Appellants, v. WEATHER SHIELD MFG., INC., Defendant and Appellant.

Subsequent History: Reported at Crawford (Kirk) v. Weather Shield Manufacturing, Inc., 2008 Cal. LEXIS 9607 (Cal., July 21, 2008)

Prior History:  [****1] Court of Appeal Fourth Appellate District, Division Three, No. G032301. Superior Court of Orange County, Nos. 815154, 815156, 815182, 816278, Raymond J. Ikola, Judge.

Crawford v. Weather Shield Mfg., Inc., 136 Cal. App. 4th 304, 38 Cal. Rptr. 3d 787, 2006 Cal. App. LEXIS 133 (Cal. App. 4th Dist., 2006)

CORE TERMS

subcontractor, indemnity, indemnitee, subcontract, indemnitor, duty to defend, homeowners, subdivision, parties, indemnify, contractual, insureds, manufacturer, italics, underwriters, obligations, Roofing, defense costs, embraced, terms, reimbursement, developer, construction defect, defending, indemnity agreement, contracts, provisions, dealer, suits, cross-complaint

Business & Corporate Compliance, Contracts Law, Types of Contracts, Construction Contracts, Contract Conditions & Provisions, Indemnity Clauses, Contracts Law, Contract Interpretation, General Overview, Ambiguities & Contra Proferentem, Real Property Law, Construction Law, Contracts, Real Property Law, Contractors & Subcontractors