KIMBERLY J. MUELLER, District Judge.
Plaintiff UNITED SPECIALTY INSURANCE COMPANY ("Plaintiff') and Defendant DEAN PETERSEN dba PETERSEN CONSTRUCTION SERVICES ("Defendant") (collectively, the "Parties") respectfully submit the following Stipulation and Proposed Order for Filing First Amended Complaint and Answer to First Amended Complaint:
WHEREAS, on October 17, 2016, Plaintiff filed its Complaint in this action;
WHEREAS, on December 27, 2016, Defendant filed its Answer to Plaintiff's Complaint in this action;
WHEREAS, information concerning the claims at issue subsequently came to the attention of the Parties, resulting in the Parties each desiring to amend their respective pleadings in this action.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by the Parties through their undersigned counsel of record that the Parties will file concurrent limited amendments to the pleadings, as follows:
1. Plaintiff shall be allowed to file its First Amended Complaint. A copy of Plaintiff's First Amended Complaint, in draft with revisions shown in redline, is attached hereto as
2. Defendant will then file its Answer to Plaintiff's First Amended Complaint, a copy of which, in draft with revisions shown in redline, is attached hereto as
1. Plaintiff shall be allowed to file its First Amended Complaint. A copy of Plaintiff's First Amended Complaint, in draft with revisions shown in redline, is attached hereto as
2. Defendant will then file its Answer to Plaintiff's First Amended Complaint, a copy of which, in draft with revisions shown in redline, is attached hereto as
COMES NOW Plaintiff UNITED SPECIALTY INSURANCE COMPANY ("USIC") and complains of defendant DEAN PETERSEN dba PETERSEN CONSTRUCTION SERVICES ("PETERSEN") as follows:
1. This is an action for declaratory judgment between citizens of different states in which the amount in controversy exceeds $75,000, exclusive of costs and interest. This Court has original jurisdiction based on diversity of citizenship pursuant to 28 U.S.C. § 1332(a)(1) and (c) (1).
2. A substantial part of the events giving rise to this action occurred within this judicial district, and defendant's business activities and contacts within this judicial district are sufficient to subject defendant to personal jurisdiction within this judicial district. Accordingly, venue in the Eastern District of California is appropriate pursuant to 28 U.S.C. § 1391(b)(1) and (2), and 28 U.S.C. § 1391(d).
3. USIC is, and at all times relevant hereto was, an insurance corporation in good standing, organized and existing under the laws of the State of Delaware. USIC is authorized to do business and write insurance in the State of California, with its principal place of business in Bedford, Texas. Accordingly, USIC is a citizen of the State of Delaware and the State of Texas for the purpose of diversity jurisdiction.
4. PETERSEN is an individual domiciled in the State of California and is a citizen of the State of California for purposes of diversity jurisdiction.
5. This declaratory relief action arises out of a construction defect lawsuit filed on November 12, 2014 by plaintiffs David and Michelle Finkelstein (collectively, "Finkelsteins") in the Superior Court of the State of California, County of Placer, Case No. SCV 0035325, styled David Finkelstein and Michelle Finkelstein v. Dean Petersen, et al. ("Underlying Action"). A true and correct copy of the Complaint in the Underlying Action is attached hereto as
6. The Complaint in the Underlying Action alleged that the Finkelsteins entered into a written agreement dated August 15, 2013 with PETERSEN, in which PETERSEN agreed to construct a single-family residence at 8360 Rustic Woods Way, Loomis, California ("Property") for $1,110,398.
7. The Complaint in the Underlying Action alleged that construction at the Property continued through June of 2014, at which time the Finkelsteins moved into the Property even though not all work had been completed.
8. The Complaint in the Underlying Action alleged the Property was negligently built, resulting in significant construction defects and resultant damages. The alleged damages include defects relating to the foundation, hardscape, driveway, concrete, siding and trim, exterior balconies, wrought iron, roofing, finish carpentry, cabinets, electrical, painting, windows, doors, sheet metal, appliances, framing, and other components of the Property as yet unknown, resulting in significant expense to repair the Property. The amount in controversy in the Underlying Action allegedly exceeds $75,000.
9. PETERSEN retained independent contractors to perform all of the construction work and supply all of the materials for the Property with respect to the alleged defects, including but not limited to, work and/
10. The damages at issue in the Underlying Action arose, in whole or in part, out of the actions or inactions the independent contractors performing work on behalf of PETERSEN, or the actions or inactions of the independent contractors' employees, laborers, suppliers or vendors.
11. PETERSEN did not secure from each independent contractor prior to construction of the Property the following documents: (1) a written agreement requiring the independent contractor to indemnify and hold harmless PETERSEN against all liability arising out of or related to the work or products of the independent contractor; (2) a written agreement requiring the independent contractor, at its own expense, to defend any suit brought against PETERSEN founded upon a claim for damage sustained by any third party arising out of or related to the work or product of the independent contractor; (3) a written agreement requiring the independent contractor to defend and indemnify PETERSON at the time written notice of the claim or suit is first provided to PETERSEN regardless of whether the independent contractor is named as part to the claim or suit; (4) a written agreement requiring the independent contractor to name PETERSEN an additional insured on its Commercial General Liability policy; and (5) a valid and enforceable Certificate of Insurance and Additional Insured Endorsement issued by or on behalf of the insurance carrier for the independent contractor indicating that PETERSEN is named as an additional insured for coverage equal to or greater than the coverage provided by the Commercial General Liability issued by USIC to PETERSON (Policy No. DSI-GL-CA-00545) for the entire time the independent contractor is performing work or providing materials on behalf of PETERSON, including coverage for both on-going and products-completed operations hazards.
12. USIC insured PETERSEN pursuant to a Commercial General Liability policy of insurance, Policy No. DSI-GL-CA-00545, effective August 28, 2013 to August 28, 2014 ("Policy"). A true and correct copy of the Policy in redacted form is attached hereto as
13. PETERSEN tendered its defense and indemnity of the Underlying Action to USIC under the Policy. USIC agreed to defend PETERSEN in the Underlying Action under the Policy pursuant to a full reservation of rights to disclaim any obligation to defend or indemnify PETERSEN in connection with the Underlying Action. USIC retained counsel to defend PETERSEN in the Underlying Action and is currently defending PETERSEN against the Underlying Action.
14. USIC incorporates the allegations contained in paragraphs 1 through 13, inclusive, of this
15. The Policy contains an Independent Contractors Exclusion ("ICE"). The ICE expressly excludes coverage as follows:
16. The, damages at issue in the Underlying Action arose, in whole or in part, out of the actions or inactions or the materials provided by the independent contractors of PETERSEN, or the actions or inactions of the independent contractor's
17. An actual controversy now exists in that USIC contends, and PETERSEN denies, that USIC owes no duty to defend or indemnify PETERSEN under the Policy against the claims asserted in the Underlying Action based upon the ICE.
18. USIC desires a judicial determination with respect to the rights, duties and obligations of USIC as to the duty to defend or indemnify PETERSEN against the claims asserted in the Underlying Action under the terms and conditions of the Policy, including the ICE. Such a determination is necessary and appropriate at this time in order that the parties may ascertain their respective rights, duties and obligations.
19. USIC has no other adequate remedy at law to resolve the aforesaid controversy.
20. USIC incorporates the allegations contained in paragraphs 1 through 19, inclusive, of this
21. In providing a defense to PETERSEN under the Policy in connection with the Underlying Action, USIC fully reserved all rights of reimbursement from PETERSEN of any defense costs paid on PETERSEN's behalf upon adjudication by this Court that no duty to defend PETERSEN was ever triggered under the Policy with respect to the Underlying Action.
22. USIC's reservation of rights created an implied contractual obligation on the part of PETERSEN to reimburse USIC upon adjudication by this Court that no duty to defend PETERSEN was ever triggered under the Policy with respect to the Underlying Action
23. By accepting the defense under the Policy, PETERSEN received the benefits under the Policy to which it was not entitled and would be unjustly enriched by the retention of those benefits at the expense of USIC upon adjudication by this Court that no duty to defend PETERSEN was ever triggered under the Policy with respect to the Underlying Action.
24. USIC contends that it never owed a duty to defend PETERSEN under the Policy in connection with the Underlying Action and is therefore is entitled to a monetary judgment against PETERSEN according to proof equal to the sum expended by USIC in the defense of PETERSEN under the Policy in the Underlying Action.
WHEREFORE, USIC prays for judgment as follows:
COMES NOW Plaintiff UNITED SPECIALTY INSURANCE COMPANY ("USIC") and complains of defendant DEAN PETERSEN dba PETERSEN CONSTRUCTION SERVICES ("PETERSEN") as follows:
1. This is an action for declaratory judgment between citizens of different states in which the amount in controversy exceeds $75,000, exclusive of costs and interest. This Court has original jurisdiction based on diversity of citizenship pursuant to 28 U.S.C. § 1332(a)(1) and (c)(1).
2. A substantial part of the events giving rise to this action occurred within this judicial district, and defendant's business activities and contacts within this judicial district are sufficient to subject defendant to personal jurisdiction within this judicial district. Accordingly, venue in the Eastern District of California is appropriate pursuant to 28 U.S.C. § 1391(b)(1) and (2), and 28 U.S.C. § 1391(d).
3. USIC is, and at all times relevant hereto was, an insurance corporation in good standing, organized and existing under the laws of the State of Delaware. USIC is authorized to do business and write insurance in the State of California, with its principal place of business in Bedford, Texas. Accordingly, USIC is a citizen of the State of Delaware and the State of Texas for the purpose of diversity jurisdiction.
4. PETERSEN is an individual domiciled in the State of California and is a citizen of the State of California for purposes of diversity jurisdiction.
5. This declaratory relief action arises out of a construction defect lawsuit filed on November 12, 2014 by plaintiffs David and Michelle Finkelstein (collectively, "Finkelsteins") in the Superior Court of the State of California, County of Placer, Case No. SCV 0035325, styled David Finkelstein and Michelle Finkelstein v. Dean Petersen, et al. ("Underlying Action"). A true and correct copy of the Complaint in the Underlying Action is attached hereto as
6. The Complaint in the Underlying Action alleged that the Finkelsteins entered into a written agreement dated August 15, 2013 with PETERSEN, in which PETERSEN agreed to construct a single-family residence at 8360 Rustic Woods Way, Loomis, California ("Property") for $1,110,398.
7. The Complaint in the Underlying Action alleged that construction at the Property continued through June of 2014, at which time the Finkelsteins moved into the Property even though not all work had been completed.
8. The Complaint in the Underlying Action alleged the Property was negligently built, resulting in significant construction defects and resultant damages. The alleged damages include defects relating to the foundation, hardscape, driveway, concrete, siding and trim, exterior balconies, wrought iron, roofing, finish carpentry, cabinets, electrical, painting, windows, doors, sheet metal, appliances, framing, and other components of the Property as yet unknown, resulting in significant expense to repair the Property. The amount in controversy in the Underlying Action allegedly exceeds $75,000.
9. PETERSEN retained independent contractors to perform construction work and supply materials for the Property, including but not limited to, work and/or materials related to the foundation, hardscape, driveway, concrete, siding and trim, exterior balconies, wrought iron, roofing, finish carpentry, cabinets, electrical, painting, windows, doors, sheet metal, appliances, and framing of the Property.
10. The Underlying Action arose, in whole or in part, out of the actions or inactions of or the materials provided by independent contractors performing work on behalf of PETERSEN, or the actions or inactions of independent contractors' employees, laborers, suppliers or vendors.
11. PETERSEN did not secure from each independent contractor prior to construction of the Property the following documents: (1) a written agreement requiring the independent contractor to indemnify and hold harmless PETERSEN against all liability arising out of or related to the work or products of the independent contractor; (2) a written agreement requiring the independent contractor, at its own expense, to defend any suit brought against PETERSEN founded upon a claim for damage sustained by any third party arising out of or related to the work or product of the independent contractor; (3) a written agreement requiring the independent contractor to defend and indemnify PETERSON at the time written notice of the claim or suit is first provided to PETERSEN regardless of whether the independent contractor is named as part to the claim or suit; (4) a written agreement requiring the independent contractor to name PETERSEN an additional insured on its Commercial General Liability policy; and (5) a valid and enforceable Certificate of Insurance and Additional Insured Endorsement issued by or on behalf of the insurance carrier for the independent contractor indicating that PETERSEN is named as an additional insured for coverage equal to or greater than the coverage provided by the Commercial General Liability issued by USIC to PETERSON (Policy No. DSI-GL-CA-00545) for the entire time the independent contractor is performing work or providing materials on behalf of PETERSON, including coverage for both on-going and products-completed operations hazards.
12. USIC insured PETERSEN pursuant to a Commercial General Liability policy of insurance, Policy No. DSI-GL-CA-00545, effective August 28, 2013 to August 28, 2014 ("Policy"). A true and correct copy of the Policy in redacted form is attached hereto as
13. PETERSEN tendered its defense and indemnity of the Underlying Action to USIC under the Policy. USIC agreed to defend PETERSEN in the Underlying Action under the Policy pursuant to a full reservation of rights to disclaim any obligation to defend or indemnify PETERSEN in connection with the Underlying Action. USIC retained counsel to defend PETERSEN in the Underlying Action and is currently defending PETERSEN against the Underlying Action.
14. USIC incorporates the allegations contained in paragraphs 1 through 13, inclusive, of this First Amended Complaint as though fully set forth herein.
15. The Policy contains an Independent Contractors Exclusion ("ICE"). The ICE expressly excludes coverage as follows:
This exclusion will not apply if:
16. The Underlying Action arose, in whole or in part, out of the actions or inactions or the materials provided by independent contractors of PETERSEN, or the actions or inactions of independent contractors' employees, laborers, suppliers or vendors, so as to trigger the ICE; and PETERSEN failed to satisfy the conditions necessary to overcome the exclusionary impact of the ICE. Based on the ICE, USIC avers that no duty to defend or indemnify is triggered under the Policy against the claims asserted in the Underlying Action.
17. An actual controversy now exists in that USIC contends, and PETERSEN denies, that USIC owes no duty to defend or indemnify PETERSEN under the Policy against the claims asserted in the Underlying Action based upon the ICE.
18. USIC desires a judicial determination with respect to the rights, duties and obligations of USIC as to the duty to defend or indemnify PETERSEN against the claims asserted in the Underlying Action under the terms and conditions of the Policy, including the ICE. Such a determination is necessary and appropriate at this time in order that the parties may ascertain their respective rights, duties and obligations.
19. USIC has no other adequate remedy at law to resolve the aforesaid controversy.
20. USIC incorporates the allegations contained in paragraphs 1 through 19, inclusive, of this First Amended Complaint as though fully set forth herein.
21. In providing a defense to PETERSEN under the Policy in connection with the Underlying Action, USIC fully reserved all rights of reimbursement from PETERSEN of any defense costs paid on PETERSEN's behalf upon adjudication by this Court that no duty to defend PETERSEN was ever triggered under the Policy with respect to the Underlying Action.
22. USIC's reservation of rights created an implied contractual obligation on the part of PETERSEN to reimburse USIC upon adjudication by this Court that no duty to defend PETERSEN was ever triggered under the Policy with respect to the Underlying Action
23. By accepting the defense under the Policy, PETERSEN received the benefits under the Policy to which it was not entitled and would be unjustly enriched by the retention of those benefits at the expense of USIC upon adjudication by this Court that no duty to defend PETERSEN was ever triggered under the Policy with respect to the Underlying Action.
24. USIC contends that it never owed a duty to defend PETERSEN under the Policy in connection with the Underlying Action and is therefore is entitled to a monetary judgment against PETERSEN according to proof equal to the sum expended by USIC in the defense of PETERSEN under the Policy in the Underlying Action.
WHEREFORE, USIC prays for judgment as follows:
Defendant DEAN PETERSEN dba PETERSEN CONSTRUCTION SERVICES ("Petersen" or "Defendant") in response to the unverified
1. In response to Paragraph 1 of the Complaint
2. In response to Paragraph 2 of the Complaint
3. In response to Paragraph 3 of the Complaint
4. In response to Paragraph 4 of the Complaint
5. In response to Paragraph 5 of the Complaint
6. In response to Paragraph 6 of the Complaint
7. In response to Paragraph 7 of the Complaint
8. In response to Paragraph 8 of the Complaint
9. In response to Paragraph 9 of the Complaint
10. In response to Paragraph 10 of the ComplaintDefendant admits the allegations contained therein.
11. In response to Paragraph 11, Defendant denies each and every allegation contained therein.
12. In response to Paragraph 12, Defendant admits that USIC insured PETERSEN pursuant to a Commercial General Liability policy of insurance, Policy No. DSI-GL-CA-00545, effective August 28, 2013 to August 28, 2014, but is without sufficient knowledge or information to form a belief as to the truth of the remaining allegations and on that basis denies each and every remaining allegation contained therein.
13. In response to Paragraph 13, Defendant admits that Defendant tendered its defense and indemnity of the Underlying Action to USIC under the Policy, and that USIC retained counsel to defend PETERSEN in the Underlying Action and is currently defending PETERSEN against the Underlying Action. Defendant denies each and every remaining allegation contained in Paragraph 13.
14. In response to Paragraph 14, Defendant incorporates the allegations contained in paragraphs 1 through 13, inclusive, of this Complaint
15. In response to Paragraph 15, Defendant avers that the Policy speaks for itself and must be read and interpreted as a whole, and contains language that includes some or all of the language quoted in Paragraph 15. Defendant is without sufficient knowledge or information to form a belief as to the truth of the remaining allegations, and on that basis denies each and every remaining allegation contained in Paragraph 15.
16. In response to Paragraph 16, Defendant admits that USIC is making the contentions contained therein, but denies each and every remaining allegation contained in Paragraph 16,
17. In response to Paragraph 17, Defendant admits that USIC that is making the contentions contained therein, and further admits that it denies that USIC owes no duty to defend or indemnify PETERSEN under the Policy against the claims asserted in the Underlying Action based upon the ICE. Defendant denies each and every remaining allegation contained in Paragraph 17.
18. In response to Paragraph 18, Defendant avers that this paragraph contains a legal conclusion which does not require a response but, to the extent otherwise, Defendant denies each and every allegation contained in Paragraph 18.
19. In response to Paragraph 19, Defendant denies each and every allegation contained in Paragraph 19.
20. In response to Paragraph 20, Defendant incorporates the allegations contained in paragraphs 1 through 19, inclusive, of this Complaint
21. In response to Paragraph 21, Defendant denies each and every allegation contained therein.
22. In response to Paragraph 22, Defendant denies each and every allegation contained therein.
23. In response to Paragraph 23, Defendant denies each and every allegation contained therein.
24. In response to Paragraph 24, Defendant admits that USIC that is making the contentions contained therein, but denies each and every remaining allegation contained in Paragraph 24.
In response to the Prayer for Relief, Defendant denies that USIC is entitled to a judgment in its favor against Defendant.
1. In response to Paragraph 1 of the Prayer, Defendant denies that USIC is entitled to any relief.
2. In response to Paragraph 2 of the Prayer, Defendant denies that USIC is entitled to any relief.
3. In response to Paragraph 3 of the Prayer, Defendant denies that USIC is entitled to any relief.
4. In response to Paragraph 4 of the Prayer, Defendant denies that USIC is entitled to any relief.
The Complaint
The Complaint
All of the claims asserted in the Complaint
All of the claims set forth in the Complaint
Plaintiff has breached its contractual and extra contractual obligations under the applicable insurance Policy and, accordingly, all of the claims set forth in the Complaint
Plaintiff has breached its contractual and extra contractual obligations under the applicable insurance Policy and, accordingly, any relief to which Plaintiff may be entitled should be offset by Plaintiff's comparative fault.
Plaintiff owes a duty to defend and indemnify Petersen in the Underlying Action, based on all of the contentions made in the Underlying Action, including but not limited to the contentions made in pleadings and discovery, and all extrinsic facts known to Plaintiff, under the terms of all applicable insurance policies issued by Plaintiff.
At all times material to the allegations of the ComplaintComplaint
At all times material to the allegations of the ComplaintComplaint
Plaintiff failed to properly reserve its rights to deny coverage for defense and indemnity of Petersen in the Underlying Action.
Plaintiff has failed to take reasonable steps to mitigate its alleged loss, if any, and such conduct bars or reduces any recovery sought by Plaintiff herein.
Plaintiff's acts and omissions contributed as a proximate cause in bringing about Plaintiff's alleged loss, if any, and the total amount of loss to which Plaintiff is entitled, if any, should be reduced in proportion to Plaintiff's own fault.
Portions of the applicable policies are ambiguous and unenforceable.
Portions of the applicable policies are unenforceable because they defeat the reasonable expectations of the insured(s).
Plaintiff's ComplaintComplaint
One or more of the controversies alleged in the Complaint
Pursuit of the instant action is improper because the issues in this action overlap with issues in the pending Underlying Action, and pursuit of this action would prejudice the rights of Petersen as Plaintiff's insured(s). Accordingly, the instant action should be dismissed or stayed pending a resolution of the Underlying Action. Montrose Chem. Corp. v. Sup. Ct. 25 Cal.App.4th 902, 910 (1994); Wilton v. Seven Falls Co. 515 U.S. 283 (1995); Allied Prop. & Cas. Ins. Co. v. Roberts 2011 WL 2495691, at *1 (E.D. Cal. June 21, 2011).
Plaintiff has breached its duty to defend Petersen in the Underlying Action by, among other things, failing to advise Petersen of its right to independent counsel as required by California Civil Code Section 2860, and its claims herein are therefore barred.
Plaintiff's claims are barred in whole or in part by the doctrine of unjust enrichment, as Plaintiff's retention of the premiums paid by Petersen for insurance coverage would be unjust if Plaintiff refuses to acknowledge its obligations to Petersen.
Plaintiff's claims are barred by Plaintiff's failure to join one or more indispensable parties.
Plaintiff's Complaint
Plaintiff has failed to provide a proper and adequate defense to Defendant in the Underlying Action and has therefore waived any coverage defenses.
Plaintiff has failed to provide a proper and adequate defense to Defendant in the Underlying Action and therefore is estopped to deny any defense or indemnity obligations.
Plaintiff has failed to provide a proper and adequate defense to Defendant in the Underlying Action and, therefore, is not entitled to any reimbursement of defense costs.
Plaintiff failed to properly reserve its rights to seek reimbursement from Petersen.
Petersen asserts that they presently have insufficient knowledge or information on which to form a belief as to whether they may have further, as yet unstated, defenses available. Petersen therefore reserves herein the right to assert additional defenses if discovery and further investigation indicates that further defenses would be appropriate.
WHEREFORE, Petersen prays for judgment as follows:
Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure Defendant hereby demands a trial by jury of all issues so triable.
Defendant DEAN PETERSEN dba PETERSEN CONSTRUCTION SERVICES ("Petersen" or "Defendant") in response to the unverified First Amended Complaint ("FAC") for Declaratory Judgement and Reimbursement of Plaintiff UNITED SPECIALTY INSURANCE COMPANY ("USIC" or "Plaintiff'), admits, denies and avers as follows:
1. In response to Paragraph 1 of the FAC, Defendant admits the allegations contained therein.
2. In response to Paragraph 2 of the FAC, Defendant admits the allegations contained therein.
3. In response to Paragraph 3 of the FAC, Defendant is without sufficient knowledge or information to form a belief as to the truth of the allegations, and on that basis denies each and every allegation contained therein.
4. In response to Paragraph 4 of the FAC, Defendant admits the allegations contained therein.
5. In response to Paragraph 5 of the FAC, Defendant, without admitting any of the allegations in the Underlying Action, admits that this coverage dispute arises out of the Underlying Action as identified in Paragraph 5. Defendant admits that Exhibit A contains the complaint in the Underlying Action, among other documents. Defendant avers that the pleadings in the Underlying Action speak for themselves. For each of these reasons Defendant denies each and every remaining allegation contained in Paragraph 5.
6. In response to Paragraph 6 of the FAC, without admitting any of the allegations in the Underlying Action, Defendant admits that the Underlying Action contains such allegations, among others, but denies that Plaintiff has completely or accurately summarized those allegations. Furthermore, Defendant avers that the pleadings in the Underlying Action speak for themselves. For each of these reasons Defendant denies each and every allegation contained in Paragraph 6.
7. In response to Paragraph 7 of the FAC, without admitting any of the allegations in the Underlying Action, Defendant admits that the Underlying Action contains such allegations, among others, but denies that Plaintiff has completely or accurately summarized those allegations. Furthermore, Defendant avers that the pleadings in the Underlying Action speak for themselves. For each of these reasons Defendant denies each and every allegation contained in Paragraph 7.
8. In response to Paragraph 8 of the FAC, without admitting any of the allegations in the Underlying Action, Defendant admits that the Underlying Action contains such allegations, among others, but denies that Plaintiff has completely or accurately summarized those allegations. Furthermore, Defendant avers that the pleadings in the Underlying Action speak for themselves. For each of these reasons Defendant denies each and every allegation contained in Paragraph 8.
9. In response to Paragraph 9 of the FAC, Defendant admits the allegations contained therein.
10. In response to Paragraph 10 of the FAC, Defendant admits that the Underlying Action contained allegations relating to work performed and materials provided by independent contractors on behalf of Defendant, or the actions or inactions of independent contractors' employees, laborers, suppliers, or vendors. Defendant denies each and every remaining allegation contained therein.
11. In response to Paragraph 11, Defendant denies each and every allegation contained therein.
12. In response to Paragraph 12, Defendant admits that USIC insured PETERSEN pursuant to a Commercial General Liability policy of insurance, Policy No. DSI-GL-CA-00545, effective August 28, 2013 to August 28, 2014, but is without sufficient knowledge or information to form a belief as to the truth of the remaining allegations and on that basis denies each and every remaining allegation contained therein.
13. In response to Paragraph 13, Defendant admits that Defendant tendered its defense and indemnity of the Underlying Action to USIC under the Policy, and that USIC retained counsel to defend PETERSEN in the Underlying Action and is currently defending PETERSEN against the Underlying Action. Defendant denies each and every remaining allegation contained in Paragraph 13
14. In response to Paragraph 14, Defendant incorporates the allegations contained in paragraphs 1 through 13, inclusive, of this FAC as though fully set forth herein.
15. In response to Paragraph 15, Defendant avers that the Policy speaks for itself and must be read and interpreted as a whole, and contains language that includes some or all of the language quoted in Paragraph 15. Defendant is without sufficient knowledge or information to form a belief as to the truth of the remaining allegations, and on that basis denies each and every remaining allegation contained in Paragraph 15.
16. In response to Paragraph 16, Defendant admits that the Underlying Action contained allegations relating to work performed and materials provided by independent contractors on behalf of Defendant, or the actions or inactions of independent contractors' employees, laborers, suppliers, or vendors. Defendant denies each and every remaining allegation contained in Paragraph 16.
17. In response to Paragraph 17, Defendant admits that USIC that is making the contentions contained therein, and further admits that it denies that USIC owes no duty to defend or indemnify PETERSEN under the Policy against the claims asserted in the Underlying Action based upon the ICE. Defendant denies each and every remaining allegation contained in Paragraph 17.
18. In response to Paragraph 18, Defendant avers that this paragraph contains a legal conclusion which does not require a response but, to the extent otherwise, Defendant denies each and every allegation contained in Paragraph 18.
19. In response to Paragraph 19, Defendant denies each and every allegation contained in Paragraph 19.
20. In response to Paragraph 20, Defendant incorporates the allegations contained in paragraphs 1 through 19, inclusive, of this FAC as though fully set forth herein.
21. In response to Paragraph 21, Defendant denies each and every allegation contained therein.
22. In response to Paragraph 22, Defendant denies each and every allegation contained therein.
23. In response to Paragraph 23, Defendant denies each and every allegation contained therein.
24. In response to Paragraph 24, Defendant admits that USIC that is making the contentions contained therein, but denies each and every remaining allegation contained in Paragraph 24.
In response to the Prayer for Relief, Defendant denies that USIC is entitled to a judgment in its favor against Defendant.
1. In response to Paragraph 1 of the Prayer, Defendant denies that USIC is entitled to any relief.
2. In response to Paragraph 2 of the Prayer, Defendant denies that USIC is entitled to any relief.
3. In response to Paragraph 3 of the Prayer, Defendant denies that USIC is entitled to any relief.
4. In response to Paragraph 4 of the Prayer, Defendant denies that USIC is entitled to any relief.
The FAC and each and every allegation therein fail to state facts sufficient to state a cause of action against Defendant.
The FAC is uncertain.
All of the claims asserted in the FAC are barred by operation of the doctrine of unclean hands.
All of the claims set forth in the FAC are barred by operation of the doctrine of laches.
Plaintiff has breached its contractual and extra contractual obligations under the applicable insurance Policy and, accordingly, all of the claims set forth in the FAC are barred by Plaintiff's breaches.
Plaintiff has breached its contractual and extra contractual obligations under the applicable insurance Policy and, accordingly, any relief to which Plaintiff may be entitled should be offset by Plaintiff's comparative fault.
Plaintiff owes a duty to defend and indemnify Petersen in the Underlying Action, based on all of the contentions made in the Underlying Action, including but not limited to the contentions made in pleadings and discovery, and all extrinsic facts known to Plaintiff, under the terms of all applicable insurance policies issued by Plaintiff.
At all times material to the allegations of the FAC herein, the conduct and actions of Plaintiff and its agents, attorneys, representatives, and/or other individuals acting on its behalf, and each of them, was such as to constitute an estoppel as to each of the claims asserted in the FAC.
At all times material to the allegations of the FAC herein, the conduct and actions of Plaintiff and its agents, attorneys, representatives, and/or other individuals acting on its behalf, and each of them, was such as to constitute a waiver as to each of the claims asserted in the FAC.
Plaintiff failed to properly reserve its rights to deny coverage for defense and indemnity of Petersen in the Underlying Action.
Plaintiff has failed to take reasonable steps to mitigate its alleged loss, if any, and such conduct bars or reduces any recovery sought by Plaintiff herein.
Plaintiff's acts and omissions contributed as a proximate cause in bringing about Plaintiff's alleged loss, if any, and the total amount of loss to which Plaintiff is entitled, if any, should be reduced in proportion to Plaintiff's own fault.
Portions of the applicable policies are ambiguous and unenforceable.
Portions of the applicable policies are unenforceable because they defeat the reasonable expectations of the insured(s).
Plaintiff's FAC is barred because Plaintiff acted as a volunteer in connection with the matters alleged in the FAC.
One or more of the controversies alleged in the FAC is not ripe for adjudication.
Pursuit of the instant action is improper because the issues in this action overlap with issues in the pending Underlying Action, and pursuit of this action would prejudice the rights of Petersen as Plaintiff's insured(s). Accordingly, the instant action should be dismissed or stayed pending a resolution of the Underlying Action. Montrose Chem. Corp. v. Sup. Ct. 25 Cal.App.4th 902, 910 (1994); Wilton v. Seven Falls Co. 515 U.S. 283 (1995); Allied Prop. & Cas. Ins. Co. v. Roberts 2011 WL 2495691, at *1 (E.D. Cal. June 21, 2011).
Plaintiff has breached its duty to defend Petersen in the Underlying Action by, among other things, failing to advise Petersen of its right to independent counsel as required by California Civil Code Section 2860, and its claims herein are therefore barred.
Plaintiff's claims are barred in whole or in part by the doctrine of unjust enrichment, as Plaintiff's retention of the premiums paid by Petersen for insurance coverage would be unjust if Plaintiff refuses to acknowledge its obligations to Petersen.
Plaintiff's claims are barred by Plaintiff's failure to join one or more indispensable parties.
Plaintiff's FAC, and each cause of action therein, is barred by the applicable statutes of limitations, including without limitation Cal. Civ. Pro. Code §§ 337, 339, 343.
Plaintiff has failed to provide a proper and adequate defense to Defendant in the Underlying Action and has therefore waived any coverage defenses.
Plaintiff has failed to provide a proper and adequate defense to Defendant in the Underlying Action and therefore is estopped to deny any defense or indemnity obligations.
Plaintiff has failed to provide a proper and adequate defense to Defendant in the Underlying Action and, therefore, is not entitled to any reimbursement of defense costs.
Plaintiff failed to properly reserve its rights to seek reimbursement from Petersen.
Petersen asserts that they presently have insufficient knowledge or information on which to form a belief as to whether they may have further, as yet unstated, defenses available. Petersen therefore reserves herein the right to assert additional defenses if discovery and further investigation indicates that further defenses would be appropriate.
WHEREFORE, Petersen prays for judgment as follows:
Pursuant to Rule 38(b) of the Federal Rules of Civil Procedure Defendant hereby demands a trial by jury of all issues so triable.
