Hennepin County District Court File No. 02-17503.
Considered and decided by Halbrooks, Presiding Judge; Schumacher, Judge; and Hudson, Judge.
The appropriate end date when allocating liability among consecutive insurers according to the pro-rata-by-time-on-the-risk method is the date of remediation. Defense costs among consecutively liable insurers are allocated according to the same method used to apportion indemnity costs.
The opinion of the court was delivered by: Hudson, Judge
Affirmed in part, reversed in part, and appeal dismissed
On appeal from summary judgment in a declaratory-judgment action, appellant West Bend Mutual Insurance Company argues that the district court (a) erred in its allocation-of-damages ruling by setting the end date for the allocation period as the date when the insured received notice of a pending claim, and (b) erred in its allocation-of-defense-costs ruling by holding that defense costs should be equally allocated between the insurers. Appellant American Economy Insurance Company seeks a clarification of the district court's order proposing that obligations should be apportioned on a pro-rata basis according to the number of years an insurer is on the risk. Because we conclude that the district court erred in its allocation of damages and defense costs, we affirm the district court's judgment in part and reverse in part. We dismiss American Economy Insurance Company's appeal because the issue was not properly presented to the district court.
The material facts as determined by the district court are not in dispute. Respondent Wooddale Builders, Inc. (Wooddale) is a general contractor, primarily in the business of constructing single-family homes. In late 2000, the current owners of sixty stucco homes built by Wooddale from 1990 to 1996 began making complaints to Wooddale, alleging that defective construction or faulty workmanship resulted in water-infiltration and mold-growth problems in their homes. The homeowners filed claims against Wooddale to recover the costs necessary to repair the homes.
Appellant West Bend Mutual Insurance Company (West Bend), appellant American Economy Insurance Company (Safeco), respondent Maryland Casualty Company (Maryland Casualty), respondent American Family Insurance Group (American Family), and respondent Western National Insurance Group (Western National) are insurance companies that provided commercial-general-liability coverage under occurrence-based policies to Wooddale from November 13, 1990, through November 13, 2002. The policy periods are as follows:
American Family November 13, 1990 - November 13, 1995
West Bend November 13, 1995 - November 13, 1996
Safeco November 13, 1996 - November 13, 1997
Maryland Casualty November 13, 1997 - November 13, 2000
Western National November 13, 2000 - November 13, 2002
Each of the insurance policies issued by the insurers contains standard language calling upon the insurer to defend and indemnify Wooddale with respect to any property damages resulting ...