Case5:14-cv-05401-LHK Document1 Filed12/09/14 Page1 of 8

THE AGUILERA LAW GROUP, APLC

A. Eric Aguilera, Esq. (SBN 192390)
Raymond E. Brown, Esq. (SBN 164819)
Jason Y. Chao, Esq. (SBN 250735)
650 Town Center Drive
Suite 100
Costa Mesa, CA 92626
T: 714-384-6600 / F: 714-384-6601
eaguilera@aguileragroup.com
rbrown@aguileragroup.com
jchao@aguileragroup.com

Attorneys for Plaintiff ST. PAUL FIRE AND MARINE INSURANCE COMPANY

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

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ST. PAUL FIRE AND MARINE

INSURANCE COMPANY, a Connecticut
corporation,

Case No.
PLAINTIFFS COMPLAINT FOR:

Plaintiff,

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(1) DECLARATORY RELIEF;

v.

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(2) EQUITABLE CONTRIBUTION;

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WESTCHESTER FIRE INSURANCE

COMPANY, a Pennsylvania corporation; and
DOES 1-10 inclusive,

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JURY DEMAND

Defendants.

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Comes now Plaintiff, ST. PAUL FIRE AND MARINE INSURANCE COMPANY (referred

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to as Plaintiff or TRAVELERS) and pleads the following allegations on information and belief

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in support of its Complaint herein:

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1.

The present action seeks a judicial declaration concerning the rights and obligations

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as to TRAVELERS, and Defendant WESTCHESTER FIRE INSURANCE COMPANY with regard

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to defense fees and costs incurred in the action entitled, The Board of Trustees of California State

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University v. Clark Construction Group, Inc., et al., Santa Clara County Superior Court case no.

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111CV214032 (the "Underlying Action").

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COMPLAINT

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JURISDICTION

2.

Plaintiff

ST.

PAUL

FIRE

AND

MARINE

INSURANCE

COMPANY

(TRAVELERS) is now, and at all relevant times was, a corporation, existing under the laws of the

State of Connecticut with its principal place of business in Hartford, Connecticut. TRAVELERS is,

and at all relevant times was, an insurance carrier eligible to do business as an insurer in the State of

California.

3.

Plaintiff is informed and believes and thereon alleges Defendant WESTCHESTER

FIRE INSURANCE COMPANY (WESTCHESTER) is a corporation organized and existing

under the laws of the State of Pennsylvania with its principal place of business in Pennsylvania.

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Plaintiff is further informed and believes and thereon alleges that WESTCHESTER is, and at all

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times relevant was, an insurance carrier eligible to do business as an insurer in the State of

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California.

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4.

Defendants sued herein as DOES 1 through 10, inclusive, are sued herein by such

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fictitious names because Plaintiff is unaware of the true names and capacities of said DOE

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defendants. Plaintiff will amend this Complaint to reflect the true names when the same are

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ascertained. Plaintiff is informed and believes and thereon alleges that said DOE defendants are

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responsible for the acts, events, and circumstances alleged herein, or are interested parties to this

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action.

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5.

The amount in controversy exceeds $75,000, and represents fees and costs sought in

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connection with the defense and/or indemnification of the parties mutual insured with regard to the

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Underlying Action.

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6.

Defendant is domiciled in Pennsylvania.

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The Court has diversity jurisdiction as Plaintiff is domiciled in Connecticut and the

VENUE
7.

Plaintiff is informed and believes and thereon alleges the acts and/or omissions at

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issue in this litigation took place in this judicial district within the State of California.

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Underlying Action is pending in this judicial district. Venue, therefore, lies with this Court, as a

The

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COMPLAINT

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substantial part of the events which are the subject of the claims asserted herein are located and/or

took place in this judicial district.

GENERAL ALLEGATIONS

A.

8.

The Insurance Policies

TRAVELERS issued the following CCIP general commercial liability insurance

policy under which The Clark Construction Group, Inc. (Clark) and F.W. Spencer & Sons, Inc.

(Spencer) qualify as insureds: policy number KK06801051, effective from 11/15/02 to 8/1/05 (the

TRAVELERS Policy). The TRAVELERS Policy contains a $2,000,000 per event limit.

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Plaintiff is informed and believes and thereon alleges Defendant WESTCHESTER

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issued excess CCIP commercial general liability insurance policy under which Clark and Spencer

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qualify as insureds: policy number MLA 733242, effective from 11/15/02 to 8/1/05 (the

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WESTCHESTER Policy). Plaintiff is informed and believes that the WESTCHESTER Policy

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contains a $25 million per occurrence limit excess to the TRAVELERS Policy.

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10.

Plaintiff is informed and believes and thereon alleges each of the policies issued by

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the Defendants identified herein fictitiously as DOES 1 to 10 name or designate Clark and/or

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Spencer as an insured thereon, whether as a named insured or an additional insured.

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11.

Defendants WESTCHESTER, and DOES 1 through 10 are in possession of their

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respective policies of insurance and know the terms and contents thereof, to an equal or greater

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extent than Plaintiff. However, on information and belief, Plaintiff alleges the Defendants policies

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provide an insuring agreement and are written on standard forms which provide, in part, an

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agreement to defend any insured from and against suits seeking damages potentially covered under

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the insurance policies and/or to pay any amounts the insured is legally obligated to pay for covered

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damages.

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12.

Plaintiff is informed and believes by reason of the declarations and/or additional

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insured endorsements on WESTCHESTER and DOES 1 through 10s policies, Clark and/or

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Spencer are insured on these Defendants policies for purposes of the insuring agreement(s) therein.

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B.

13.

The Underlying Action

The Underlying Action arises out of construction of the University Campus Village

at the San Jose State University (the Project). The Project consists of three multi-story residential

buildings above a two level parking structure. Building A is eight stories high and contains

apartment units for faculty and staff. Building B has several different types of apartments for

student use, and has portions that are nine and fifteen stories high. Building C is seven stories high

and is designed with suite type units. All three buildings are built on a podium that serves as the

roof of a two level parking garage. Clark was the general contractor for the Project and retained

Spencer to install all the Mechanical work at the Project, via subcontract dated May 15, 2003.

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The Project was completed on or about December 22, 2005.

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Via letter dated February 10, 2011, the University placed Clark on notice that the

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buildings in the Project have experienced leaks through pipes throughout the complex.

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University subsequently initiated litigation as against both Clark and Spencer, alleging that the

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plumbing system was defectively installed, in the action entitled, The Board of Trustees of

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California State University v. Clark Construction Group, Inc., et al., Santa Clara County Superior

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Court case no. 111CV214032 (the "Underlying Action").

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15.

The

Clark and Spencer both tendered their defense and indemnity in the Underlying

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Action to TRAVELERS under the TRAVELERS Policy. TRAVELERS accepted the tenders and

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agreed to defend Clark and Spencer subject to a reservation of rights. To date, Clark and Spencer

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have incurred in excess of $1.5 million in fees and costs in the defense of the Underlying Action.

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Clark and Spencer have also tendered the Underlying Action to WESTCHESTER

under the WESTCHESTER Policy.

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The parties have been attempting to settle Clark and Spencers potential liability with

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the plaintiff in the Underlying Action. TRAVELERS has offered to contribute its policy limits to

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the settlement.

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Underlying Action and refusing to meaningfully participate in settlement discussions. As a result of

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WESTCHESTERs refusal to settle, TRAVELERS has been forced to incur continuing and

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additional sums in the defense of Clark and Spencer in the Underlying Action.

However, WESTCHESTER has been delaying in attempting to settle the

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18.

Plaintiff is informed and believes and thereon alleges Clark and/or Spencer tendered

its defense and indemnity with regard to the Underlying Action to DOES 1 through 10 as a named

insured or an additional insured under the carriers respective policies of insurance. Plaintiff is

informed and believes and thereon alleges DOES 1 through 10 denied Clark and/or Spencers

tenders of defense and indemnity.

FIRST CAUSE OF ACTION FOR DECLARATORY RELIEF

(By TRAVELERS Against WESTCHESTER and DOES 1 through 10)

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Plaintiff hereby re-alleges and incorporates by reference each allegation contained in

all preceding paragraphs of this Complaint as though fully set forth herein.
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An actual, present and justiciable controversy has arisen and now exists between

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Plaintiff on the one hand and the Defendants on the other, concerning their respective rights, duties

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and obligations under the insurance policies issued by each of them.

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In particular, Plaintiff contends, and is informed and believes that Defendants

WESTCHESTER and DOES 1 through 10 deny the following:

a. Defendant WESTCHESTER has and had a duty to meaningfully participate in
settlement negotiations and settle the Underlying Action;

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b. As a result of WESTCHESTERs failure to settle the Underlying Action,

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TRAVELERS has been forced to incur continuing and additional sums in the defense

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of Clark and Spencer in the Underlying Action;

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c. Defendants WESTCHESTER and DOES 1 through 10 had and have a duty to defend

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and/or indemnify Clark and/or Spencer against the claims, demands, actions and

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causes of action asserted against Clark and Spencer in the Underlying Action;

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d. Defendants WESTCHESTER and DOES 1 through 10 had and have an equitable

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duty and responsibility to pay a fair and proportionate share of the costs of defense

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and/or indemnity incurred on behalf of Clark and/or Spencer;

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e. The costs of defending and/or indemnifying Clark and/or Spencer have been and are
being borne disproportionately by Plaintiff; and
f. The costs associated with the defense and/or indemnification of Clark and Spencer

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should be equitably apportioned between and among Plaintiff and Defendants

WESTCHESTER and DOES 1 through 10 under applicable law and equitable

principles.

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Plaintiff asserts and contends that declaratory judgment is both necessary and proper

at this time for the court to determine the respective rights and liabilities of the parties regarding

their obligations to pay for the defense and/or indemnification of Clark and Spencer against the

allegations made in the Underlying Action.

SECOND CAUSE OF ACTION FOR EQUITABLE CONTRIBUTION

(By TRAVELERS Against WESTCHESTER and DOES 1 through 10)

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Plaintiff hereby re-alleges and incorporates by reference each allegation contained in

all preceding paragraphs of this Complaint as though fully set forth herein.
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Plaintiff has agreed to defend Clark and Spencer against the claims asserted against it

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in the Underlying Action, pursuant to the terms and conditions of the TRAVELERS Policy, and

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subject to a full reservation of its rights.

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25.

Plaintiff is informed and believes and thereon alleges that the policy(ies) issued by

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Defendants WESTCHESTER and DOES 1 through 10, provide liability insurance to Clark and/or

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Spencer, designating Clark and/or Spencer as a named insured or additional insured thereon.

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Plaintiff is further informed and believes and thereon alleges that the allegations made, pleaded or

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otherwise asserted against Clark and/or Spencer in the Underlying Action, if true, set forth claims

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for damages potentially covered under WESTCHESTERs and DOES 1 through 10s policies.

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26.

As such, Defendants WESTCHESTER and DOES 1 through 10, and each of them,

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are obligated to participate in the defense and/or indemnification of Clark and/or Spencer in the

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Underlying Action by reason of their respectively underwritten policies of insurance, which provide

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an agreement to undertake the duty to defend suits seeking damages from bodily injury or property

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damage potentially covered under their respective policies and/or the duty to indemnify for liability

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for bodily injury or property damage covered under their respective policies. In addition, Defendant

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WESTCHESTER is obligated to undertake the continuing defense of Clark and Spencer by reason

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of its failure to meaningfully participate in settlement negotiations and settle the Underlying Action.

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27.

All conditions precedent to Defendants WESTCHESTERs and DOES 1 through

10s obligations under their respective policies of insurance have been satisfied, waived, and/or

excused. Defendants WESTCHESTERs and DOES 1 through 10s obligations to defend and/or

indemnify Clark and Spencer are currently due and owing.

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Defendants WESTCHESTER and DOES 1 through 10, and each of them, have to

date failed to participate in the defense and/or indemnification of Clark and/or Spencer, and/or

failed to contribute a full and equitable share toward Plaintiffs costs of defending and/or

indemnifying Clark and/or Spencer which have been incurred and which are being incurred in

connection with the Underlying Action.

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29.

By reason of Defendants WESTCHESTERs and DOES 1 through 10s failure to

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discharge their obligations and equitably participate in the defense and/or indemnification of Clark

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and Spencer, Plaintiff has incurred and/or paid, and will incur and/or pay, more costs than it would

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have, had Defendants WESTCHESTER and DOES 1 through 10 agreed to defend and/or contribute

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a full and equitable share to the defense and/or indemnity of Clark and Spencer in performance of

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their due and owing obligations under their respective insurance policies.

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30.

Defendants WESTCHESTERs and DOES 1 through 10s failure to discharge their

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obligations under their respective policies of insurance is wrongful and thus causing an inequitable

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result, in that Plaintiff is paying and has paid more than its equitable share of the costs of defending

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and/or indemnifying Clark and Spencer in the Underlying Action without the participation of

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Defendants in paying for such costs.

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31.

Because of Defendants WESTCHESTERs and DOES 1 through 10s wrongful

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failure to discharge their obligations under their respective policies of insurance, Plaintiff is entitled

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to an award of equitable contribution, to reimburse it for costs equivalent to each Defendants

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WESTCHESTERs and DOES 1 through 10s fair and equitable proportionate share of the total

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costs of defense and/or indemnification incurred in connection with the claims against

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Clark and Spencer in the Underlying Action, with interest thereon at the prescribed legal rate.

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