Plaintiffs, an excess insurer and its insured,

Plaintiffs, an excess insurer and its insured, challenged a judgment of the Superior Court of Los Angeles County (California), which sustained the demurrer of defendant insurer in connection with the action against it for breach of contract and for the recovery of fees incurred.

Nakase Law Firm explains intentional interference with contractual relations California

Overview

The insured entered into an agreement with a contractor to perform renovation work at the insured’s apartment complex. The parties’ agreement required the contractor to defend and indemnify the insured for claims arising out of the contractor’s work. The agreement also required that the insured be named as an additional insured on the contractor’s policy with the insurer. After the work was completed, several tenants brought an action for damages against the insured. The insurer and the contractor refused to contribute towards the settlement. The insured’s excess insurer paid for the settlement, then both the insured and excess insurer brought this action to recover these fees. The trial court sustained the insurer’s demurrer on the ground of misjoinder. The appellate court concluded that while there might have been some prejudice to the contractor if the insurer remained in the action, there was also some possible prejudice to the insured if the insurer did not. Possible prejudice was not a sufficient reason to have found that the insurer was misjoined in the action. There was no misjoinder on the face of the complaint.

Outcome

The appellate court reversed the trial court’s decision that sustained the insurer’s demurrer. The appellate court remanded with directions to enter an order overruling the demurrer. The excess insurer and insured were entitled to costs on appeal.