USF INSURANCE COMPANY v. ILLINOIS UNION INSURANCE COMPANY 34-2011-00116267 Complaint

8/3/2019 USF INSURANCE COMPANY v. ILLINOIS UNION INSURANCE COMPANY 34-2011-00116267 Complaint

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THOMAS E. M U L V I H I L L (SBN 129906)T A M I K O A . D U N H A M (SBN 233455)M I T O S f f l H . FUJIO-WHITE (SBN 252839)B O O R N A Z I A N , JENSEN & GARTHE, PC555 12th Street, Suite 1800Oakland, CA 94607Telephone: (510) 834-4350Facsimile: (510) 839-1897SUSAN J. G I L L (SBN 131890)JULIE RHOADES (SBN 138027)G I L L &RHOADES, L L P1660 Union Street, Suite 301San Diego, CA 92101Telephone: (619) 881-0108Facsimile: (619)881-0096Attomeys for PlaintiffUSF INSURANCE COMPANY

DepartmentAss ignment s

Case Management 39Law and Motion 54

Minors Compromise22

SUPERIOR COURT OF THE STATE OF C A L I F O R N I ACOUNTY OF SACRAMENTO - U N L I M I T E D C I V I L JURISDICTION

USF INSURANCE COMPANY,Plaintiff,

V .I L L I N O I S U N I O N INSURANCECOMPANY and DOES 1-50, inclusive,

Defendants.

Case No.:C O M P L A I N T F O R :D E C L A R A T O R Y R E L I E F ( D U T Y T OD E F E N D ) AND E Q U I T A B L EC O N T R I B U T I O N

COMES NOW plaintiff USF INSURANCE COMPANY (hereinafter "USFIC") andalleges as follows:

G E N E R A L A L L E G A T I O N S

1. USFIC is, and at al l times relevant hereto was, an insurance company authorized todo business and write insurance in the State o f Califomia.

2. USFIC is informed and believes, and on the basis of this information and beliefalleges, that defendant I LLI NO I S U N I O N INSURANCE COMPANY (hereinafter, "Illinois

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Union") is, and at all times relevant hereto was, an insurance company authorized to do businessand write insurance in the State of Califomia. Illinois Union is a non-admitted surplus linesinsurer in Califomia.

3. The tme names and capacities, whether individual, corporate, associate or otherwiseo f defendant DOES 1 through 50, inclusive, are currently unknown to USFIC, who therefore suesthose defendants by such fictitious names. USFIC is infomted and believes, and on the basis ofthis information and belief alleges, that each fictitiously named defendant is an insurance earner,or agent or employee of an insurance carrier, responsible for defense obligations relative to tlieunderlying action as described herein. USFIC is entitled to the relief sought herein against allthese fictitious defendants and, therefore, sues these defendants by such fictitious names. USFICw i l l insert the true names and capacities of these fictitiously named defendants, together withcharging allegations if not already set for th herein, when obtained. I l l inois Union and DOES 1through 50, inclusive, are hereinafter collectively sometimes referred to as "DEFENDANTS."

The Insurance Policies4. USFIC insured Central Fireplace & Appliance ("CFA") under commercial general

liability policy number SHO 11126, effective November 3, 1999 to November 3, 2000 (the"USFIC CFA Policy"); Dennis Blazona Construction, Inc., dba: Blaco, and Dennis Blazona,individually (collectively, "Blazona"), under policies of general liability insurance. Policy No.SHO 10561, effective November 4, 1998 to November 4, 1999, and Policy No. SHO 10561-01,effective November 4, 1999 to November 4, 2000 (the "USFIC Blazona Policies"); MidCalD r y wal l ("MidCal"), under policies of general liability insurance. Policy No. SHO 10998,effective August 4, 1999 to August 4, 2000, and Policy No. SHO 10998-01, effective August 4,2000 to August 4, 2001 (the "USFIC MidCal Policies"); Odom & Sons Construction &Development ("Odom & Sons"), under policies of general liability insurance, Policy No. SHO10822, effective Apri l 30, 1999 to Ap r i l 30, 2000, and Policy No. SHO 10822-01, effective Apri l30, 2000 to Ap r i l 30, 2001 (the "USFIC Odom & Sons Policies"); Remington Builders, Inc.("Remington"), under policies of general liability insurance, Policy No. SHO 10293, effective June

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14, 1998 to June 14, 1999, Policy No. SHO 10293-01, effective June 14, 1999 to June 14, 2000,and Policy No. SHO 10293-02, effectiveJune 14, 2000 to June 14, 2001 (the "USFIC RemingtonPolicies"); Shorey Construction ("Shorey"), under a policy of general liability insurance. PolicyNo . SHO 11565, effective August 19, 2000 to August 19, 2001 (hereinafter "USFIC ShoreyPolicy") and Rogers Grading under a policies of general liability insurance, Policy SHO 10929,effective June22, 1999 to June 22, 2000, and Policy No. SHO 10929-01, effective June. 22, 2000 toJune 22, 2001 (hereinafter the "USFIC Rogers Grading Policies"). The USFIC CFA Policy,USFIC Blazona Policies, USFIC MidCal Policies, USFIC Odom & Sons Policies, USFICRemington Policies, USFIC Shorey Policy and USFIC Rogers Grading Policies provide, inrelevant part, that USFIC w i l l pay those sums that the insured becomes legally obligated to pay asdamages because of property damage to which the USFIC CFA Policy, USFIC Blazona Policies,USFIC MidCal Policies, USFIC Odom & Sons Policies, USFIC Remington Policies, USFICShorey Policy and USFIC Rogers Grading Policies apply, and that USFIC wi l l have the duty todefend any suit seeking such damages.

5. USFIC is infomied and believes and thereupon alleges that Illinois Union insuredCFA under general liability insurance, Policy No. OGL 041129, effective November 3, 2000 toNovember 3, 2001 (the "Il l inois Union CFA Policy"); Blazona under a policy of general liabilityinsurance. Policy No. OGL 041125, effective November 4, 2000 to November-4, 2001 (the"Il l inois Union Blazona Policy"); MidCal under a policy of general liability insurance, Policy No.OGL 065283, effective August 4, 2001 to August 4, 2002 (the "Illinois Union MidCal Policy");Odom & Sons under a policy of general liability insurance. Policy No. OGL 051002, effectiveApri l 30, 2001 to Apri l 30, 2002 (the "Ilhnois Union Odom & Sons Policy"); Remington.under apolicy of general liability insurance. Policy No. OGL 065188, effectiveJune 14, 2001 to July 14,2002 (the "Il l inois Union Remington Policy"); Shorey under a policy of general liability insurance,Policy No . OGL 065318, effective August 19, 2001 to March 29, 2002 (hereinafter "Il l inois UnionShorey Policy"); and Rogers Grading under a policy of general liability. Policy No . OGL 065217,effective June 22, 2001 to June 22, 2002 (hereinafter "Il l inois Union Rogers Grading Policy").

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USFIC is informed and believes and thereupon alleges that the Illinois Union CFA Policy, Ill inoisUnion Blazona Policy, Illinois Union MidCal Policy, Illinois Union Odom & Sons Policy, Ill inoisUnion Remington Policy, Illinois Union Shorey Policy, and Illinois Union Rogers Grading Policyprovide, in relevant part, that Ill inois Union wi l l pay those sums that the insured becomes legallyobligated to pay as damages because of property damage to which the Illinois Union CFA Policy,Ill inois Union Blazona Policy, Illinois Union MidCal Policy, Ill inois Union Odom & Sons Policy,Ill inois Union Remington Policy, Ill inois Union Shorey Policy and Illinois Union Rogers GradingPolicy apply, and that Illinois Union w i l l have the duty to defend any suit seeking such damages.

The UnderlyingActions6. This action for declaratory relief and equitable contribution arises out of numerous

construction defect lawsuits f iled in various Califomia Superior Courts as follows (hereinafter,collectively, "Underlying Actions"):

a. Noel Bagan, et al v. U.S Home Corp., et a l . Case No . 34-2009-00067529 filedon or about December 31, 2009 in Sacramento County Superior Court(hereinafter '''Bagan Action") ;

b. Natalie Bay, et al v. ToMmeRanch Assoc., et a l . Case No. 34-2009-00067529filed on or about October 6, 2009 in San Joaquin County Superior Court(hereinafter "Bay Action") ;

c. Bill Garvey, et al v. Centex Homes, Inc, Case No . 34-2010-00073233 filed onor about March 18, 2010 in Sacramento County Superior Court (hereinafter"Gar\>ey Action") ;

d. Jess J. Soria v. Merilage Homes of Northern California, Inc., et al.. Case No.SCV27064 filed on or about Apri l 28, 2010 in Placer County Superior Court(hereinafter "Soria Action") ;

e. Octavio Romero, et al v. Morrison Homes, Inc, Case No. 34-2010-00083790filed on or about July 29, 2010 in Sacramento County Superior Court(hereinafter "Romero Action") ;

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f David Appel, et al. v. Atherlon Homes, LLC, et a l . Case No. 39-2008-00185411-CU-C.D-STK filed on or about May 30, 2008 in San Joaquin CountySuperior Court (hereinafter "Appel Action") ; and

g. Eric & Evelyn Drumm, et al v. Greystone Homes, Inc., Case No. FGl 1570053filed on or about Apri l 8, 2011 in Alameda County Superior Court (hereinafter"Dnimm Action") ;

h . Elizabeth Ortiz, et al . v. Bright Development, Case No. 850399 filed on or aboutFebruary 8, 2010 in Stanislaus County Superior Court (hereinafter "OrtizAction") ; and

i . Li, et al v. Richmond American, Case No. 30-2010-00419421-CU-CD-CXCfiled on or about November 20, 2010 in Orange County Superior Court(hereinafter " L i Action") .

The Basan Action7. USFIC is informed and believes, and on the basis of this information and belief

alleges, that the Bagan Action alleged, in relevant part, that U.S. Home Corp., Lennar Sales Corp.and Lennar Homes of Califomia, Inc. (collectively "U.S. Home") acted as developers and/orgeneral contractors for the construction of multiple single family homes; that these single familyhomes suffered f r om numerous and diverse construction defects and deficiencies; that thesedefects and deficiencies caused or contributed to continuous and progressive damage toplaintiffs'real and personal property; and that U.S. Home was liable to plaintiffs for the aforementioneddamages under theories of, inter alia, strict liability and negligence.

8. USFIC is informed and believes, and on the basis of this infomiation and beliefalleges, that U.S. Home filed a cross-complaint in the Bagan Action for, inter alia, equitableindenmity and breach of contract against various subcontractors involved in the construction of thesubject properties, including CFA. USFIC is informed and believes, and upon such informationand belief alleges, that the cross-complaint averred, in relevant part, that the work of the cross-defendants, including CFA, caused or contributed, in whole or in part, to the damage to real and

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personal property alleged in the Bagan Action.9. USFIC is infomied and believes, and upon such infonnation and belief alleges, that

CFA worked as a fireplace subcontractor in connection w i th the construction of certain singlefamily homes at issue in the Bagan Action.

10. USFIC received notice of the Bagan Action. USFIC is defending CFA tinder theUSFIC CFA Policy under a reservation ofrightsand retained counsel to defend CFA in the BaganAction.

11 . USFIC is informed and believes, and upon such information and belief alleges, thata tender for the defense of the claims against CFA in the Bagan Action was made to I l l inois Unionunder the I l l inois Union CFA Policy. USFIC is informed and believes, and upon such informationand belief alleges, that Illinois Union has not retained counsel to defend CFA or agreed toparticipate in the defense of CFA though counsel retained by USFIC.

12. USFIC is incurring an increasing amount in the defense of CFA in the BaganAction. USFIC requested contribution f rom I l l inois Union for an equitable share of the cost ofdefense. I l l inois Union refused, and continues to refuse, to reimburse USFIC for an equitableshareof fees and costs being incurred in the defense o f CFA in the Bagan Action.

The Bay Ac t ion13. USFIC is informed and believes, and on the basis of this informafion and belief

alleges, that the Bay Action alleged, in relevant part, that Towne Ranch Associates and BennettDevelopment, Inc. (collectively "Towne Ranch") acted as developers and/or general contractorsfor the construction o f multiple single farnily homes; that these single family homes suffered fromnunierous and diverse constmction defects and deficiencies; that these defects and deficienciescaused or contributed to continuous and progressive damage to plaintiffs' real and personalproperty; and that Towne' Ranch was liable to plaintiffs for the aforementioned damages undertheories of, inter alia, strict liability and negligence.

14. USFIC is infonned and believes, and on the basis of this informafion and beliefalleges, that Towne Ranch filed a cross-complaint in the Bay Action for, inter alia, implied

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indemnity and breach of contract against various subcontractors involved in the construction o f thesubject properties, including CFA. USFIC is informed and believes, and upon such informationand belief alleges, that the cross-complaint averred, in relevant part, that the work of the cross-defendants, including CFA, caused or contributed, in whole or in part, to the damage to real andpersonal property alleged in the Bay Action.

15. USFIC is informed and believes, and upon such information and belief alleges, thatCFA worked as a fireplace subcontractor in connection w i th the construction of certain singlefamily homes at issue in the Bay Action.

16. USFIC received nofice of the Bay Action. USFIC is defending CFA under theUSFIC CFA Policy under a reservation of rights and retained counsel to defend CFA in the BayAc t ion .

17. USFIC is informed and believes, and upon such infomiation and belief alleges, thata tender for the defense of the claims against CFA in the Bay Acfion was made to I l l inois Unionunder the Illinois Union CFA Policy. USFIC is informed and believes, and upon such informationand belief alleges, that Illinois Union has not retained counsel to defend CFA or agreed toparticipate in the defense of CFA though counsel retained byUSFIC.

18. USFIC is incurring an increasing amount in the defense of CFA in the Bay Action.USFIC requested contribution f rom Illinois Union for an equitable share of the cost of defense.I l l inois Union refused, and continues to refiise, to reimburse USFIC for an equitable share of feesand costs being incurred in the defense o f CFA in the Bay Action.

The Garvey Action19. USFIC is informed and believes, and on the basis of this information and belief

alleges, that the Garvey Action alleged, in relevant part, that Centex Homes, Inc. developed,constructed, improved, converted and/or sold multiple single family homes; that these singlefamily homes suffered f rom numerous and diverse constmction defects and deficiencies; that thesedefects and deficiencies caused or contributed to continuous and progressive damage to plaintiffs'real and personal property; and that Centex Homes, Inc. was liable to plaintiffs for the

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aforementioned damages under theories of, inter alia, strict liability and neghgence.20. . USFIC is informed and believes, and on the basis of this infomiation and belief

alleges, that Centex Homes filed a cross-complaint in the Garvey Action for, inter alia, equitableindemnity and breach of contract against various subcontractors involved in the construction ofthesubject properties, including Blazona. USFIC is infonned and believes, and upon suchinfonnation and belief alleges, that the cross-complaint averred, in relevant part, that the work ofthe cross-defendants, including Blazona, caused or contributed, in whole or in part, to the damageto real and personal property alleged in the Garvey Action.

2 1 . USFIC is informed and believes, and upon such infomiation and belief aUeges, thatBlazona worked as a concrete subcontractor in connection with the construction of certain singlefamily homes at issue in the Garvey Action.

22. USFIC received notice of the Garvey Action. USFIC is defending Blazona underthe USFIC Policy No. SHO 10561-01 under a reservation of rights and retained counsel to defendBlazona in the Garvey Action.

23. USFIC is informed and believes, and upon such infonnation and belief alleges, thata tender for the defense of the claims against Blazona in the Garvey Action was made to IllinoisUnion under the Illinois Union Blazona Policy. USFIC is informed and believes, and upon suchinfonnation and belief alleges, that I l l inois Union has not retained counsel to defend Blazona oragreed to participate in the defense of Blazona though counsel retained by USFIC.

24. USFIC is incurring an increasing amount in the defenseof Blazona in the GarveyAction. USFIC requested contribution f rom Illinois Union for an equitable share of the cost ofdefense. I l l inois Union refused, and continues to refuse, to reimburse USFIC for an equitableshare of fees and costs being incurred in the defense o f Blazona in the Garvey Action.

The Soria Action25. USFIC is informed and beUeves, and on the basis of this information and belief

alleges, that the Soria Action alleged, in relevant part, that Meritage Homes of NorthemCalifomia, Inc. and Meritage Homes of CaUfomia, Inc. (collectively "Meritage Homes")

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developed a single family home; that this single family home suffered f r o m numerous and diverseconstmction defects and deficiencies; that these defects and deficiencies caused or contiibuted tocontinuous and progressive damage to plaintiffs real and personal property; and tiiat MeritageHomes was liable to plaintiff for the aforementioned damages under theories of, inter alia, strictliability and negligence.

26. USFIC is informed and believes, and on the basis of this information and beliefalleges, that Meritage Homes filed a cross-complaint in the Soria Action for, inter alia, equitableindemnity and breach of contract against various Roe subcontractors involved in the constructiono f the subject property, including Blazona as Roe 3. USFIC is informed and believes, and uponsuch information and belief alleges, that the cross-complaint averred, in relevant part, that thework of the cross-defendants, including Blazona, caused or contributed, in whole or in part, to thedamage to real and personal property alleged in the Soria Action.

27. USFIC is informed and believes, and upon such information and belief alleges, thatBlazona worked as a concrete subcontractor in connection w i th the construction of the singlefamily home at issue in the Soria Action.

28. USFIC received notice of the Soria Action. USFIC is defending Blazona under theUSFIC Policy No. SHO 10561-01 under a reservation of rights and retained counsel to defendBlazona in the Soria Action.

29. USFIC is informed and believes, and upon such information and belief alleges, thata tender for the defense of the claims against Blazona in the Soria Action was made to IllinoisUnion under the Illinois Union Blazona Policy. USFIC is informed and believes, and upon suchinformation and belief alleges, that UUnoisUnion has not retained counsel to defend Blazona pr

agreed to participate in the defense o f Blazona though counsel retained byUSFIC.30. USFIC is incurring an increasing amount in the defense of Blazona in the Soria

Action. USFIC requested contribution firom Illino is Union for an equitable share of the cost ofdefense. I l l inois Union refused, and continues to refuse, to reimburse USFIC for an equitableshare of fees and costs being incurred in the defense o f Blazona in the Soria Action.

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The Romero Ac t ion3 1. USFIC is infonned and believes, and on the basis of this information and belief

alleges, that the Romero Action alleged, in relevant part, that MoiTison Homes, Inc. ("MorrisonHomes") developed, constructed, improved, converted and/or sold multiple single family homes;that these single famUy homes suffered from numerous and diverse construction defects anddeficiencies; that these defects and deficiencies caused or contributed to continuous andprogressive damage to plaintiffs' real and personal propeity; and that Morrison Homes was liableto plaintiffs for the aforementioned damages under theories of, inter alia, strict liability andnegligence.

32. USFIC is informed and beUeves, and on the basis of this information and beliefaUeges, that Morrison Homes filed a cross-complaint in the Romero Action for, inter alia,equitable indemnity and breach of contract against various subcontractors involved in theconstruction of the subject properties, including Remington. USFIC is infonned and believes, andupon such information and belief alleges, that the cross-complaint averred, in relevant part, that thework of the cross-defendants, including Remington, caused or contributed, in whole or in part, tothe damage to real and personal property alleged in the Romero Action.

33. USFIC is informed and believes, and upon such infomiation and belief alleges, thatRemington worked as a framing subcontractor in connection w i t h the constmction of certain singlefamily homes at issue in the Romero Action.

34. USFIC received notice of the Romero Action. USFIC is defending Remingtonunder the USFIC Policy No. SHO 10293-02 under a reservation of rights and retained counsel todefend Remington in the Romero Action.

35. USFIC is informed and believes, and upon such infonnation and belief alleges, thata tender for the defense of the claims against Remington in the Romero Action was made toIll inois Union under the Illinois Union Remington Policy.- USFIC is informed and believes, andupon such information and belief alleges, that Ill inois Union has not retained counsel to defendRemington or agreed to participate in the defense of Remington though counsel retained by

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USFIC.36. USFIC is incurring an increasing amount in the defense of Remington in the

Romero Action. USFIC requested contribution firom Ill inois Union for an equitable share of thecost of defense. Illinois Union refused, and continues to refuse, to reimburse USFIC for anequitable share of fees and costs being incurred in the defense o f Remington in the Romero Action.

TheAppel Ac t ion37. USFIC is informed and believes, and on the basis of this information and belief

alleges, that the Appel Action alleged, in relevant part, that Atherton Homes, LLC, AthertonWoodward Partners, LLC, Atherton-Boyce Development Co., LLC, Bianchi Ranch BuildingPartners, L L C , Bianchi Ranch Partners, L L C , Emerald Glen Partners, L L C , and Woodward ParkDevelopment Co., LLC (collectively "Atherton Homes") acted as developers and/or generalcontractors for the construction of multiple single family homes; that these single family homessuffered f r om numerous and diverse constmction defects and deficiencies; that these defects anddeficiencies caused or contributed to continuous and progressive damage to plaintiffs' real andpersonal property; and that Atherton Homes was liable to plaintiffs for the aforementioneddamages under theories of, inter alia, strict products liability and negligence.

38. USFIC is informed and believes, and on the basis ofthis information and beliefalleges, that Bianchi Ranch Building Partners, L L C , Bianchi Ranch Partners, L L C , Emerald GlenPartners, L L C , Atherton-Boyce Development, L L C , Woodward Park Development Co., L L C , andMichael W. Atherton Development dba Atherton Homes, L L C (collectively "Atherton Homes")filed a cross-complaint in the Appel Action for, inter alia, implied equitable indemnity and breacho f contract against various subcontractors involved in the constmction of the subject properties,including Shorey. USFIC is informed and believes, and upon such information and belief alleges,that the cross-complaint averred, in relevant part, that the work of tiie cross-defendants, includingShorey, caused or contributed, in whole or in part, to the damage to real and personal propertyalleged in the Appel Action.

39. USFIC is informed and beUeves, and upon such information and belief alleges,' that

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Shorey worked as a framing subcontractor in connection with the constmction of certain singlefamily homes at issue in the Appel Action.

40. USFIC received notice of tiie Appel Action. USFIC is defending Shorey under theUSFIC Shorey Policy under a reservation of rights and retained counsel to defend Shorey in theAppel Ac t ion .

4 1 . USFIC is informed and believes, and upon such information and beUef aUeges, thata tender for the defense of the claims against Shorey in the Appel Action was made to I l l inoisUnion under the I l l inois Union Shorey Policy. USFIC is informed and believes, and upon suchinformation and belief alleges, that Illinois Union has not retained counsel to. defend Shorey oragreed to participate in the defense of Shorey though counsel retained by USFIC.

42. USFIC is incurring an increasing amount in the defense of Shorey in the AppelAction. USFIC requested contribution from Illinois Union for an equitable share of the cost ofdefense. I l l inois Union refused, and continues to refuse, to reimburse USFIC for an equitableshare of fees and costs being incurred in the defense of Shorey in the Appel Action.

The Drumm Action43. USFIC is inforriied and believes, and on the basis of this information and belief

alleges, that the Drumm Action alleged, in relevant part, that Greystone Homes, Inc. ("Greystone")acted as developer and/or general contractor for the constmction of multiple single f am i ly homes;that these single family homes suffered f rom numerous and diverse consti'uction defects anddeficiencies; that these defects and deficiencies caused or contributed to continuous andprogressive damage to plaintiffs' real and personal property; and that Greystone was liable toplaintiffs for the aforementioneddamages under theories of, inter alia, strict products liability andnegligence.

44. USFIC is informed and believes, and on the basis of this information and beliefalleges, that Greystone filed a cross-complaint in the Drumm Action for, inter alia, equitableindemnity and breach of contract against various subcontractors involved in the construction of thesubject properties, including MidCal . USFIC is informed and believes, and upon such information



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and belief alleges, that the cross-complaint averred, in relevant part, that the work of the cross-defendants, including MidCal , caused or contributed, in whole or in part, to the damage to real andpersonal property alleged in the Drumm Action.

. 45. USFIC is informed and believes, and upon such infonnation and belief alleges, thatMidCal worked as a drywall subcontractor in connection w i th the construction of certain singlefamily homes at issue in the Drumm Action.

46. USFIC received notice of the claims against MidCal in the Drumm Action. USFICis defending MidCal under the PoUcy SHO 10998-01, under a reservation of rights and retainedcounsel to defend MidCal in the Drumm Action.

47. USFIC is informed and believes, and upon such information and belief alleges, thata tender for the defense of the claims against MidCal in the Drumm Action was made to I l l inoisUnion under the lUinois Union MidCal Policy. USFIC is informed and believes, and upon suchinformation and belief alleges, that I l l inois Union has not retained counsel to defend MidCal oragreed to participate in the defense o f MidCal though counsel retained by USFIC.

48. USFIC is incurring an increasing amount in the defense of MidCal in the DrummAction. USFIC requested contribution f r om UUnois Union for an equitable share of the cost ofdefense. I l l inois Union refused, and continues to refuse, to reimburse USFIC for an equitableshare of fees and costs being incurred in the defense o f MidCal in the Drumm Action.

The Ortiz Action49. USFIC is informed and believes, and on the basis of this information and belief

alleges, that the Ortiz Action alleged, in relevant part, that Bright Development acted as developerand/or general contractor for the construction of multiple single family homes; that these singlefamily homes suffered from numerous and diverse constmction defects and deficiencies; that thesedefects and deficiencies caused or contributed to continuous and progressive damage toplaintiffs'real and personal property; and that Bright Development was liable to plaintiffs for theaforementioned damagesunder theories of, inter alia, strict products liability and negligence.

50. USFIC is informed and believes, and on the basis of this information and belief

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alleges, that Bright Developnient filed a cross-complaint in the Ortiz Action for, inter olio,equitable indemnity and breach of contract against various Roe subcontractors involved in theconstruction of the subject properties, including MidCal as Roe 15 and Odom & Sons as Roe 17.USFIC is informed and believes, and upon such infomiation and belief alleges, that the cross-complaint avened,'in relevant part, that the work of the cross-defendants, including MidCal andOdom & Sons, caused or contributed, in whole or in part, to the damage to real and personalproperty alleged in the Ortiz Action.

5 1. USFIC is infomied and believes, and upon such infonnation and belief alleges, thatMidCal worked as a drywall subcontractor and Odom & Sons worked as a framing subcontractorin connection w i t h the construction of certain single family homes at issue in the Ortiz Action.

52. USFIC received notice of the Ortiz Action. USFIC is defending MidCal and Odom& Sons.under the USFIC MidCal Policies and USFIC Odom & Sons PoUcies, respectively, undera reservation of rights and retained counsel to defend MidCal and Odom & Sons in the OrtizAction.

53. USFIC is informed and believes, ahd upon such information and belief alleges, thata tender for the defense of the claims against MidCal and Odom & Sons in the Ortiz Action wasmade to Ill inois Union under the Illinois Union MidCal Policy and Illinois Union Odom & SonsPolicy, respectively. USFIC is informed and believes, and upon such information and beliefalleges, that Ill inois Union has not retained counsel to defend MidCal and Odom & Sons or agreedto participate in the defense of MidCal and Odom & Sons though counsel retained by USFIC.

54. USFIC is incurring an increasing amount in the defense of MidCal and Odom &Sons in the Ortiz Action. USFIC requested contribution from Illinois Union for an equitable shareofthe cost of defense. Ill inois Union refiised, and continues to refuse, to reimburse USFIC for anequitable share of fees and costs being incurred in the defenseof MidCal and Odom & Sons in theOrtiz Action.



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The L i Action55. USFIC is informed and .believes, and on the basis of this inforniation and belief

alleges, that the Li Action alleged, in relevant part, that Riclunond America acted as developerand/or general contractor for the constmction of multiple single family homes; that these singlefamily homes suffered f rom numerous and diverse construction defects and deficiencies; that thesedefects and deficiencies caused or contributed to continuous and progressive damage toplaintiffs'real and personal property; and that Richmond America was liable to plaintiffs for theaforementioned damages under theories of, inter alia, strict products liability and negligence.

56. USFIC is informed and beUeves, and on the basis of this information and beliefalleges, that Richmond America filed a cross-complaint in the L i Action for, inter alia, equitableindemnity and breach of contract against various Roe subcontractors involved in the constructionof the subject properties, including Rogers Grading. USFIC is informed and believes, and uponsuch information and belief alleges, that the cross-complaint averred, in relevant part, that thework o f the cross-defendants, including Rogers Grading, caused or contributed, in whole or in part,to the damage to real and personal property alleged ia the L i Action.

57. USFIC is infomied and believes, and upon such information and belief alleges, thatRogers Grading worked as a fmish grader in connection w i t h the construction of certain singlefamily homes at issue in the L i Action.

58. USFIC received notice of the L i Action. USFIC is defending Rogers Gradingthrough the USFIC Rogers Grading Policies, under a reservation of rights and retained counsel todefend Rogers Grading in the L i Action.

59. USFIC is infomied and believes, and upon such information and belief aUeges, thata tender for the defense ofthe claims against Rogers Grading in the L i Action was made to Ill inoisUnion under the Illinois Union Rogers Grading Policy. USFIC is informed and believes, and uponsuch information and belief alleges, that Ill inois Union has not retained counsel to defend RogersGrading or agreed to participate in the defense of Rogers Grading through counsel retained byUSFIC.

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60. USFIC is incurring an increasing amount in the defense of Rogers Grading in the LiAction. USFIC requested contribution f rom Illinois Union for an equitable share of the cost ofdefense. I l l inois Union refused, and continues to refuse, to reimburse USFIC for an equitableshare of fees and costs being incurred in the defense of Rogers Grading in the L i Action.

F I R S T C A U S E O F A C T I O ND E C L A R A T O R Y R E L I E F

(Duty to Defend)

6 1. USFIC hereby incorporates the allegations contained in paragraphs 1 tiirough 60,inclusive, as though ful ly set forth herein.

62 . USFIC is infonned and believes, and on the basis of this infonnation and beliefalleges, that DEFENDANTS are contractually obligated to provide a defense to CFA in comiectionw i t h the Bagan Action and the Bay Action, Blazona ia connection with the Garvey Action and theSoria Action, MidCal in connection w i th the Drumm Action and Ortiz Action, Odom & Sons inconnection w i th the Ortiz Action, Remington in connection w i th the Romero Action, Shorey inconnection w i th the Appel Action, and Rogers Grading in connection w i th the L i Action, pursuantto the terms of their respective policies o f insurance.

63 . USFIC is infomied and believes, and on the basis of this information and beliefalleges, that DEFENDANTS dispute the foregoing contention. As of the date of this complaint,DEFENDANTS have refiised to acknowledge their confractual obligations to defend CFA in theBagan Action and the Bay Action, Blazona in the Garvey Action and the Soria Action, MidCal inthe Drumm Action and Ortiz Action, Odom & Sons in the Ortiz Action, Remington in the RomeroAction, Shorey in the Appel Action, and Rogers Grading in theL i Action.

64 . An actual controversy has arisen and now exists between USFIC andDEFENDANTS conceming DEFENDANTS' rights, duties and obligations under tiieir insurancepolicies in connection w i th the defense of CFA against the claims asserted in the Bagan Actionand the Bay Action, Blazona against the claims asserted in tiie Garvey Action and the SoriaAction, MidCal against the claims asserted in the Drumm Action and Ortiz Action, Odom &Sons

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against the claims asserted in the Ortiz Action, Remington against the claims asserted in theRomero Action, Shorey against the claims asserted in the Appel Action, and Rogers Gradingagainst the claims asserted in the Li Action. USFIC contends, and on information and beliefDEFENDANTS deny, that DEFENDANTS owed duties to defend CFA in connection with tiieBagan Action and the Bay Action, Blazona in connection w i t h the Garvey Action and the SoriaAction, MidCal in connection w i t h the Drumm Action and Ortiz Action, Odom & Sons inconnection w i th the Ortiz Action, Remington in connection w i th the Romero Action, Shorey inconnection w i th the Appel Action, and Rogers Grading in connection w i th the L i Action.

65. USFIC desires a judicial determination w i t h respect to the rights, duties andobligations under the parties' respective policies of insurance. Such a determination is necessaryand appropriate at this time in order that the parties may ascertain their rights, duties andobligations to each other.

66. USFIC expressly reserves all rights to assert a cause of action for declaratory reliefon the duty to indemnifyw i th respect to the Underlying Actions should it become wan'anted.

S E C O N D C A U S E O F A C T I O NE Q U I T A B L E C O N T R I B U T I O N

67. USFIC hereby incorporates the allegations contained in paragraphs 1 through 66,inclusive, as though fu l ly set forth herein.

68. USFIC contends that DEFENDANTS failed and refiised to pay their equitableshares of the defense of CFA in the Bagan Action and the Bay Action, Blazona in the GarveyAction and the Soria Action, MidCal in the Drumm Action and Ortiz Action, Odom & Sons in theOrtiz Action, Remington in the Romero Action, Shorey in the Appel Action, and Rogers Gradingin the Li Action. USFIC further contends DEFENDANTS' failure and refiisal to pay theirequitable shares of the defense of CFA in the Bagan Action and the Bay Action, Blazona in theGarvey Ac t ion and the Soria Action, MidCal in the Drumm Action and Ortiz Action, Odom &Sons in the Ortiz Action, Remington in the Romero Action, Shorey in the Appel Action, andRogers Grading in the L i Action, is resulting in USFIC's payment of more than its equitable share

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o f the defense of CFA in the Bagan Action, Blazona in the Garvey Action and the Soria Action,MidCal in the Drumm Action and Ortiz Action, Odom & Sons in the Ortiz Actjon, Remington inthe Romero Action, Shorey in the Appel A ction, and Rogers Grading in the L i Action.

69. DEFENDANTS have an obligation to equitably contribute towards al l fees, costs,and expenses incuired to defend CFA in the Bagan Action and the Bay Action, Blazona in theGarvey Action and the Soria Action, MidCal in the Drumm Action and Ortiz Action, Odom &Sons in the Ortiz Action, Remington in the Romero Action, Shorey in the Appel Action, andRogers Grading in the-/,/Action.

70. USFIC desires a judicial determination of the equitable shares owed byD EFEN D AN TS under their respective insurance policies towards the total amounts incun-ed byUSFIC to defend CFA in connection w ith the Bagan Action and the Bay Action, Blazona inconnection w ith the Garvey Action and the Soria Action, MidCal in connection w ith the DrummAction and Ortiz Action, Odom & Sons in connection w ith the Ortiz Action, Remington inconnection w ith the Romero Action, Shorey in connection w ith the Appel Action, and RogersGrading in connection w ith the L i Action.

71. A j u d i c i a l declaration as to DEFENDANTS' equitable shares o f defense costs o fCFA in the Bagan Action and-the Bay Action, Blazona in the Garvey Action and the Soria Action,MidCal in the Drumm Action and Ortiz Action, Odom & Sons in the Ortiz Action, Remington inthe Romero Action, Shorey in the Appel Action, and Rogers Grading in the L i Action, is necessaryand appropriate in order fo r USFIC to ascertain D E F E N D A N T S ' defense obligations. USFICseeks a judicial declaration regarding equitable contribution by DEFENDANTS towards thedefense fees and costs paid by USFIC on behalf of CFA in the Bagan Action and the -Bay Action,Blazona in the Garvey Action and the Soria Action, MidCal in the Drumm Action and OrtizAction, Odom & Sons in the Ortiz Action, Remington in the Romero Action, Shorey in the AppelAction, and Rogers Grading in the L i Action.

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72. USFIC contends it is entitled to equitable reimbursement frorn DEFENDANTS forthe defense costs incuned on behalf of CFA in the Bagan Action and the Bay Action, Blazona inthe Garvey Action and the Soria Action, MidCal in the Drumm Action and Ortiz Action, Odom &Sons in the Ortiz Action, Remington in the Romero Action, Shorey in the Ajjpel Action, andRogers Grading in the L i Action, according to proof

73. USFIC expressly reserves aU rights to assert a cause of action for equitablecontribution for indemnity w i th respect to the Underlying Actions should it becomes warranted.

PRAYER FOR RELIEFWHEREFORE, USFIC prays for judgment as follows:1. On the First Cause of Action, for a declaration that Ulinois Union, and each Doe

Defendant, have a duty to provide a defense to CFA in connection w i th the Bagan Action and theBay Action, Blazona in connection w i th the Garvey Action and the Soria Action, MidCal inconnection w i t h the Drumm Action and Ortiz Action, Odom & Sons in connection w i th the OrtizAction, Remington in connection w i th the Romero Action, Shorey in connection w i t h tiie AppelAction, and Rogers Grading in connection w i th the L i Action.

2. On the Second Cause of Action, for an equitable order and declaration ofthis court,detennining the specific amounts of reimbursement owed by Illinois Union and each DoeDefendant to USFIC in relafion to all fees, costs, and expenses incurred by USFIC in connectionw i t h the defense of CFA in the Bagan Action and the Bay Action, Blazona in the Garvey Actionand the Soria Action, MidCal in the Drumm Action and Ortiz Action, Odom & Sons in the OrtizAction, Remington in the Romero Action, Shorey in the Appel Action, and Rogers Grading in theL i Action.

3. For USFIC's costs of suit incurred herein;4. For pre-judgment and post-judgment interest;



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5.6.

DATED:

For attomey fees incurred to pursue this action; andFor aU such other and further relief as the court may deem just and proper.

2011

DATED:

25930\564903

2011

BOORNAZIAN, JENSEN & GARTHEA Professional Corporation

By: THOMAS E. MULVIHILL, ESQ.f AJvdIKO A. D U N H A M , ESQ.MITOSHI H . FUJIO-WHITE, ESQ.Attomeys forPlaintiffUSF INSURANCE COMPANY

GILL & RHOADES, LLP

By: SUSAN J. GILL, ESQ.JULIE RI-IOADES, ESQ.Attomeys for PlaintiffUSF INSURANCE COMPANY



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5. For attorney fees incurred to pursue this action; and6. For all such other and further relief as the court may deem just and proper.

DATED: _,20l I

DATED: , 2 0 1 :

25930X564903

BOORNAZIAN, JENSEN & GARTHEA Professional Corporation

By: THOMAS E. MU LV IH ILL, ESQ.TAMIKO A. DUNHA M, ESQ.MITOSHI l - I . FUJIO-WHITE, ESQ.Attorneys for PlaintiffUSF INSURANCE COMPANY

GILL & RHOADES, LLP

By: SUSAN J./GILL, ESQ.JUUE RHfflADES, ESQ.AttomeyV for PlaintiffUSF INSURANCE COMPANY

-20-Complainl for Declaratory Relief and liquitablc Conlribiition

Documents

USF INSURANCE COMPANY v. ILLINOIS UNION INSURANCE COMPANY 34-2011-00116267 Complaint