Stryker v. Steadfast Insurance CA3

Filed 3/7/22 Stryker v. Steadfast Insurance CA3 NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento) ---- GERALDA STRYKER et al.,

Plaintiffs and Appellants, C089374

v. (Super. Ct. No. 34-2017- 00215121-CU-IC-GDS) STEADFAST INSURANCE COMPANY,

Defendant and Respondent.

After homeowners 1 in a Sacramento County residential development won a judgment against the developer of their homes for over $4 million, they sued Steadfast Insurance Company (Steadfast), the developer’s insurer, alleging Steadfast had a duty to defend and indemnify the developer in the underlying lawsuit, and that, as judgment creditors and assignees of the developer, homeowners were entitled to recover from Steadfast. The trial court entered summary judgment in favor of Steadfast, ruling the company had no duty to defend or indemnify the developer in the underlying lawsuit because the developer never paid the “self-insured retention” (also known as an SIR),

1 Plaintiffs include Geralda Stryker, Harrison Kim, Stacy Fox, Sandra Fox, Regina Edwards, Edward J. Broussard, Sr., La Verne Broussard, Joseph T. Chiang, Gulnara G. Chiang, Chionye Ugori, Obiakonw A. Ugori, William Baumann, Ruthi Baumann, Donald Mills, Anzel L. Mills, Abran S. Mathews, Tony R. Melton, Danielle Melton, Randall J. Martin, Alberto Chaparro, Dalia Chaparro, Sean D. Jones, Jill M. Okimoto, Donald A. Fisher, Joseph Hahnz, Donna M. Lane, Dwayne P. Scheer, Marth Scheer, Chad Wilson, Chen Li, Ping Gu, Michael Bliton, and Ghassan I. Kamal.

1

a condition precedent to Steadfast’s obligations to the developer under a Home Builders Protective Insurance Policy (the policy). On appeal, homeowners argue satisfaction of the self-insured retention was not a condition precedent. We conclude the relevant policy language does not expressly provide that satisfaction of the self-insured retention was a condition precedent to Steadfast’s obligations to the developer in connection with the underlying lawsuit. Accordingly, we will reverse the judgment. BACKGROUND A December 2009 lawsuit by multiple homeowners alleged defective construction of their homes by developers Cambridge (Natomas), LP, and Cambridge Communities, LLC (Cambridge). Cambridge was insured by Steadfast under a policy that included a self-insured retention of $1 million per occurrence. After a June 2014 bench trial for which Cambridge did not appear, the trial court entered judgment against Cambridge for over $4 million. In 2017, the homeowners filed the instant action against Steadfast, alleging the company had a duty to defend and indemnify Cambridge in the underlying lawsuit, and that, as judgment creditors and assignees of Cambridge, they were entitled to recover from Steadfast a significant balance that remained on the 2014 judgment. They asserted multiple causes of action, the specifics of which are immaterial to this appeal. Steadfast moved for summary judgment, arguing as a matter of law that it never had to defend or indemnify Cambridge because Cambridge never paid the self-insured retention, a condition precedent to coverage. The homeowners opposed summary judgment, arguing that payment of the self-insured retention was not a condition precedent to coverage. Under a heading titled “SECTION I – COVERAGES” the policy explains that Steadfast “will pay those sums that the insured becomes legally obligated to pay as damages because of ‘property damage’ to ‘your work’. [Steadfast] will have the right