Defendant insurer denied coverage for plaintiff insured, an engineering consulting firm, for a personal injury suit by a construction worker at the plant of the insured’s client. The Superior Court of Santa Clara County, California, finding no duty to defend, entered judgment for the insurer in the insured’s action for breach of contract and breach of the implied covenant of good faith and fair dealing. The insured appealed.
The court held that the trial court mischaracterized the extrinsic evidence as undisputed and applied a professional services exclusion in the commercial general liability (CGL) so broadly that the exception swallowed the rule. The defense had a business law attorney engage in pretrial civil discovery and propounded special interrogatories. The facts available to the insurer at the time it denied a duty to defend presented a plausible, well-supported description of the role and actions of an employee of the insured who was at the site as not providing supervisory or engineering services, or any other specialized skill, in relation to accident. That description differed significantly from the trial court’s summation and showed potential liability arising from breach of a common law duty, not from the performance of professional services. The insurer could not conclusively negate the potential for coverage and, therefore, had a duty to defend the insured. The court rejected the argument that, because the employee was only at the site to perform his professional duties, any act of his at the site that resulted in injury arose from a professional service and was covered by the exclusion. There was no error in granting summary adjudication of the insured’s claim for punitive damages.
The court reversed the judgment.
Appellant shareholder sought review of a Superior Court of Los Angeles County (California) decision, after a jury trial, that held her liable to appellee shareholder in appellee’s personal action alleging breach of fiduciary duties. Appellants, attorneys for the corporation, challenged the trial court’s reduction or disallowance of certain asserted costs.
Appellant shareholder challenged a trial court decision that awarded appellee shareholder damages in her individual action alleging breach of fiduciary duties. Appellants, the corporation’s attorneys, challenged the trial court’s reduction or disallowance of certain claimed trial-related costs. The appellate court partially affirmed and partially reversed. Appellee lacked standing to bring an individual action against appellant but instead should have brought a derivative action on behalf of the corporation because the alleged injuries were not a result of a special duty owed to appellee by appellant independent of appellee’s shareholder status. Appellant attorneys were entitled to all Cal. Civ. Proc. Code § 1033.5 reasonable and necessary costs. Appellant attorneys failed to prove, however, the reasonableness or necessity of items not subject to § 1033.5, such as messenger fees, service of process fees, and fees for models, blowups, and photocopies, but did establish that deposition fees were recoverable. Appellant attorneys failed to establish that the trial court committed reversible error by disallowing such costs.
The appellate court partially affirmed and partially reversed a trial court decision in appellee shareholder’s action against appellant shareholder and the corporation’s attorneys. Appellee lacked standing to bring an individual fiduciary breach action against appellant shareholder because a derivative action on behalf of the corporation was needed. The disallowance of certain costs of appellant attorneys was proper because need was not proven.
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