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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

ACE American, Illinois Union Among 43 Insurers Entangled in Suit

December 17th, 2012 - The liability carrier for a homebuilder being sued for construction negligence has sued a sizable minority of the nation’s liability insurers in an effort to bring their defense and indemnity into the suit.

St. Paul Mercury Insurance Co. filed suit in U.S. District Court in Sacramento, California, against ACE Group units ACE American Insurance Co. and Illinois Union Co. St. Paul’s complaint named 41 other defendants, among them Zurich American Insurance Co., Chartis Specialty Insurance Co., Allied Insurance Co., Hartford Fire Insurance Co. and Lloyds’s of London.

All of the insurers had issued liability policies for plumbers, masons, flooring contractors, carpenters and other construction firms that were involved in the Twelve Bridges master planned community in Lincoln, California. That was a 77-home project spread out over four subdivisions developed by Parkland Homes. St. Paul had issued a general commercial liability policy to Amundson-Singh Landscaping Inc., with Parkland Homes as an additional insured.

Buyers of those homes filed suit in California state court in 2010 against Parkland Homes, alleging products liability, breach of contract, negligence, and violation of state building standards, among other claims.

Parkland Homes tendered its defense to St. Paul, and also to the 43 insurers that had sold policies to the various building contractors. According to the complaint, however, all of the firms with the exception of St. Paul have either denied or refused to respond to Parkland Homes’ tenders.

In its complaint, St. Paul said its fellow insurers have a duty to defend and/or indemnify Parkland Homes against claims raised in the homeowners’ lawsuit. It said the companies have a duty to pay their fair and proportionate share of the costs of defense and/or indemnification incurred on behalf of Parkland Homes.

The suit did not specify damages.

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