Unreported / Non-Citable
Background
Colony Insurance Company insured Rivera Construction, Inc. under a commercial general liability policy. In January 2021, Shane Garst purchased a property in Carlsbad, California, and hired Rivera to perform remodeling and improvement tasks. Rivera began work on July 26, 2021, and completed it on July 8, 2022. While the work was underway, Garst entered a purchase agreement with Winthrop Cramer to sell the property; on August 27, 2022, Cramer notified Garst of construction deficiencies, and in January 2023 Cramer initiated the underlying state-court proceeding. Colony denied Garst coverage in October 2024; after Garst asked Colony to reconsider in July 2025, Colony reaffirmed the denial on September 4, 2025. On August 27, 2025, Colony filed this federal action seeking declarations under 28 U.S.C. §§ 2201, et seq., that it owed Garst neither a duty to defend nor a duty to indemnify in the underlying action.
The policy's scheduled person or organization endorsement amended the 'Who Is An Insured' portion to cover only those additional insureds required by a written contract with Rivera that the parties executed before the commencement of the work called for in the contract. Garst answered and filed counterclaims, then moved for partial summary judgment on three questions: whether a written contract existed between Garst and Rivera under California law, whether Garst qualified as an additional insured, and whether Colony owed a duty to defend. Colony cross-moved for summary judgment on both of its declaratory-judgment claims. Garst relied on a 604-page compilation of emails, invoices, and receipts dated May 28, 2021 through June 6, 2025, plus Rivera's July 28, 2021 request to its insurance broker for a certificate naming Garst as an additional insured and the resulting certificate stating Garst was named per written contract.
The Court’s Holding
The court denied Garst's motion for partial summary judgment and granted Colony's motion for summary judgment. Interpreting the endorsement under California law, the court identified four requirements for Garst to qualify as an additional insured: a written contract executed by the parties, executed prior to the commencement of work, defining the scope of the work to be performed, and contractually requiring Rivera to add Garst as an additional insured. Assuming without deciding that the 604-page compilation could constitute a written contract, the court found it failed at least two requirements. Its review of all 604 pages uncovered no language explicitly obligating Rivera to identify Garst as an additional insured. Invoice line items for '4% Liability Insurance' could merely pass through Rivera's insurance costs, and Rivera's email to its broker showed only what Rivera asked the broker to do, not what a written contract compelled Rivera to do; the resulting certificate likewise did not establish that any written contract existed or was provided to the broker.
The timing requirement independently defeated coverage. The evidence showed Rivera commenced work on July 26, 2021. At the motion hearing, Garst conceded that Rivera commenced work by July 26, 2021, at the latest, and Garst's counsel stated that the compilation was executed on July 28, 2021. The court therefore concluded that even if the compilation qualified as a written contract, it was not executed prior to the commencement of work. Because Garst did not qualify as an additional insured, the court declared that Colony had no duty to defend or indemnify Garst in the underlying action. The court did not decide whether the compilation was executed by the parties or adequately defined the work's scope, and it expressly declined to reach Colony's alternative argument that damages occurring after Rivera completed its work were excluded from coverage.
Key Takeaways
- An additional-insured certificate and the contractor's request for that certificate did not prove that a written contract required the contractor to procure the coverage.
- Invoice line items for liability insurance did not explicitly obligate Rivera to name Garst as an additional insured under the policy.
- Garst's concessions that Rivera began work by July 26, 2021, and that the compilation was executed on July 28, 2021, independently prevented it from satisfying the endorsement's pre-work execution requirement.
- The court resolved both the duty to defend and the duty to indemnify in a single ruling without reaching Colony's separate argument concerning damages arising after Rivera completed its work.
- The court did not decide whether the compilation was executed by the parties or adequately defined the work's scope, leaving those endorsement requirements unresolved.
Why It Matters
The decision applies a demanding, text-centered approach to additional-insured endorsements under California law: evidence that insurance was requested, charged for, or documented by a broker does not substitute for contractual language explicitly requiring the named insured to provide coverage. It also shows how the timing of execution can independently defeat additional-insured status even when a court assumes that a collection of business records amounts to a written contract. By granting Colony's motion while denying Garst's partial motion, the court resolved both the duty to defend and the duty to indemnify in one ruling, while expressly declining to reach Colony's alternative post-completion-damages argument.