1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 THE TRAVELERS INDEMNITY No. 1:18-cv-00720-DAD-JLT COMPANY OF CONNECTICUT, a 12 Connecticut Corporation, AND THE TRAVELERS PROPERTY CASUALTY 13 COMPANY OF AMERICA, a Connecticut ORDER GRANTING PLAINTIFFS’ MOTION Corporation, FOR SUMMARY JUDGMENT IN PART 14 AND GRANTING DEFENDANT’S CROSS- Plaintiffs, MOTION FOR SUMMARY JUDGMENT IN 15 PART v. 16 (Doc. Nos. 16, 17, 18) HUDSON INSURANCE COMPANY, a 17 Delaware Corporation 18 Defendant. 19 20 This matter is before the court on the parties’ cross-motions for summary judgment. 21 (Doc. Nos. 16, 17, 18.) A hearing on the motions was held on June 18, 2019. Attorney Aaron 22 Agness appeared in person on behalf of plaintiffs, and attorney Stephen Scott appeared in person 23 on behalf of defendant. Having considered the parties’ briefs and oral arguments, and for the 24 reasons set forth below, the court will grant both motions in part. 25 BACKGROUND 26 Plaintiffs The Travelers Indemnity Company of Connecticut (“Travelers Indemnity”) and 27 The Travelers Property Casualty Company of America (“Travelers Property”) (collectively, 28 “Travelers”) and defendant Hudson Insurance Company (“Hudson”) each and separately insured 1 NV5 Holdings, Inc. and Nolte Associates, Inc. (collectively, “Nolte”). (Doc. No. 18-2) (Joint 2 Statement of Undisputed Facts (“JSUF”)) at 2, 4.) Travelers issued Nolte commercial general 3 liability policies, and Hudson issued Nolte a professional services policy. (Id. at 2–4.) While 4 insured under those policies, Nolte, a firm that provides construction management services, was 5 named as a defendant in an underlying state court action stemming from a construction site 6 accident. (Id., Ex. 5.) 7 The present action is an insurance coverage dispute arising from a settlement paid by 8 Travelers on behalf of Nolte in that underlying state court action. Travelers contends that Hudson 9 must reimburse it for the entire settlement amount and half of the defense fees and costs it 10 incurred in defending Nolte in that action, because the allegations against Nolte in that underlying 11 action arose out of Nolte’s professional services. (Doc. No. 18 at 2.) Hudson counters that 12 Travelers’ complaint fails as a matter of law because: (1) Travelers has pled the wrong causes of 13 action; and (2) the events that gave rise to the underlying action against Nolte are not within the 14 scope of the policy that Hudson issued to Nolte. (Doc. No. 17 at 7.) The following facts are 15 relevant to the pending motions.1 16 A. The Underlying Lawsuit and Background Facts 17 1. Nolte’s Construction Management Agreement with the City of Bakersfield 18 On May 20, 2009, Nolte and the City of Bakersfield (the “City”) entered into a 19 construction management agreement (the “CMA”). (JSUF at 4–5 & Ex. 4.) Pursuant to the 20 CMA, Nolte was to “furnish a licensed Civil Engineer as Construction Manager” and to 21 “competently and thoroughly provide Construction Management Services” for the second phase 22 of the City’s planned construction of a six-lane freeway (the “Project”). (Id. at 302, 313; Doc. 23 No. 17 at 7.) These services included “construction observation, materials testing, and contract 24 administration” for the Project, as well as “structural observation services, roadway observation
25 1 The parties have submitted a joint statement of undisputed facts (see JSUF), as well as separate 26 statements of undisputed facts (see Doc. Nos. 17-2, 18-1.) The court will rely on the facts from one party’s separate statement of undisputed facts to the extent that the other party has stipulated 27 in response that the fact is “undisputed.” When citing to a fact from one of the two separate statements of undisputed facts, the court will cite to the docket entry wherein the other party 28 stipulates that the fact is undisputed. (See Doc. Nos. 20-1, 21-4.) 1 services, survey quality assurance, [and] materials testing and support staff, as needed, during the 2 course of the construction.” (JSUF at 313.) As relevant here, the CMA provided that: 3 The Construction Management staff will conduct onsite observations of the work in progress to determine that it is, in general, proceeding 4 in accordance with the Contract Documents. 5 The Construction Management staff shall advise the Contractor whenever they believe that any work is unsatisfactory, faulty or 6 defective or does not conform to the Contract Documents, or has been damaged, or does not meet the requirements of any field 7 observation, test or approval required to be made; and advise the Contractor of work that should be corrected or rejected or should be 8 uncovered for observation, or requires special testing, or approval . . .. Nolte personnel or subconsultants shall provide construction 9 observation, material testing and quality control for the project. Construction observation, material testing and quality control shall 10 conform to the State of California Construction Manual and Material Testing Manual. 11 12 (Id. at 317–318.) The CMA further provided that: 13 Through more extensive onsite observations of the work in progress and field checks by the construction management staff, Nolte shall 14 endeavor to provide further protection for the City against defects and deficiencies in the work of the Contractor; but, the furnishing of 15 such services will not make Nolte responsible for or give Nolte control over construction means, methods, techniques, sequences, or 16 procedures, or for safety precautions or programs, or responsibility for Contractor’s failure to perform the Work in accordance with the 17 Contract Documents. 18 (Id. at 314–15.) Finally, the CMA noted that Nolte’s “tasks shall include all the procedures 19 necessary to properly perform the Construction Management tasks, whether specifically included 20 in the scope of work or not.” (Id. at 302.) 21 2. The Underlying Lawsuit, the Tenders, and the Defense of Nolte 22 Justin Todahl (“Todahl”) was employed as a laborer by one of the contractors working on 23 the Project. (Id. at 5.) On August 28, 2012, Todahl was injured while working on the Project. 24 (Id.) The parties agree that on the date Todahl sustained his injuries, Nolte representatives were 25 at the construction site “for the purpose of providing professional services pursuant to the 26 Construction Management Agreement.” (Id. at 6.) 27 On August 22, 2014, Todahl filed a first amended complaint against Nolte and other 28 defendants in the Kern County Superior Court (the “Todahl action” or the “underlying action”). 1 (Id. at 5.) Therein, Todahl alleged that, on the date of the incident, “a cement truck suddenly and 2 without warning backed into him, crushing his body between the cement truck and paving 3 trough.” (Id.) Todahl asserted a general negligence cause of action against Nolte, alleging that it 4 was “negligent in the selection, hiring, training, education, supervision, management, and 5 retention of [contractors] . . . so as to have actually, legally, and proximately caused [Todahl] to 6 suffer serious injuries.” (Id. at 336.) Todahl alleged that Nolte “had a responsibility to supervise 7 the job and ensure that the job was being performed in a safe manner and in compliance with state 8 and federal regulations[] because [Nolte] . . . w[as] responsible for providing construction 9 management and/or general contractor services for the [Project].” (Id. at 337.) 10 In September 2014, Nolte tendered the Todahl action to Travelers under Travelers’ 11 Comprehensive General Liability Policy and to Hudson under Hudson’s Professional Liability 12 Policy. (Doc. Nos. 20-1 at 17; 21-4 at 6.) Travelers agreed to defend Nolte under a reservation of 13 rights, citing the professional services exclusion in its policy as the basis for its reservation. (Doc. 14 No. 21-4 at 6.) In or around October 2014, Travelers retained defense counsel to defend Nolte in 15 the Todahl action, and it tendered Nolte’s defense to Hudson. (Id.) It appears that sometime 16 thereafter Hudson “closed its file at the request of [Nolte].” (JSUF at 365.) 17 In February 2017, Todahl was deposed. During his deposition, he testified that a Nolte 18 employee or representative instructed him to clean out the paving trough between truckloads of 19 cement. (Doc. No. 21-4 at 5.) Specifically, Todahl testified that: 20 [The Nolte employee] said [the troughs] need to be cleaned out after every truck, if not every two, because that way—and I think he said 21 the same or you did, was so that it could meet the spec—the spec on—the poured concrete because if it wasn’t cleaned out after every 22 one or two trucks, that it would mix with the old concrete with the new concrete and then it would have to be removed. 23 24 (Id. at 6–7.) 25 On September 5, 2017, Travelers retendered its defense of Nolte to Hudson. (JSUF at 6.) 26 On November 2, 2017, Hudson responded to Travelers and acknowledged that the Todahl action 27 was potentially covered under the policy it had issued to Nolte. (Id.; see also id., Ex. 7.) 28 Specifically, Hudson stated that “we have determined that there may be a potential of coverage; 1 however, any such coverage would be excess to Travelers’ policy, so Hudson will participate in 2 the defense and indemnity of [Nolte] subject to a full reservation of rights following the 3 exhaustion of Travelers’ policy.” (JSUF at 347.) On December 13, 2017, Travelers responded to 4 Hudson, contending that “Hudson’s excess coverage position was erroneous” and that “Traveler’s 5 coverage is co-primary with Hudson’s.” (Id. at 353.) Travelers demanded that “Hudson 6 participate in resolution of th[e] claim on a pro-rata basis” given that “th[e] case clearly 7 implicates Hudson’s professional coverage.” (Id.) On February 27, 2018, Hudson informed 8 Travelers that it would participate in a mediation of Todahl’s claim against Nolte scheduled for 9 March 13, 2018. (Id. at 358.) Hudson also asserted that it had no duty to provide coverage 10 because the allegations against Nolte did not arise out of Nolte’s professional services and 11 because its policy’s “actual construction” exclusion precluded coverage. (Id. at 358–59.) Hudson 12 reiterated its position that its coverage was only in excess to Travelers’ primary coverage. (Id. at 13 359.) On March 2, 2018, Travelers responded to Hudson, contending that both policies were 14 primary policies and that, depending on whether the underlying claim is a general liability claim 15 or a professional services claim, either Travelers or Hudson would be responsible for 16 indemnifying Nolte. (Id. at 361.) Travelers reiterated that both insurance carriers “should be 17 participating in the defense on a 50/50 basis unless and until there is a judicial determination as to 18 coverage” because “both carriers have acknowleged [sic] a potential for coverage.” (Id.) On 19 March 9, 2018, Hudson responded to Travelers, maintaining its position that it has no duty to 20 contribute toward any settlement because the underlying claim is not covered by its policy.” (Id. 21 at 365.) Nevertheless, “in order to support [Nolte] and to avoid future coverage litigation,” 22 Hudson offered to “contribute 1/3rd of any settlement offer Travelers[] and Hudson agree to 23 make . . . in return for Travelers’ release of all claims for contribution from Hudson in this case.” 24 (Id.) Hudson also offered to pay one half of all defense fees incurred after September 5, 2017, 25 which is the date when Travelers retendered the Todahl action to Hudson, because “Travelers 26 ha[d] been involved and ha[d] controlled the defense of th[e] case since 2014” and Hudson had 27 ///// 28 ///// 1 closed its file at Nolte’s request. (Id.) Hudson also confirmed that it would attend the March 13, 2 2018 mediation.2 (Id.) 3 On or about April 5, 2018, Travelers settled the Todahl action on behalf of Nolte for 4 $1,300,000.00, with Travelers Indemnity paying the per occurrence limit of $1,000,000.00 under 5 its policy and Travelers Property paying $300,000.00 under its excess policy. (JSUF at 7; see 6 also Doc. No. 21-4 at 8.) Hudson did not contribute toward Nolte’s settlement of the Todahl 7 action. (JSUF at 7.) Travelers also incurred defense fees and costs totaling $137,093.06 in 8 defending Nolte in the Todahl action. (Id.) 9 B. The Insurance Policies 10 1. The Travelers Insurance Policies 11 Plaintiff Travelers Indemnity issued a commercial general liability (“CGL”) insurance 12 policy (insurance policy number 680-6B97547A-TCT-12) to Nolte, with effective dates of May 13 1, 2012 to May 1, 2013 and a per occurrence limit of $1,000,000.00 (the “Travelers policy”). (Id. 14 at 2; Doc. No. 21-4 at 9.) Travelers Indemnity agreed to “pay those sums that [Nolte] becomes 15 legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which 16 th[e] insurance applies.” (JSUF at 94.) However, the Travelers policy “does not apply to: . . . 17 ‘Bodily injury’ or ‘property damage’ arising out of the rendering or failure to render any 18 ‘professional services.’” (Id. at 95, 136.) Under the Travelers policy 19 “Professional services” means any services requiring specialized skill or training, including: . . . [s]upervision, inspection, quality 20 control, architectural, engineering or surveying activity or service, job site safety, construction contracting, construction administration, 21 construction management . . . or monitoring, testing, or sampling service necessary to perform any of the services described . . . above. 22 23 (Id. at 136.) 24 Plaintiff Travelers Property issued a commercial excess liability (or “umbrella”) insurance 25 policy (insurance policy number CUP-6B994065-12-47) to Nolte, with effective dates of May 1, 26 2012 to May 1, 2013 (the “Travelers excess policy”). (Id. at 3.) Pursuant to this policy, Travelers 27 2 At the June 18, 2019 hearing on the pending motion, counsel for Hudson, attorney Scott 28 confirmed that he was present at the March 13, 2018 mediation on behalf of Hudson. 1 Property agreed to “pay on behalf of [Nolte] the ‘ultimate net loss’ in excess of the ‘applicable 2 underlying limit’ which [Nolte] becomes legally obligated to pay as damages because of ‘bodily 3 injury,’ ‘property injury,’ [or] ‘personal injury’ . . . to which this insurance applies.” (Id. at 229.) 4 Like the Travelers policy, the Travelers excess policy excludes claims for “‘[b]odily injury,’ 5 ‘property damage,’ [or] ‘personal injury’ . . . arising out of the rendering or failure to render any 6 ‘professional services.’” (Id. at 230, 265.) The Travelers excess policy contains a definition 7 of “professional services” that is identical to the one found in the Travelers policy. (See id. at 8 265.) 9 2. The Hudson Insurance Policy 10 Defendant Hudson issued an “Architects, Engineers & Environmental Services 11 Professional Liability” insurance policy (insurance policy number AEE72460-04) to Nolte, with 12 the effective dates of May 1, 2014 to May 1, 20153 and a $5,000,000 limit per claim and a 13 $10,000,000.00 limit per policy year (the “Hudson policy”). (Id. at 4, 276.) 14 Pursuant to that policy, Hudson agreed to “pay on [Nolte’s] behalf all sums in excess of 15 the Deductible and up to the Limits of Liability . . . that [Nolte] become[s] legally obligated to 16 pay as Damages and Claim Expenses resulting from Claims first made against [Nolte] during the 17 Policy Year, as a result of a Wrongful Act.” (Id. at 285) (emphasis omitted). The policy 18 cover[ed] Damages and Claim Expenses that [Nolte] become[s] obligated to pay as a result of Claims arising out of . . . [Nolte’s] 19 participation in a legal entity, including a joint venture, but only for your liability arising out of Professional Services performed by the 20 legal entity or joint venture. 21 (Id.) (emphasis omitted). The Hudson policy defines “professional services” as “those services 22 that [Nolte] perform[s] for others, in [its] practice as an architect, engineer, land surveyor, interior 23 designer, landscape architect, construction manager, scientist, technical consultant or as otherwise 24 defined by endorsement to this Policy.” (Id. at 288.) The Hudson policy excludes liability for
25 3 The events giving rise to the underlying action took place in 2012 and appear, at first glance, to 26 not be covered by the effective policy period under the Hudson policy, which is from May 1, 2014 to May 1, 2015. (See JSUF at 4.) However, at the June 18, 2019 hearing on the pending 27 motions, counsel for Hudson explained that the Hudson policy is triggered by the date a claim is made, not the date of the incident giving rise to the claim. Here, it is undisputed that Hudson 28 became aware of Todahl’s claims within the Hudson policy’s effective dates. (See id. at 5–6.) 1 “Damages and/or Claims Expenses . . . for, based upon, or arising from actual construction 2 performed by [Nolte], [its] agent, or [its] subcontractor, including, but not limited to, performing 3 construction, erection, fabrication, installation, assembly, manufacture, demolition, dismantling, 4 drilling, excavation, dredging, remediation, or supplying any materials, parts or equipment.” (Id. 5 at 289.) 6 C. This Action 7 On May 25, 2018, Travelers commenced this action against Hudson, alleging that Hudson 8 was obligated to defend and indemnify Nolte in the Todahl action because Nolte’s liability arose 9 out of professional services that it rendered on the Project. (Doc. No. 1 at 10.) Travelers alleged 10 that it was therefore entitled to reimbursement and indemnification for the entire settlement 11 amount it paid on Nolte’s behalf as well as half of the defense fees and costs it incurred in 12 defending Nolte. (Id. at 11.) Travelers’ complaint asserts causes of action for equitable 13 indemnity, partial equitable indemnity, and equitable contribution. (Id. at 10–13.) 14 On March 15, 2019, Travelers and Hudson filed cross-motions for summary judgment. 15 (Doc. Nos. 16, 17, 18.) On April 16, 2019, the parties filed their respective oppositions to the 16 other’s summary judgment motion. (Doc. Nos. 20, 21.) On April 30, 2019, Travelers filed its 17 reply to Hudson’s opposition, and on May 1, 2019, Hudson filed its reply to Travelers’s 18 opposition. (Doc. Nos. 23, 25.) 19 LEGAL STANDARD 20 Summary judgment is appropriate when the moving party “shows that there is no genuine 21 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. 22 Civ. P. 56(a). 23 In summary judgment practice, the moving party “initially bears the burden of proving the 24 absence of a genuine issue of material fact.” In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 25 (9th Cir. 2010) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The moving party 26 may accomplish this by “citing to particular parts of materials in the record, including 27 depositions, documents, electronically stored information, affidavits or declarations, stipulations 28 (including those made for purposes of the motion only), admissions, interrogatory answers, or 1 other materials” or by showing that such materials “do not establish the absence or presence of a 2 genuine dispute, or that the adverse party cannot produce admissible evidence to support the 3 fact.” Fed. R. Civ. P. 56(c)(1)(A), (B). If the moving party meets its initial responsibility, the 4 burden then shifts to the opposing party to establish that a genuine issue as to any material fact 5 actually does exist. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 6 (1986). In attempting to establish the existence of this factual dispute, the opposing party may 7 not rely upon the allegations or denials of its pleadings but is required to tender evidence of 8 specific facts in the form of affidavits, and/or admissible discovery material, in support of its 9 contention that the dispute exists. See Fed. R. Civ. P. 56(c)(1); Matsushita, 475 U.S. at 586 n.11; 10 Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 2002) (“A trial court can only consider 11 admissible evidence in ruling on a motion for summary judgment.”). The opposing party must 12 demonstrate that the fact in contention is material, i.e., a fact that might affect the outcome of the 13 suit under the governing law, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); T.W. 14 Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987), and that the 15 dispute is genuine, i.e., the evidence is such that a reasonable jury could return a verdict for the 16 nonmoving party. See Wool v. Tandem Computs., Inc., 818 F.2d 1433, 1436 (9th Cir. 1987). 17 In the endeavor to establish the existence of a factual dispute, the opposing party need not 18 establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual 19 dispute be shown to require a jury or judge to resolve the parties’ differing versions of the truth at 20 trial.” T.W. Elec. Serv., 809 F.2d at 631. Thus, the “purpose of summary judgment is to ‘pierce 21 the pleadings and to assess the proof in order to see whether there is a genuine need for trial.’” 22 Matsushita, 475 U.S. at 587 (citations omitted). 23 “In evaluating the evidence to determine whether there is a genuine issue of fact,” the 24 court draws “all reasonable inferences supported by the evidence in favor of the non-moving 25 party.” Walls v. Cent. Contra Costa Cty. Transit Auth., 653 F.3d 963, 966 (9th Cir. 2011). It is 26 the opposing party’s obligation to produce a factual predicate from which the inference may be 27 drawn. See Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244–45 (E.D. Cal. 1985), 28 aff’d, 810 F.2d 898, 902 (9th Cir. 1987). Undisputed facts are taken as true for purposes of a 1 motion for summary judgment. Anthoine v. N. Cent. Counties Consortium, 605 F.3d 740, 745 2 (9th Cir. 2010). Finally, to demonstrate a genuine issue, the opposing party “must do more than 3 simply show that there is some metaphysical doubt as to the material facts . . .. Where the record 4 taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 5 ‘genuine issue for trial.’” Matsushita, 475 U.S. at 587 (citation omitted). 6 ANALYSIS 7 Travelers contends that, as a matter of law, Hudson must reimburse it for the entire 8 amount it paid to settle the underlying suit against Nolte and half of the defense fees and costs it 9 incurred in defending Nolte because: (1) the Hudson policy broadly covers claims “arising out of 10 Professional Services,” (2) the Travelers policy and the Travelers excess policy expressly exclude 11 coverage for liability arising out of professional services, and (3) the “crux” of Todahl’s 12 allegations against Nolte in the underlying action arose out of Nolte’s professional services. 13 (Doc. No. 18 at 2.) Hudson counters that the complaint fails as a matter of law because: (1) 14 Travelers has pled the wrong causes of action; and (2) the events that gave rise to the underlying 15 action are not within the scope of the its insurance policy.4 (Doc. No. 17 at 7.) 16 A. Whether Travelers Has Pled the Wrong Causes of Action 17 Hudson first contends that the causes of action Travelers asserts here—for equitable 18 indemnity, partial equitable indemnity, and equitable contribution—are not legally viable claims 19 because the Hudson and Travelers policies do not insure against the same risk. (Id. at 16; Doc. 20 No. 21 at 16.) Hudson argues that the only viable claim available to Travelers was for equitable 21 4 In its cross-motion for summary judgment, Hudson also initially argued that its duty to defend 22 Nolte pursuant to the Hudson policy was never triggered because the $100,000.00 deductible on 23 the policy had not been exhausted. (Doc. No. 21 at 21.) In this regard, Hudson argued that “Travelers [was] the primary insurer and the Hudson Policy would only come into play as 24 secondary[,] assuming actual coverage was found.” (Id.) In other words, Hudson argued that its policy was “a secondary or excess policy, [and] Hudson did not have a duty to defend until the 25 deductible was exhausted.” (Id.) At the June 18, 2019 hearing on the pending motion, counsel 26 for Hudson, attorney Scott, explained that this was Hudson’s “initial” position, but that Hudson had since “withdrawn that [argument].” (See also id. at n.45) (Noting that “Hudson is no longer 27 asserting . . . that it’s policy is excess to Travelers’ policy”). Attorney Scott noted that Hudson is “not claiming one [policy] is excess to the other.” Accordingly, the court will not address 28 Hudson’s withdrawn contention that its policy is excess to the Travelers policy. 1 subrogation, which it has not asserted. (Doc. No. 17 at 16–17.) Thus, Hudson argues that 2 Travelers’ complaint fails as a matter of law. 3 The court concludes that this argument fails because it is based upon a misinterpretation 4 of the relevant law. 5 The case law discussing the three principles of contribution, indemnification and subrogation in the insurance context is 6 surprisingly muddled; courts have often confused the principles, thereby providing a fertile supply of quotations for parties seeking to 7 utilize any one of the three concepts as the need arises. As one California appellate court noted, “[i]t is hard to imagine another set 8 of legal terms with more soporific effect than indemnity, subrogation, [and] contribution . . . .” 9 10 Fireman’s Fund Ins. Co. v. Commerce & Indus. Ins. Co., No. C-98-1060VRW, 2000 WL 11 1721080, at *2 (N.D. Cal. Nov. 7, 2000) (quoting Herrick Corp v. Canadian Insurance Co, 29 12 Cal. App. 4th 753, 756 (1994)). Nevertheless, distinguishing between these three equitable 13 theories of recovery is of import because, depending on the facts involved in a particular action, a 14 claim brought under the wrong theory may fail as a matter of law. For example, “the right to 15 contribution arises when several insurers are obligated to indemnify or defend the same loss or 16 claim, and one insurer has paid more than its share of the loss or defended the action without any 17 participation by the others.” Fireman’s Fund Ins. Co. v. Maryland Cas. Co., 65 Cal. App. 4th 18 1279, 1293 (1998). But, as that definition implies, “the right to equitable contribution arises only 19 when all of the insurance carriers share the same level of obligation on the same risk as to the 20 same insured.” Commerce & Indus. Ins. Co., 2000 WL 1721080, at *3 (citation and internal 21 quotation marks omitted); Cont’l Cas. Co. v. Nationwide Mut. Ins. Co., No. CV 14-07326-GW 22 (PLAx), 2014 WL 12607694, at *4 (C.D. Cal. Nov. 3, 2014) (“Put another way, if there exists no 23 common obligation and no payment on the same risk, . . . there exists no claim for equitable 24 contribution.”). On the other hand, “[e]quitable subrogation enables one insurer who has paid a 25 debt for which another insurer is primarily liable to sue from the perspective of the insured under 26 the policy on the argument that the second insurer has failed to pay.” Id. at *3. Thus, “[t]he right 27 of subrogation is purely derivative” as “[t]he subrogated insurer is said to ‘stand in the shoes’ of 28 its insured.” Maryland Cas. Co., 65 Cal. App. 4th at 1293. “Equitable indemnification is similar 1 to equitable subrogation in that it also enables an insurer that has paid an obligation which was 2 entirely the responsibility of a co-insurer to place the complete burden for the loss on that other 3 party,” but “[t]he party seeking reimbursement through indemnification . . . does so in his own 4 right (as with a contribution claim).” Commerce & Indus. Ins. Co., 2000 WL 1721080, at *3; St. 5 Paul Fire & Marine Ins. Co. v. Ins. Co. of the State of Pennsylvania, No. 15-cv-02744-LHK, 6 2016 WL 1191808, at *7 (N.D. Cal. Mar. 28, 2016) (“[E]quitable indemnity is a restitution-based 7 claim resulting from unjust enrichment.”). 8 Here, the undisputed evidence before the court on summary judgment establishes that 9 Travelers and Hudson did not insure Nolte against the same risk. (See, e.g., Doc. No. 1 at 8–9) 10 (“[T]he carriers do not insure the same risk. The Travelers Policy is a general liability policy 11 whereas the Hudson Policy is a professional liability policy.”). Travelers therefore cannot assert 12 a cause of action for equitable contribution. See Maryland Cas. Co., 65 Cal. App. 4th 1282. 13 Because there is no genuine dispute as to this issue, the court will grant Hudson’s cross-motion 14 for summary judgment to the extent it contends that Travelers cannot assert such a claim. 15 For the reasons that follow, however, the court finds that Hudson is incorrect, as a matter 16 of law, in arguing that Travelers cannot assert a cause of action for equitable indemnification and, 17 instead, could only have asserted a cause of action for equitable subrogation. In advancing this 18 argument Hudson relies heavily on the decision in Maryland Casualty to assert that, “[s]imilar to 19 contribution claims, indemnity claims are also not available between carriers who insure different 20 risks. This is because California courts refer to equitable contribution and equitable indemnity 21 interchangeably.” (Doc. No. 21 at 17) (citing Maryland Casualty, 64 Cal. App. 4th at 1295) 22 (emphasis omitted). Hudson’s reliance on Maryland Casualty is unavailing, however, because 23 the state appellate court there did not refer to equitable contribution and equitable indemnity 24 “interchangeably.” Indeed, that court never once mentioned—let alone analyzed—equitable 25 indemnification, and instead merely discussed the differences between equitable contribution and 26 equitable subrogation. See generally Maryland Cas. Co., 65 Cal. App. 4th 1279. More 27 importantly, Hudson is simply incorrect as a matter of law. As discussed above, courts in 28 California recognize that a claim for equitable indemnification is different than a claim for 1 equitable contribution. See also St. Paul Fire & Marine Ins. Co. v. Ins. Co. of the State of 2 Pennsylvania, No. 15-cv-02744-LHK, 2016 WL 1191808, at *7 (N.D. Cal. Mar. 28, 2016) 3 (“[E]quitable contribution and equitable indemnity are not equivalent because whereas 4 contribution requires two parties to equally share a burden, equitable indemnity requires only that 5 one insurer pay a liability that another insurer should have discharged.”). 6 Here, Travelers’ contention is that Hudson should have provided coverage to Nolte in the 7 underlying action because Todahl’s allegations against Nolte fell within the scope of the Hudson 8 policy’s insuring clause, and not the Travelers policy’s insuring clause. Indeed, counsel for 9 Hudson agreed at the hearing on the pending motions that “there are two policies [at issue here] 10 that insure different risks; one of them applies and one of them doesn’t.” Plainly then, Travelers 11 may assert a claim for equitable indemnification. See, e.g., Commerce & Indus. Ins. Co., 2000 12 WL 1721080, at *3 (“Equitable indemnification . . . enables an insurer that has paid an obligation 13 which was entirely the responsibility of a co-insurer to place the complete burden for the loss on 14 that other party.”). Accordingly, the undersigned concludes that Travelers may proceed on its 15 equitable indemnification claim against Hudson. Because there is no genuine dispute as to 16 whether Travelers can assert a cause of action for equitable indemnification, the court will deny 17 Hudson’s summary judgment motion to the extent that it seeks to establish that Travelers, as a 18 matter of law, cannot assert such a claim. 19 B. Whether Hudson Had a Duty to Defend and/or Indemnify Nolte in the Underlying 20 Action 21 Having determined that Travelers may proceed on its equitable indemnification claim 22 against Hudson, the court will now address the substance of Travelers motion for summary 23 judgment. That is, the court will evaluate whether, as a matter of law, Hudson is obligated to 24 reimburse Travelers for any portion of the defense fees and costs that Travelers incurred in 25 Nolte’s defense or the amount that Travelers paid to settle the underlying action on behalf of 26 Nolte. 27 ///// 28 ///// 1 1. Hudson Is Obligated to Reimburse Travelers for Half of the Defense Fees and 2 Costs that Travelers Incurred in Defending Nolte 3 “It is . . . a familiar principle that a liability insurer owes a broad duty to defend its insured 4 against claims that create a potential for indemnity.” Horace Mann Ins. Co. v. Barbara B., 4 Cal. 5 4th 1076, 1081 (1993), as modified on denial of reh’g (May 13, 1993). “[T]he [insurer] must 6 defend a suit which potentially seeks damages within the coverage of the policy.” Gray v. Zurich 7 Ins. Co., 65 Cal. 2d 263, 275 (1966). “The determination [of] whether the insurer owes a duty to 8 defend usually is made in the first instance by comparing the allegations of the complaint with the 9 terms of the policy.” Horace Mann, 4 Cal. 4th at 1081. In analyzing the policy, “courts must 10 consider both the [] language in the policy, and the endorsements or exclusions affecting 11 coverage, if any, included in the policy terms.” Modern Dev. Co. v. Navigators Ins. Co., 111 Cal. 12 App. 4th 932, 939 (2003), as modified (Aug. 29, 2003), as further modified (Sept. 18, 2003). 13 “Facts known to the insurer and extrinsic to the third party complaint can generate a duty to 14 defend, even though the face of the complaint does not reflect a potential for liability under the 15 policy.” Montrose Chem. Corp. v. Superior Court, 6 Cal. 4th 287, 296 (1993). 16 “The insurer’s defense duty is obviated where the facts are undisputed and conclusively 17 eliminate the potential the policy provides coverage for the third party’s claim.” Reg’l Steel 18 Corp. v. Liberty Surplus Ins. Corp., 226 Cal. App. 4th 1377, 1389 (2014). To prevail in an action 19 for declaratory relief with respect to the duty to defend, “the insured must prove the existence of 20 a potential for coverage, while the insurer must establish the absence of any such potential.” Id. 21 at 300. “Facts merely tending to show that the claim is not covered or may not be covered, but 22 are insufficient to eliminate the possibility that resultant damages (or the nature of the action) will 23 fall within the scope of coverage . . . add no weight to the scales.” Montrose Chem., 6 Cal. 4th at 24 300. 25 Accordingly, for Hudson to establish that it had no duty to defend Nolte in the underlying 26 action, it must show that the underlying claims do not fall within the Hudson policy’s coverage. 27 This it cannot do. Hudson acknowledged that the Todahl action was potentially covered under 28 the Hudson policy while that action was still pending. (See JSUF at 347) (noting by way of letter 1 dated November 2, 2017 that “[Hudson] ha[s] determined that there may be a potential of 2 coverage”). Because an insurer “must defend a suit which potentially seeks damages within the 3 coverage of [its] policy” Gray, 65 Cal. 2d at 275, the undersigned concludes that Hudson was 4 obligated to partake in Nolte’s defense in the Todahl action. 5 After acknowledging a potential for coverage, Hudson offered to pay only one half of all 6 defense fees incurred after September 5, 2017—the date when Travelers retendered the Todahl 7 action to Hudson—arguing that “Travelers ha[d] been involved and ha[d] controlled the defense 8 of th[e] case since 2014” and that Hudson had closed its file at Nolte’s request. (JSUF at 365.) 9 To the extent that Hudson is arguing that it should only be required to pay for half of the defense 10 fees incurred after Travelers’ retender, its position is not persuasive. It is undisputed on summary 11 judgment that both Nolte and Travelers first tendered the Todahl action to Hudson in or around 12 October of 2014. (Doc. No. 21-4 at 6.) It is further undisputed that Travelers obtained counsel to 13 defend Nolte in the Todahl action in or around the same time as it first tendered the defense of 14 that action to Hudson. (Id.) Moreover, it was clear from the outset of the underlying action in 15 state court that Todahl’s claims against Nolte were potentially covered under Hudson’s 16 professional services insurance policy because Todahl alleged in that action that Nolte “had a 17 responsibility to supervise the job and ensure that the job was being performed in a safe manner 18 and in compliance with state and federal regulations[] because [Nolte] . . . w[as] responsible for 19 providing construction management and/or general contractor services for the [Project].” (Id. at 20 337) (emphasis added); see also Storek v. Fid. & Guar. Ins. Underwriters, Inc., 504 F. Supp. 2d 21 803, 812 (N.D. Cal. 2007) (“Under California law, an insurer’s duty to defend is determined by 22 those facts known by the insurer at the inception of a third party lawsuit, . . . or from the facts and 23 inferences known to an insurer from the pleadings, available information and its own 24 investigations at the time of the tender of defense.”) (emphasis and citations omitted), aff’d, 320 25 F. App’x 508 (9th Cir. 2009). Because “[t]he defense duty is a continuing one, arising on tender 26 of defense and lasting until the underlying lawsuit is concluded . . . or until it has been shown 27 there is no potential for coverage,” Montrose Chem., 6 Cal. 4th at 295, Hudson was obligated to 28 defend Nolte in the underlying action or seek a judicial declaration that there was no potential that 1 the Todahl action was covered under its policy. See Truck Ins. Exch. v. Superior Court, 51 Cal. 2 App. 4th 985, 994 (1996) (“While the underlying action is pending, the carrier can file an action 3 for declaratory relief and attempt to obtain a declaration that no duty to defend or indemnify 4 exists. Such a determination would allow it to withdraw from the defense without subjecting the 5 carrier to a claim of breach of contract or bad faith.”). Hudson, however, did not seek such a 6 judicial declaration that it had no duty to defend Nolte prior to deciding not to defend or 7 indemnify Nolte. While Hudson evaluated—both through Nolte’s insurance agent as well as 8 through its own corporate counsel and risk manager (Doc. No. 17 at 11)—whether a potential for 9 coverage existed, the law does not allow Hudson to disclaim its obligation to defend its insured 10 absent a judicial determination to that effect.5 11 For these reasons and based upon the undisputed evidence before the court on summary 12 judgment, the undersigned concludes that Hudson had a duty to defend Nolte in the Todahl 13 action. Because there is no genuine dispute as to this fact, the court will grant Travelers’ 14 summary judgment motion to the extent that it seeks to establish that Travelers, as a matter of 15 law, is entitled to half of the defense fees and costs that it incurred in defending Nolte. 16 ///// 17 ///// 18 ///// 19 5 Although Hudson withdrew its argument that its policy was excess to Travelers’ primary 20 policy, see fn.4 above, it continues to argue that its duties to defend and indemnify were subject to its policy’s $100,000.00 deductible. (Doc. No. 21 at 21 n.45.) This argument is also without 21 merit. First, although Hudson apparently wishes to apply this argument both to its duties to defend and to indemnify, it only analyzes it in the context of its duty to defend. Second, even 22 with respect to its duty to defend, Hudson provides the court with no authority supporting its 23 position. Hudson’s citation to cases analyzing the effect of a self-insured retention on an insurer’s obligation to defend is of no import because, even if deductibles and self-insured 24 retentions are analyzed in the same manner (and it is not clear to the court that they are), “in the absence of clear policy language so providing, to require the exhaustion of a self-insured retention 25 before an insurer will have a duty to defend would be contrary to the reasonable expectations of 26 the insured to be provided an immediate defense in connection with its primary coverage.” Legacy Vulcan Corp. v. Superior Court, 185 Cal. App. 4th 677, 696 (2010). Hudson does not 27 contend that its policy expressly provides that the $100,000.00 deductible had to be exhausted before its obligation to defend Nolte would be triggered, and the court’s review of the policy has 28 identified no such language. 1 Accordingly, Hudson is to reimburse Travelers for half of the $137,093.06 it expended in 2 defending Nolte, or $68,546.53. 3 2. Hudson is Not Obligated to Equitably Indemnify Travelers for the Settlement 4 Amount that Travelers Paid on Behalf of Nolte 5 The court next evaluates whether Hudson had a duty to indemnify Nolte in the underlying 6 action, such that Hudson is now obligated to equitably indemnify Travelers for the $1,300,000.00 7 that Travelers paid to settle Todahl’s claims against Nolte in the underlying state court action. 8 “[An] insurer’s duty to indemnify runs to claims that are actually covered, in light of the 9 facts proved.” Buss v. Superior Court, 16 Cal. 4th 35, 45 (1997). Thus, an insurer’s duty to 10 defend its insured is broader than its duty to indemnify its insured in that, as discussed above, the 11 duty to defend is triggered if the underlying claims are potentially covered by its policy, but the 12 duty to indemnify is triggered only if the underlying claims are actually covered by its policy. 13 Certain Underwriters at Lloyd’s of London v. Superior Court, 24 Cal. 4th 945, 958 (2001); 14 Horace Mann Ins. Co. v. Barbara B., 4 Cal. 4th 1076, 1081 (1993), as modified on denial of 15 reh’g (May 13, 1993). 16 Nonetheless, Travelers relies on the decision in Safeco Insurance Company of America v. 17 Superior Court, 140 Cal. App. 4th 874 (2006), and argues that all it need do in order to establish 18 Hudson’s duty to indemnify is to demonstrate that the underlying claims are potentially covered 19 under the Hudson policy and that the burden then shifts to Hudson to prove the absence of actual 20 coverage. (Doc. No. 18 at 20.) Travelers’ reliance on Safeco in support of this argument is 21 misplaced. In that case, the California Court of Appeal held that 22 in an action for equitable contribution by a settling insurer against a nonparticipating insurer, the settling insurer has met its burden of 23 proof when it makes a prima facie showing of coverage under the nonparticipating insurer’s policy—the same showing necessary to 24 trigger the recalcitrant insurer’s duty to defend—and that the burden of proof then shifts to the nonparticipating insurer to prove the 25 absence of actual coverage. 26 Safeco, 140 Cal. App. 4th at 881 (emphasis added). As evidenced by this quoted language, the 27 court in Safeco articulated this standard only with respect to claims for equitable contribution. As 28 discussed above, however, here Travelers cannot assert a claim for equitable contribution because 1 the policies at issue in this action cover different risks. Travelers has pointed the court to no 2 authority, and the court is aware of none, for the proposition that the Safeco burden-shifting 3 framework for equitable contribution claims applies to claims for equitable indemnity. 4 Accordingly, the court will evaluate whether Travelers has established that the underlying claims 5 were actually covered by the Hudson policy, in line with the case law discussed above. 6 In this regard, Travelers contends that Hudson’s professional services policy covers the 7 underlying action because Todahl’s claims against Nolte arose from Nolte’s professional services. 8 (Doc. No. 18 at 2.) Travelers also argues that its commercial general liability and excess policies 9 do not cover the underlying action because they contain professional services exclusions. (Id.) 10 Hudson counters that the injuries Todahl suffered did not arise from the rendering of Nolte’s 11 professional services, and even if they did, its policy’s “actual construction” exclusion precludes 12 coverage.6 (Doc. No. 17 at 17–24.) 13 The parties agree that, on the date Todahl sustained his injuries, representatives of Nolte 14 were at the construction site “for the purpose of providing professional services pursuant to the 15 Construction Management Agreement.” (JSUF at 6.) Travelers position is that Nolte’s liability 16 arose out of the rendering of its professional services because “Nolte’s employee . . . instructed 17 Todahl to clean out the paving troughs to ensure the consistency of the cement was compliant 18 with specifications.” (Doc. No. 18 at 22–23.) This, Travelers argues, constitutes a “professional 19 service” as that term is defined in the Hudson policy and by the CMA because Nolte was hired to 20 provide construction management services. (Id. at 23.) Travelers’ position, however, does not 21 answer the dispositive question here: in instructing Todahl to clean out the paving troughs, did 22 the Nolte employee provide a professional service pursuant to the CMA? For the reasons 23 explained below, the court concludes that the answer to that question is no. 24 As an initial matter, the court notes that Travelers has provided no support for its position 25 that Nolte’s liability arose out of the rendering of its professional services. Travelers’ argues that 26
27 6 Hudson also contends that Nolte did not instruct Todahl to clean out the troughs after every truckload, but the parties have stipulated to this fact, and so the court will not address Hudson’s 28 argument in this regard. (See Doc. No. 18-2 at 6.) 1 because (1) “courts have defined ‘professional services’ as those ‘arising out of a vocation, 2 calling, occupation, or employment involving specialized knowledge, labor, or skill, and the labor 3 or skill involved is predominantly mental or intellectual, rather than physical or manual,’” and (2) 4 “[t]he instruction [at issue] arose out of a professional construction management vocation[] [that] 5 was based on specialized knowledge of cement specifications . . . and [] involved a skill that was 6 predominantly mental,” the instruction therefore arose out of Nolte’s professional services. (Doc. 7 No. 18 at 21) (quoting Tradewinds Escrow, Inc. v. Truck Ins. Exch., 97 Cal. App. 4th 704, 713 8 (2002)). Travelers’ argument is not persuasive. It is not the case that any task Nolte employees 9 completed while working on the Project was within the scope of Nolte’s professional services. 10 The decision in Blumberg v. Guarantee Insurance Company, 192 Cal. App. 3d 1286 (1987), is 11 instructive in this regard. In that case, an attorney, insured under a professional liability policy 12 for claims arising out of acts or omissions in rendering or failing to render professional services 13 for others in his capacity as a lawyer, tendered his defense of his former law partner’s breach of 14 partnership lawsuit to his insurer. Id. at 1290–91. In finding that the professional services 15 insurance policy at issue there did not provide coverage for the breach of partnership lawsuit, the 16 court noted that, “at the time Blumberg made the alleged misrepresentations [to his law partner], 17 he was not rendering professional services ‘for others,’ nor acting in his ‘capacity as a lawyer.’” 18 Id. at 1292–93. Rather, the court found “Blumberg was acting in his capacity as Zommick’s law 19 partner and the fact that he happened to be a lawyer was of no import what[so]ever.” Id. at 1293. 20 A similar rationale applies here because even though Nolte’s engineers were onsite on the day of 21 Todahl was injured, as discussed below, when Nolte’s employee instructed Todahl to clean out 22 the troughs, that employee was not acting within the scope of Nolte’s professional services. 23 Pursuant to the CMA—the agreement defining the scope of Nolte’s professional services 24 with regard to the Project—Nolte was to “furnish a licensed Civil Engineer as Construction 25 Manager” and to “competently and thoroughly provide Construction Management Services” for 26 the Project. (JSUF at 302, 313; Doc. No. 17 at 7.) These services—as defined in Exhibit A to the 27 CMA, “DRAFT SCOPE OF CONSULTANT SERVICES”—included “construction observation, 28 materials testing, and contract administration” for the Project, as well as “structural observation 1 services, roadway observation services, survey quality assurance, [and] materials testing and 2 support staff, as needed, during the course of the construction.” (JSUF at 313.) To the extent that 3 Nolte observed that construction was not taking place in accordance with the Project’s plans or 4 specifications, the CMA required Nolte to advise contractors on any work that was 5 unsatisfactory, faulty or defective or did not conform to the Project’s plans, or had been damaged, 6 or did not meet the requirements of any field observation, test or approval required to be made, 7 (JSUF at 317–318) (emphasis added); it did not require or authorize Nolte to instruct laborers— 8 as its’ employee did with Todahl—on how to correct any deficiency that Nolte observed. In other 9 words, pursuant to the CMA, Nolte’s responsibilities included observing the construction and 10 advising a laborer’s employer—the contractor, not the laborer himself—that its laborers were not 11 in compliance with the Projects plans or specifications. Hudson therefore correctly notes that 12 Nolte was hired to serve as the City’s “eyes and ears,” (Doc. No. 17 at 3); it was not hired to 13 serve as the City’s mouth. Travelers argues that this ignores the purpose behind why the 14 instruction was given to Todahl which was “to ensure compliance with cement specifications and 15 protect the project against any defects and deficiencies.” (Doc. No. 20 at 18.) Travelers again 16 misses the mark. The dispositive issue is not why the instruction was given to Todahl but 17 whether giving the instruction was within the scope of the professional services Nolte was hired 18 to render. The CMA establishes that it was not. Indeed, not only is instructing laborers on how 19 to conduct construction not included within the scope of Nolte’s professional services as defined 20 by the CMA, the CMA also specifically states that, with respect to its services rendered during 21 construction, Nolte 22 [t]hrough more extensive onsite observations of the work in progress and field checks by the construction management staff, [] shall 23 endeavor to provide further protection for the City against defects and deficiencies in the work of the Contractor; but, the furnishing of 24 such services will not make Nolte responsible for or give Nolte control over construction means, methods, techniques, sequences, or 25 procedures, or for safety precautions or programs, or responsibility for Contractor’s failure to perform the Work in accordance with the 26 Contract Documents. 27 (JSUF at 314–15) (emphasis added). Thus, the CMA expressly noted that Nolte is not 28 responsible for construction means, methods, techniques, sequences or procedures—such as the 1 exact manner the cement troughs needed to be cleared—nor is Nolte responsible for safety 2 precautions. 3 That Nolte’s professional services did not include giving the instruction that Todahl 4 alleged he received from a Nolte employee is further bolstered by three uncontroverted 5 declarations from Nolte engineers that Hudson has attached to its cross-motion for summary 6 judgment. Joey Carrol, a Nolte field engineer who was working on the Project on the day of the 7 incident, avers in his declaration that: (1) his duty was to observe the Project to make sure it 8 complied with the plans; (2) neither he, nor any other field engineer to his knowledge, exercised 9 control over how the contractors’ laborers did their jobs; and (3) that directing laborers on how to 10 do their jobs “was not part of Nolte’s professional services on the [] Project.” (Doc. No. 17-8 at 11 1–2.) Tiffany Goodwin, a Nolte field engineer who was working on the Project as the lead field 12 engineer on the day of the incident, avers that she is familiar with the job responsibilities of 13 Nolte’s field engineers, that Nolte was hired to observe, inspect, and report to the City whether 14 work on a particular day complied with the Project’s plans and specifications, and that Nolte’s 15 engineers had no control over the manner in which the laborers did their jobs. (Doc. No. 17-7 at 16 1–2.) Goodwin also declares that, prior to the incident, she observed a co-employee of Todahl’s 17 engaging in the same tasks as Todahl and that she “did not, and would not, direct [that laborer] or 18 any other [laborer] . . . on how to do their job.” (Id. at 2.) Todd George, a Nolte field engineer 19 supervisor who was also working on the day of the incident, avers in his declaration that “[t]he 20 job responsibilities of [Nolte] field engineers . . . was to be the [City’s] . . . ‘eyes and ears’ and to 21 only observe the construction . . . to report back to the City as to whether the project was built per 22 the plans and specifications. . . . [Nolte] engineers were not authorized to direct, and would not 23 direct the work of any . . . laborer.” (Doc. No. 17-4 at 1–2.) George also states that instructing 24 laborers was not part of Nolte’s professional services on the Project and that any such instructions 25 ///// 26 ///// 27 ///// 28 ///// 1 would be outside the scope of Nolte’s professional services rendered pursuant to the CMA. (Id. 2 at 2.)7 3 Thus, the undisputed evidence before the court on summary judgment establishes that 4 instructing laborers such as Todahl on how often to clean out cement troughs was not within the 5 scope of Nolte’s professional services. Because there is no genuine dispute as to this issue, the 6 court will deny Travelers’ summary judgment motion to the extent it seeks to establish that the 7 Hudson professional services policy actually covered the underlying state court action.8 8 Moreover, because the court concludes that Nolte’s liability in the underlying action did not arise 9 out of its rendering of professional services, the court also concludes that the professional services 10 exclusions in the Travelers’ policies do not preclude coverage. 11 CONCLUSION 12 For the reasons set forth above, 13 1. Hudson’s cross-motion for summary judgment (Doc. Nos. 16, 17) is granted in 14 part and denied in part as follows: 15 a. The court concludes that Travelers cannot assert a cause of action for 16 equitable contribution as a matter of law; 17 b. The court concludes that Travelers is not entitled to equitable 18 indemnification or partial equitable indemnification from Hudson for the 19 7 Travelers levels various evidentiary objections to these declarations, including that: (1) each is 20 irrelevant and immaterial because the declarations attempt to re-litigate the issue of Nolte’s liability which was already resolved; and (2) the declarants lack personal knowledge as to the 21 responsibilities of Nolte field engineers or whether the instruction alleged was given. (Doc. No. 20-3 at 2–7.) With respect to Travelers’ first objection, the court is not considering those aspects 22 of the declarations which state that the declarants did not see or hear a Nolte employee instruct 23 Todahl to clean the troughs, or any other averments that call into question whether a Nolte employee gave Todahl that instruction. Rather, as discussed above, that fact is undisputed for the 24 purposes of resolving the pending motions. With respect to Travelers’ objection that the declarants lack personal knowledge as to the responsibilities of Nolte field engineers, the court 25 overrules that objection. Each of the declarants is either a Nolte field engineer, lead field 26 engineer, or field engineer supervisor, and each avers that the statements in their declarations are based on their personal knowledge. (See Doc. Nos. 17-4, 17-7, 17-8.) 27 8 As a result, the court need not address Hudson’s remaining argument that the Hudson’s policy’s 28 “actual construction” exclusion precludes coverage. (Doc. No. 17 at 23–24.) 1 amount Travelers’ paid to settle the underlying action because that action is 2 not actually covered by the Hudson policy; 3 C. Hudson’s cross-motion for summary judgment is denied in all other 4 respects; 5 2. Travelers’ cross-motion for summary judgment (Doc. No. 18) is granted in part 6 and denied in part as follows: 7 a. Travelers is entitled to equitable indemnification from Hudson for half of 8 the $137,093.06 that Travelers expended in defending Nolte in the 9 underlying action, or $68,546.53, because that underlying action was 10 potentially covered by the Hudson policy at the time the settlement was 11 reached; 12 b. Traveler’s cross-motion for summary judgment is denied in all other 13 respects; and 14 3. The Clerk of the Court is directed to close this case. 15 16 | IT IS SO ORDERED. 17 jpn At Dated: _ March 5, 2020 em At 18 UNITED STATES DISTRICT JUDGE 19 20 21 22 23 24 25 26 27 28 23