McMillin Co., LLC v. Am.. Safety Indem. Co.
Annotate this CaseMcMillin was general contractor and B&B Framing was a subcontractor in construction contracts for Temecula residential real estate development projects. ASIC issued B&B's commercial general liability insurance. Homeowners sued, alleging construction defects in their residences (Baker litigation). McMillin tendered the defense to ASIC, contending it was an additional insured. ASIC denied the tender. Later, McMillin-related entities (not McMillin) sued ASIC and other insurers, alleging that each was an insurer to subcontractors on the projects, that each was an additional insured under each policy, that each insurer owed each plaintiff a duty to defend the litigation, and that, by denying defense of the litigation each breached a contract of insurance and its implied covenant of good faith and fair dealing. Pretrial rulings resulted in agreement that, although ASIC had breached its duty to defend, the settlement proceeds ($690,154) would be applied as an offset to McMillin's Baker fees ($309,957), so that McMillin could not prove any contract damages, and without contract damages, McMillin could not maintain a cause of action for breach of the implied covenant of good faith and fair dealing. The parties stipulated to judgment in favor of ASIC. The court of appeal dismissed the appeal as to all parties other than McMillin and ASIC and reversed
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