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Sawyer v. Westchester Fire Insurance Company11/20/2002
rvision of work performed for the additional insured by or on behalf of the designated contractor." The trial court recognized this exclusion as one for active negligence. St. Paul points out that this provision mirrors the requirement in the Standard Specifications section 7-1.12 that MCM indemnify the State for claims "other than the active negligence of the State." Appellants make the unsupported assertion that " he State could have negligently supervised MCM and directed it to remove the freeway lighting at the wrong time, thereby increasing the danger to plaintiffs and causing the accident" and that such negligent supervision would fall within coverage irrespective of any fault on the part of any other party.
But appellants' overly broad reading of "supervision" would swallow up the entire exclusion. As St. Paul asserts, virtually anything the State did, short of turning off the lights itself (which would bring the act outside of coverage all together because it would be beyond the scope of MCM's operations) would constitute "supervision" as appellants seek to define it. Supervision does not include preparing or providing plans and specifications, but rather oversight of MCM's work such that the State's liability is only vicarious. In National Union Fire Ins. Co. v. Nationwide Ins. Co. (1999) 69 Cal.App.4th 709, 719-720, the court considered a nearly identical exclusion to that here. In National Union, the subcontract between the general contractor, Tutor-Saliba, and its subcontractor, Pangborn, required that Pangborn name the general contractor as an additional insured by the use of a standard endorsement found in an Insurance Services Office (ISO) policy (ISO form G116) or its equivalent. ISO form G116 provides, in language almost identical to that here, that coverage does not apply "`to bodily injury or property damage arising out of any act or omission of the additional insured or any of his employees, other than general supervision of work performed for the additional insured by the named insured.'" (Id. at p. 719, fn. 4.) The endorsement that was actually issued included the restrictive language that Tutor-Saliba was an insured only to the extent that it "is held liable" for Pangborn's acts arising out of and in the course of operations by Pangborn. The appellants argued that whereas the actual endorsement was limited to liability of Pangborn's acts or omissions for which Tutor-Saliba may be held liable, the ISO endorsement provided coverage for the operations of Pangborn as well as Tutor-Saliba's acts or omissions in connections with its general supervision of Pangborn's operations. The Court of Appeal found that this was a distinction without a difference: "Even the supposedly more comprehensive ISO form G116 endorsement (which Pangborn failed to secure) still only required additional insured coverage for Tutor-Saliba's `general supervision' over Pangborn, not for its own independent acts or omissions." (Id. at p. 720.) The National Union court noted that Tutor-Saliba "could have insisted upon a broader additional insured endorsement with no language limiting coverage to its derivative liability based on its failure to supervise Pangborn's acts." (Id. at p. 721.) The appellate court also found the endorsement to be consistent with the public interest in preventing accidents by imposing the financial risk of higher insurance premiums on the party actively creating the risk.
Appellants also seek to apply the "supervision" exception to the first part of exclusion (c), the "sole negligence" exception. But this makes no sense. First, a reading of the plain language of exclusion (c) does not lend itself to appellants' interpretation that "supervision" can be applied to the first part of the ex
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