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Sawyer v. Westchester Fire Insurance Company11/20/2002
on to make its own determination of the value of legal services. Having improperly refused to defend the State, St. Paul cannot now be heard to complain about having to pay for the State's defense at a higher rate than it would have agreed to pay.
Thus, we conclude that the attorney fees award in the amount of $173,250 was not excessive. Indeed, we note that the amount of the award is less than the $220,000 to $240,000 amount appellants' counsel requested at the September 12, 2000 hearing.
D. Summary Judgment in Favor of Westchester Was Proper
In granting summary judgment in favor of Westchester, the excess carrier to St. Paul, the trial court found as follows:
"Defendant's motion for summary judgment is granted. Based on the plain meaning and clear, explicit, and unambiguous terms of the policy, the State of California was not listed as a named insured or an additional insured and does not qualify as an insured under the Westchester policy. The MCM contract did not require that the State obtain excess insurance. Plaintiffs have failed to proffer admissible evidence showing that MCM opted to include the State as an additional insured or that the State was a named insured. Furthermore, Westchester did not have any duty to defend the State based on the terms of the policy and undisputed existence of primary insurance and a duty to defend on the part of St. Paul as a matter of law."
Appellants claim that the trial court erred in finding that the State was not an insured under the Westchester policy and that Westchester had no duty to defend. We disagree.
1. The State Was Not an Insured Under the Excess Policy
To prevail on their claims for breach of contract and bad faith and their direct action under Insurance Code section 11580, plaintiffs were required to show that the State was an insured under the Westchester excess policy. (Seretti v. Superior Nat. Ins. Co. (1999) 71 Cal.App.4th 920, 929 [bad faith]; Wright v. Fireman's Fund Ins. Companies (1992) 11 Cal.App.4th 998, 1015 [direct action].) It is undisputed that the State was neither a named insured under the Westchester excess policy nor an additional insured by endorsement. Thus, the State could only qualify as an insured if it fell within the class of persons included as insureds in the Westchester policy. Under the heading entitled "III. NAMED INSURED AND INSURED," the Westchester policy provided as follows:
"(2) The term `Insured' as used herein means the `Named Insured' and:
"(a) any person, organization, trustee or estate that has obligated you by written contract to provide the insurance that is afforded by this policy, but only with respect to liability arising out of `Your Work,' `Your Product' and to property owned or used by you;
"(b) at your option and subject to the terms of this policy, any person, organization, trustee or estate (other than the `Named Insured') included as an additional insured in the `Underlying Insurance,' but only with respect to liability arising out of `Your Work,' `Your Product,' or property owned or used by you."
Appellants contend that the State qualifies as an insured under subsection (a) above because a fair reading of the contract between the State and MCM indicates that MCM was "obligated" to provide the State with the insurance issued by Westchester. We disagree. Standard Specifications section 7-1.12, incorporated into the State's contract, provides that the " t is the intent of the parties that the Contractor will indemnify and hold harmless the State" from any and all claims, suits and actions as set forth therein, the State may retain funds due the contractor until dis
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