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Jeffrey Epps suffered severe injuries after diving into the shallow end of a swimming pool at St. Regis Resort in Dana Point, CA. He and his wife Michelle Epps brought suit against the owner of the hotel, the general contractor who built all the exterior improvements at the hotel, and the subcontractor who built the pool. They claimed in part that the vertical tile depth markers were illegible because they were partially submerged and that the color of the pool plaster made the pool seem deeper than it really was.
The general contractor had an express indemnity agreement with the owner to defend and indemnify the owner for all claims arising out of the general contractor’s work. The subcontractor in turn had an express indemnity agreement with the general contractor for the subcontractor to indemnify the general contractor.
The general contractor’s insurer, National Union, took up the defense of the general contractor. National Union also defended the owner as an additional insured. The general contractor tendered its defense to the subcontractor, but the subcontractor never responded to the tender. Additionally, the subcontractor did not have adequate insurance as required by its subcontract and thus did not have insurance coverage for the claims.
The general contractor cross-complained against the subcontractor for express indemnity and contribution. National Union also intervened and cross-complained against the subcontractor, alleging that it was subrogated to the general contractor for its payment of defense fees and costs.
On summary judgment, the subcontractor was determined to have little to no liability for plaintiff’s injuries. The general contractor and subcontractor settled with the plaintiffs and the owners, leaving only the general contractor and National Union’s cross-complaints against the subcontractor for trial. The court tried National Union’s claim for equitable subrogation and the general contractor’s claim for express indemnity separately. It determined that based on the indemnity agreement in the subcontract, National Union was entitled to the full amount it paid in defense of the general contractor, the amount it paid in defense of the owner, and all amounts paid in settlement. The court also awarded the general contractor the $250,000 it expended under its self-insured retention.
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