Construction

• Forecast Homes, Inc. v. Steadfast Insurance Co.

Facts: Forecast is a housing developer. It required its subcontractors to obtain policies of insurance that included Additional Insured Endorsements naming Forecast as an additional insured under the policy. Forecast did not require any specific language regarding the insurances policies' self-insured retention (SIR) provisions.  

Several subcontractors obtained the required insurance coverage from Steadfast. Steadfast denied Forecast's tender of defense on the ground that the subcontractor had not paid the policy's SIR. Steadfast argued that, under the terms of the policy, only the named insured (not Forecast) could satisfy the SIR and trigger coverage.  

Forecast filed a declaratory relief action against Steadfast. The trial court ruled in favor Steadfast. Forecast appeals.  

Holding: Affirmed. The language of the insurance policy controls. Here, the policy endorsements regarding SIRs specifically defined and identified the named insured (not an additional insured) as the entity required to satisfy the SIR as a precondition to coverage. Who may satisfy an SIR depends on a policy's express terms.

• Suarez v. Pacific Northstar Mechanical

Facts: Pacific Northstar Mechanical was the HVAC subcontractor working at a multi-employer construction site. One of its employees was slightly injured by a preexisting, nonobvious hazard (an ungrounded light fixture) that was not created in the course of Pacific's work. The employee told his foreman about the incident; the foreman did not report it to the general contractor. Shortly thereafter, Suarez (an employee of the general contractor) was seriously injured by the same hazard.  

Suarez sued Pacific. Pacific filed a motion for summary judgment on the ground that it owed no duty of care to Suarez, as it did not own or control the property, did not create the dangerous condition, and was not hired to inspect or work on the ungrounded light fixture. The trial court granted summary judgment for Pacific on Suarez’s cause of action for negligence. Suarez appealed.  

Holding: Reversed. The court held that although no common law or contractual duty existed, Pacific owed a statutory duty of care under Labor Code Section 6400.  

This case created a new duty of care that requires each employer at a multiemployer worksite to report (to the general contractor) all non obvious hazards about which the employer learns because its employees were exposed to the hazard even if the employer did not create the hazard.