Procedural Posture

Plaintiff property owners appealed judgments of the Superior Court of Orange County (California), which granted summary adjudication to defendants, their homeowner’s insurance carrier and their insurance brokers, on claims relating to a course of construction policy.

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Overview

The owners purchased a residential lot located on a steep slope. Their lender required that they obtain a course of construction insurance policy. At the owners’ request, the insurance brokers procured the coverage. The policy provided collapse coverage, excluded earth movement, and did not provide third party liability coverage. A landslide caused severe damage to the home. The owners sued the neighboring landowners and contractors, some of whom filed cross-complaints. The court held that the insurance brokers had no duty to obtain general liability insurance because the owners did not request it and did not present evidence sufficient to raise a triable question of fact as to whether they reasonably believed they were obtaining it. An investigator’s evidence regarding a previous landslide and the placement of fill soil during grading showed that the claim was barred under the exclusion for earth movement. The collapse coverage provision did not apply because the alleged improper grading was a design error and not a defective method in construction. Alleged concealment of the previous landslide by the developer could not be considered the efficient proximate cause of the loss.