Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County, No. 30-2008-00110578, Geoffrey T. Glass, Judge.
Esner & Chang, Andrew N. Chang and Stuart B. Esner for Plaintiffs and Appellants.
Selman Breitman, Alan B. Yuter and Benjamin A. Marsh for Defendants and Respondents Western Heritage Insurance Company and R.E. Chaix & Associates Insurance Brokers, Inc.
Waxler Carner Brodsky, Andrew J. Waxler, Barry Z. Brodsky and Scott K. Murch for Defendant and Respondent Boswell Insurance Agency, Agents & Brokers, Inc.
OPINION
O’LEARY, ACTING P. J.
Edward B. Riahi (Riahi), and his solely-owned general contractor business, Pacific Civil Constructors, Inc., dba Renaissance Builders (Pacific), appeal from a summary judgment entered in favor of an insurance broker, an insurance company, and the insurance company’s agent. The lawsuit is based on Pacific’s use of an excavation subcontractor who failed to timely add Pacific as an additional insured on the subcontractor’s insurance policy. Pacific settled its lawsuit against the subcontractor for $250,000. We agree with the trial court’s ruling there were no triable issues of material fact with respect to the three defendants in this lawsuit, and we affirm the judgment.
I
Riahi is the principal and sole shareholder of Pacific, a licensed general contractor. In 2004, Riahi hired his own company, Pacific, to act as the general contractor to construct a residence on property he owned in Laguna Beach.
In August 2004, Pacific subcontracted with Pete Sanchez, dba H&M Excavating, Inc. (hereafter collectively and in the singular referred to as Sanchez) to excavate and grade the property for development. Sanchez agreed to obtain insurance and an additional insured endorsement to the commercial general liability policy (CGL policy), naming Pacific as an additional insured. He agreed to obtain this endorsement before starting work on the property.
At the end of August 2004, Sanchez’s insurance broker, Boswell Insurance Agency (Boswell), applied for a CGL policy with Western Heritage Insurance Company (Western). Western is a non-admitted carrier in California and had appointed R.E. Chaix & Associates, Insurance Brokers, Inc. (Chaix) as its general agent. Under the terms of this appointment, Chaix had the authority to underwrite and issue Western’s policies in California.
When Boswell submitted the application for insurance to Chaix there was no request for an additional insured endorsement. At the end of August 2004, Chaix issued a binder for Western’s CGL policy covering Sanchez. The binder noted there were no additional insureds, but one could be added for a premium of $150 plus tax.
Western issued CGL Policy No. SCP0530273 for the period September 3, 2004, through September 3, 2005. The policy provided in relevant part:
“SECTION I-COVERAGES
“COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY
“1. Insuring Agreement
“a. We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.... However, we will have no duty to defend the insured against any ‘suit’ seeking damages for ‘bodily injury’ or ‘property damage’ to which this insurance does not apply. We may, at our discretion, investigate any ‘occurrence’ and settle any claim or ‘suit’ that may result.... [¶]... [¶]
“b. This insurance applies to ‘bodily injury’ and ‘property damage’ only if:
“(1) The ‘bodily injury’ or ‘property damage’ is caused by an ‘occurrence’ that takes place in the ‘coverage territory’; [and]
“(2) The ‘bodily injury’ or ‘property damage’ occurs during the policy period[.]... [¶]... [¶]
“2. Exclusions
“This insurance does not apply to: [¶]... [¶]
“j. Damage To Property
“‘Property damage’ to: [¶]... [¶]
“(5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations, ...”
“SECTION V-DEFINITIONS
“16. ‘Products-completed operations hazard’:
“a. Includes all ‘bodily injury’ and ‘property damage’ occurring away from premises you own or rent and arising out of ‘your product’ or ‘your work’ except:
“(1) Products that are still in your physical possession; or
“(2) Work that has not yet been completed or abandoned. However, ‘your work’ will be deemed completed at the earliest of the following times: [¶]... [¶]
“17. ‘Property damage’ means:
“a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
“b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the ‘occurrence’ that caused it.”
Before starting work on September 21, 2004, Sanchez assured Pacific he had instructed his insurance agent, Boswell, to get the endorsement. Pacific was concerned about the coverage because it had worked with Sanchez on other projects and was aware of two prior accidents. Sanchez told Pacific to call its office manager, Carl Hockenberry, for verification of the endorsement. Hockenberry represented he had called in the request to Boswell and had obtained the requested coverage. But in reality, Sanchez had not sent any request. Pacific relied on Hockenberry’s oral representations and did not require a copy of the endorsement or a “Certificate of Liability Insurance” (Certificate of Insurance).
On September 23, Sanchez was grading the property when it broke an eight-inch charged waterline owned by the Laguna Beach County Water District (the Water District). The rupture caused flooding and damage to Riahi’s and his neighbor’s properties (the Murrays). Riahi alleged the flood caused construction delays, costs for a geotechnical re-evaluation required by the City of Laguna Beach (the City), and the installation of a “deep foundation system” to ensure the structural integrity of Riahi’s home. Pacific paid the City for clean up and police traffic control costs and paid the Water District for repairs to the waterline.
On October 4, 2004, Sanchez had completed all its work on the project. It sent Pacific an invoice that included a $160 charge for the cost of an additional insured endorsement (but, here is no evidence Pacific paid the $160 fee). Five months later, on March 7, 2005, Hockenberry faxed Boswell a request for an additional insured certificate of insurance to cover Pacific. In response, Boswell requested clarification of the location of the job site. The following day, Boswell prepared and sent a Certificate of Insurance to Pacific and Chaix.
The Certificate of Insurance identified the coverage and liability limits of the policy. At the top of the standard form is a box titled “Producer” and it listed “Boswell Ins. Agency” and its address. In the next box on the form, Sanchez is listed as the “insured.” Next to those boxes, in bold print, is the disclaimer, “THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND, OR ALTER THE COVERAGE AFFORDED BY THE POLICIES LISTED BELOW.” (Bold omitted.) Directly below this language is a box listing “INSURERS AFFORDING COVERAGE.” Only Western’s name was typed in this box and listed as “Insurer A.”
The Certificate of Insurance stated it was a CGL policy, the policy number, and the policy’s effective dates. Near the bottom of the form in the “description of operations/locations/vehicles/exclusions added by endorsement/special provisions” section, Boswell wrote, “Certificate holder is included as an [a]dditional [i]nsured per form CG2010 (07/04). Additional Insured Endorsement form to be issued by Western... Re: [Riahi’s Laguna Beach property address].” In the next section of the form, Boswell identified the “certificate holder” as Pacific. Joe Boswell signed the form under the words “authorized representative.”
Boswell sent the Certificate of Insurance to Chaix on March 8, 2005. It was the ordinary practice of the parties to use the Certificate of Insurance as a means to request Chaix to underwrite the additional insured endorsement. Chaix received the request on March 9. Based on the turnaround time of prior requests, it was expected Chaix would take about one week to issue the endorsement. However, in this case Chaix never issued the endorsement. Rather on March 23, Chaix forwarded the request for endorsement to Western. Western did not issue the endorsement. Neither Chaix nor Western informed Boswell the endorsement was not issued.
A few days later, on March 25, Boswell received a letter from Riahi on Pacific’s letterhead. Riahi reported Sanchez broke a waterline on his property and Pacific was making a $36,396.39 claim for damages. Pacific said this claim included $4,883.24 for the City, $7,714.15 for the Water District, and $11,014 for the Murray’s residence’s damages. Missing from the letter was any indication Riahi personally intended to file any claim for damages against Pacific.
Boswell claimed this letter was the first time the agency heard about the waterline incident. Boswell forwarded the letter to Western and Chaix. Riahi later informed the Western claims adjustor, Tim Bowne, that he personally had claims as the property owner against Sanchez and Pacific. Bowne told Riahi there would be coverage for the damages. Riahi understood this to confirm Pacific was an additional insured on Sanchez’s policy.
In August 2005, Western reached a settlement with the Murrays on behalf of Sanchez. They signed a release in exchange for $8,889.
In September 2007, Pacific filed a lawsuit against Sanchez for breach of contract and negligence. The complaint alleged Pacific paid the clean-up costs charged by the Water District and the City. Western defended Sanchez in the lawsuit.
In the meantime, Riahi and Pacific executed mutual tolling agreements to preserve their rights and remedies against each other. They also executed a separate agreement by which Pacific agreed to turn over to Riahi any recovery obtained from Sanchez, Western, Boswell, or Chaix.
In December 2008, the case against Sanchez settled just before trial for $250,000 plus a waiver of all litigation costs and fees. Pacific agreed to give Chaix and Western a limited release of claims. Pacific, Riahi, and Sanchez agreed to release each other. Pacific and Riahi did not release any claims against Boswell.
While the Sanchez action was pending, Riahi and Pacific sued Chaix, Western, and Boswell. After the Sanchez action settled, Riahi and Pacific filed a second amended complaint, which became the operative pleading.
Pacific and Riahi sued Western for declaratory relief, breach of contract, and breach of the implied covenant of good faith and fair dealing. They alleged Western’s policy issued to Sanchez provided “first party coverage” and Western breached its obligation to Pacific and Riahi by failing and refusing to pay damages pursuant to the terms of the policy.
The complaint alleged only one cause of action against Chaix for negligence in failing to procure the additional insurance endorsement. It alleged Chaix was “authorized to issue additional insured endorsements in California binding [Western] to coverage” and Chaix was negligent in failing to obtain the endorsement.
Three causes of action were alleged against Boswell: breach of contract under a third party beneficiary theory, negligence, and negligent misrepresentation. As to the first claim, the complaint alleged Sanchez and Boswell entered into a contract to obtain an additional insured endorsement to the policy and Boswell received consideration of $160. Riahi and Pacific alleged they were third party beneficiaries of that contract and a breach occurred when Boswell failed to ensure they were named on an additional insured endorsement. The negligence claim was based on the allegation Boswell breached his duty to obtain the additional insured endorsement. And finally, the negligent misrepresentation claim was based on the allegation Boswell misrepresented Pacific was named as an additional insured on the policy when it sent the Certificate of Liability, and Pacific relied on the Certificate of Liability to its detriment by incurring clean up costs and other expenses.
Western, Chaix and Boswell filed separate summary judgment motions. Western argued Pacific and Riahi were not insureds to the policy it issued to Sanchez, which is an essential fact to recover on every cause of action alleged against it. Western maintained the CGL policy did not provide first party coverage and Western had already paid (on behalf of its insured Sanchez) the claims submitted by Pacific and therefore Pacific and Riahi had no damages.
Chaix moved for summary judgment on the grounds it was Western’s authorized agent and did not owe Pacific or Riahi a duty of care to procure an additional insured endorsement. Chaix also alleged there were no damages arising from the purported failure to issue an additional insured endorsement.
Boswell argued causation could not be established on any of the causes of action alleged against it. It alleged Pacific and Riahi could not obtain retroactive coverage under the policy for a known loss that had occurred five months before Boswell was asked to request an additional insured endorsement. In addition, Boswell pointed to the undisputed fact there was no lawsuit filed against Pacific or Riahi that would trigger Western’s obligation to an additional insured under the policy.
Pacific and Riahi filed oppositions to the motions and objections to some of the evidence, the contents of which will be discussed in more detail below. In short, they alleged there were triable issues of fact regarding whether issuing the Certificate of Liability amended the policy to make Pacific an additional insured. They maintained the evidence showed Western and Chaix knew Boswell had issued the Certificate of Liability, and there was a triable issue of fact as to whether they were estopped from denying coverage. They also pointed to the actions taken by Western’s claim adjusters as a basis for imposing liability. They alleged there was a triable issue of fact as to whether Chaix owed them a duty. Finally, as to Boswell, they asserted there were material issues of fact concerning causation.
The court granted Western’s motion for summary judgment. In the order it made the following findings: “1. Western... issued policy No. SCP0530273... to named insured [Sanchez]. [¶] 2. Boswell was the retail broker for [Sanchez] and not Western[’s]... agent. [¶] 3. On March 8, Boswell issued a Certificate of Liability... naming Pacific.... [¶] 4. As a matter of law, the Certificate of Liability... naming Pacific... issued by Boswell cannot amend Western[’s] policy No. SCP0530273. [¶] 5. Neither Pacific... nor Riahi are insureds to policy No. SCP0530273. As such, Pacific... and Riahi’s cause of action for breach of contract fails as a matter of law. [¶] 6. [Pacific and Riahi] cannot assert a claim for violation of the fair claims practices act pursuant to Moradi-Shalal v. Fireman’s Fund Ins. Co. (1988) 46 Cal.3d 287, 304. Thus, [their] cause of action for breach of the covenant of good faith and fair dealing fails as a matter of law.” The court granted Pacific’s and Riahi’s evidentiary objections Nos. 1 and 3 but overruled objection No. 2. It granted Western’s evidentiary objections Nos. 4 and 16. It denied all the others.
The court granted Chaix’s motion for summary judgment. In the order it made the following findings: “1.... Chaix was a general agent for Western.... [¶] 2. Western... issued policy No. SCP0530273... to named insured [Sanchez]. [¶] 3. As a matter of law, an agent of an insurance company is generally immune from suits brought by claimants for actions taken while the agent was acting within the scope of its agency. Therefore... Chaix owed neither Pacific... nor Riahi a duty of care. In the absence of a duty of care... Chaix cannot breach a duty of care. [¶] 4.... Chaix’s alleged conduct caused no damages because, even if the Certificate of Liability... issue by Boswell, [Sanchez’s] retail agent, could amend policy No. SCP0530273, which it cannot, no coverage would exist for this loss because the Certificate of Liability... dated March 8, 2005[, ] post-dates the loss by approximately [five] months. [¶] 5.... Chaix’s alleged conduct also caused no damages because, even if the additional insured endorsement was issued... no coverage would exist for this loss because... the endorsement applied only to [Sanchez’s] ‘ongoing operations, ’ and [Sanchez] completed its operations on October 4, 2004, before the... endorsement was issued on March 8, 2005. [¶] 6. The mutual release of claims executed by Pacific and Riahi dated December 19, 2008, bars Pacific... from sustaining prospective third party liability to Riahi. Thus, [Pacific and Riahi] can assert no damages. [¶] 7. Because none of the elements of a negligence cause of action are satisfied... Chaix’s motion for summary judgment is granted.” The court declined to consider or issue rulings on objections to the separate statements. As for evidentiary objections, it granted Pacific’s and Riahi’s evidentiary objections Nos. 1 and 3 but overruled objection No. 2. It granted Chaix’s evidentiary objections Nos. 4 and 16. It denied all the others.
One week later, the court granted Boswell’s motion. In the order it stated Boswell was entitled to a judgment as a matter of law because, “The alleged failure of Boswell to obtain an additional insured endorsement on form CG2010 (07/04) in favor of either [Pacific or Riahi] to Western[s] policy No. SCP0530273 did not cause any damage to [Pacific of Riahi] or either of them. [¶] This determination is based on the following evidence: Policy No. SCP0530273 obligates [Western] to defend and indemnify an insured in ‘suits’ seeking damages because of ‘bodily injury, ’ ‘property damage, ’ ‘personal injury, ’ and ‘advertising injury.’ (Policy at BOS000011, 15 (Exhibit ‘B’ to Boswell’s [c]ompendium of [e]xhibits (‘Compendium’)).) That policy defines ‘suit’ as a civil proceeding, arbitration, or other alternative dispute resolution proceeding seeking damages because of ‘bodily injury, ’ ‘property damage, ’ ‘personal injury, ’ and ‘advertising injury.’ (Policy at BOS000025 (Exhibit ‘B’ to Compendium).) [Pacific and Riahi’s] operative complaint does not allege that a ‘suit’ was ever filed against either [of them] which would have provided coverage to either [of them, ] under policy No. SCP0530273 had Boswell obtained an additional insured endorsement. (See [s]econd [a]mended [c]omplaint....) [Pacific and Riahi] have presented no evidence in opposition to the motion to show that ‘suit’ was filed against either of them that would have been covered under [the p]olicy... had Boswell obtained an additional insured endorsement.... [¶] The [c]ourt overrules Boswell’s evidentiary objections in their entirety.”
Pacific and Riahi filed a motion for new trial as to the judgment in favor of Western on the ground they found new evidence raising triable issues of material fact about whether Western’s guidelines permitted Western to recognize Certificates of Liability as additional insured endorsements. The court denied the motion.
II
A. Standard of Review
“A defendant moving for summary judgment has the burden of producing evidence showing that one or more elements of the plaintiff’s cause of action cannot be established, or that there is a complete defense to that cause of action. [Citation.] The burden then shifts to the plaintiff to produce specific facts showing a triable issue as to the cause of action or the defense. [Citations.] Despite the shifting burdens of production, the defendant, as the moving party, always bears the ultimate burden of persuasion as to whether summary judgment is warranted. [Citation.]” (Garcia v. W & W Community Development, Inc. (2010) 186 Cal.App.4th 1038, 1041 (Garcia).)
“On appeal, we review de novo an order granting summary judgment. [Citation.] The trial court must grant a summary judgment motion when the evidence shows that there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. [Citations.] In making this determination, courts view the evidence, including all reasonable inferences supported by that evidence, in the light most favorable to the nonmoving party. [Citations.]” (Garcia, supra, 186 Cal.App.4th at p. 1041.) Although “the court may not weigh the plaintiff’s evidence or inferences against the defendants as though it were sitting as the trier of fact, [the court] must nevertheless determine what any evidence or inference could show or imply to a reasonable trier of fact.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 856.)
“In reviewing the propriety of an order granting summary judgment, we ‘apply the same three-step analysis required of the trial court. We begin by identifying the issues framed by the pleadings since it is these allegations to which the motion must respond. We then determine whether the moving party’s showing has established facts which justify a judgment in movant’s favor. When a summary judgment motion prima facie justifies a judgment, the final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue.’ [Citation.] If there is no triable issue of material fact, ‘we affirm the summary judgment if it is correct on any legal ground applicable to this case, whether that ground was the legal theory adopted by the trial court or not, and whether it was raised by defendant in the trial court or first addressed on appeal.’ [Citation.]” (Garcia, supra, 186 Cal.App.4th at pp. 1041-1042.)
B. Western’s Summary Judgment
In light of the above, we therefore begin by identifying the issues framed by the pleadings. The complaint alleged Pacific and Riahi were insureds to Western’s policy issued to Sanchez. It alleged failure to pay their claimed damages was (1) a breach of the contract, and (2) a breach of the implied covenant of good faith and fair dealing. Similarly, the declaratory relief cause of action sought a ruling on whether Western had a duty to pay damages. The court determined these claims failed as a matter of law because the policy issued to Sanchez did not name any additional insureds, and the Certificate of Insurance was issued by Boswell and could not amend the policy as a matter of law. Western had no duty to pay/indemnify Pacific or Riahi as a matter of law.
In their briefing, Riahi and Pacific often refer to themselves jointly as having the same rights under the insurance policy and the same damages. This is incorrect and confusing. Although the homeowner, Riahi, is the sole owner of Pacific, it was undisputed only the corporate entity (Pacific) asked to be added as an additional insured (not Riahi individually). As such, Pacific (not Riahi) could allege damages relating to the failure to be added to the policy. Riahi, individually, was never intended to be an additional insured on the policy and thus his claim for damages arise merely from his ownership of Pacific or personally as a landowner. He did not have a separate right to sue the insurance entities. Having clarified Riahi’s limited role in this litigation, our discussion refers to Pacific (the intended additional insured) to avoid further confusion.
On appeal, Pacific alleges there exists a triable issue of fact as to whether Boswell “had ostensible authority to issue the certificates, which, while not formal amendments to the policy, were used as the notification to [Pacific that it was] covered.” However, this theory was not raised below in the opposition to the summary judgment motion. The opposition and separate statement focused on the theory Western’s liability arises from its failure to notify anyone when it did not issue the endorsement.
“The appellate court can deem an argument raised in an appeal from a grant of summary judgment waived if it was not raised below and requires consideration of new factual questions.” (Zimmerman, Rosenfeld, Gersh & Leeds LLP v. Larson (2005) 131 Cal.App.4th 1466, 1488.) The agency theory indisputably raises factual questions not addressed in Pacific’s separate statement or the evidence. We therefore deem the argument waived.
Moreover, Pacific cannot meet its burden of proving a triable issue of fact on this issue. Western established its agent was Chaix, shifting the burden to Pacific to produce evidence suggesting Boswell was also Western’s agent. “[A] principal is bound by acts of his ostensible agent to those persons ‘who have in good faith, and without want of ordinary care, incurred a liability or parted with value, upon the faith thereof.’ Liability of the principal for the acts of an ostensible agent rests on the doctrine of ‘estoppel, ’ the essential elements of which are representations made by the principal, justifiable reliance by a third party, and a change of position from such reliance resulting in injury. [Citations.]” (Preis v. American Indemnity Co. (1990) 220 Cal.App.3d 752, 761 (Preis).) “To establish ostensible authority in an agent, it must be shown the principal, intentionally or by want of ordinary care has caused or allowed a third person to believe the agent possesses such authority.” (Ibid; see also Civ. Code, §§ 2300, 2317.)
“Ostensible authority must be established through the acts or declarations of the principal and not the acts or declarations of the agent. [Citation.] However, the doctrine of ostensible authority extends to subagents; hence the principal is similarly liable to third persons for representations made by subagents. [Citation.] Also, where the principal knows that the agent holds himself out as clothed with certain authority, and remains silent, such conduct on the part of the principal may give rise to liability. [Citation.]” (Preis, supra, 220 Cal.App.3d at p. 761.)
Looking first to Boswell’s Certificates of Insurance, there is nothing in the form to indicate that Western participated in its issuance, reviewed it, or in any way endorsed it. The certificate was issued on a standard form rather than Western’s letterhead, and the “producer” of the certificates is identified only as Boswell Insurance Agency. Further, the certificate was signed only by “authorized representative” Joe Boswell, who worked for Boswell, not Western. Finally, the certificate clearly states in bold type, “This Certificate is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend or alter the coverage afforded below.” (Capital letters and bold omitted.) There is no evidence raising a triable issue of fact that Pacific could have reasonably believed based on the certificate itself that Western was responsible, either intentionally or through lack of ordinary care, for its issuance.
Aside from the certificate, there was no other evidence in the record proving that Western knew Boswell was holding itself out as “clothed with certain authority, ” yet remained silent. (See Preis, supra, 220 Cal.App.3d at p. 761.) Pacific and Riahi point to no evidence suggesting that Western intentionally, or through lack of ordinary care, authorized Boswell to add anyone as additional insureds under Western’s policy with Sanchez. And, more importantly, substantial evidence proves otherwise. It was undisputed Western had selected Chaix as its agent in California. Pacific conceded Boswell was not a surplus lines broker for Western, it was a retail broker representing Sanchez. There is no evidence Boswell had authority to issue an additional insured endorsement on behalf of Western or to alter the terms of Western’s policies.
Alternatively, Pacific contends the Certificate of Insurance served to amend Western’s policy. It argues there is a triable issue as to whether the Certificate of Insurance’s specific language indicating coverage “vitiates the boilerplate language that it does not.” This argument is incorrectly premised on the theory Insurance Code section 384’s mandatory boilerplate exclusionary language does not apply to surplus line carriers such as Western.
“A certificate of insurance is merely evidence that a policy has been issued. [Citation.] It is not a contract between the insurer and the certificate holder.” (Empire Fire & Marine Ins. Co. v. Bell (1997) 55 Cal.App.4th 1410, 1423, fn. 25.) Insurance Code section 384, subdivision (a), requires that a certificate contain words warning it “is not an insurance policy and does not amend, extend or alter the coverage afforded by the policies listed...” as was provided on the certificate in this case. Subdivision (b) provides, “This section is not applicable to a surplus line broker certificate as defined in [s]ection 48.” In other words, surplus line carriers such as Western can write out their own certificates. However, as Western correctly points out, this section does not preclude a surplus line carrier from utilizing the “exclusionary language” set forth in subdivision (a). Use of California’s statutory exclusionary language in the certificate was appropriate and should not be ignored.
Moreover, Pacific overlooks the fact the certificate at issue was prepared by Boswell, not Western’s agent Chaix. Its legal discussion of certificates Chaix could issue on behalf of Western under Insurance Code section 1764 is inapt. Chaix did not issue the certificate of insurance. And it was undisputed Boswell had no authority to issue an additional insured endorsement or alter the terms of Western’s policy. As noted above, it was conceded Boswell was not Western’s surplus lines broker or agent. The contention the exclusionary language can be ignored is simply a red herring.
Similarly, Pacific’s claims relating to breach of the implied covenant of good faith and fair dealing fail as a matter of law. Pacific’s assertion there is a triable issue of fact as to whether Western acted unreasonably by failing to disclose it would not underwrite the endorsement is meritless. The facts are undisputed Western owed no duty to provide Pacific coverage under Sanchez’s policy. Pacific and Riahi were never parties to the policy, and no policy benefits were due to them. And because Western was not in privity of contract with Pacific or Riahi it owed them no other duty to perform.
Pacific suggests liability can be based on Western’s breach of a regulatory duty contained in the Fair Claims Settlement Practices Regulations. (Cal. Code Regs., tit. 10, § 2695.4, subd. (a).) Pacific asserts that when Western’s adjuster told Riahi his claims would be covered, and Riahi assumed this confirmed Pacific was insured, Western necessarily breached its duty to disclose coverage limits as required by the regulations. (Cal. Code Regs., tit. 10, § 2695.4, subd. (a) [“Every insurer shall disclose to a first party claimant or beneficiary, all benefits, coverage, time limits or other provisions of any insurance policy issued by that insurer that may apply to the claim presented by the claimant”]).) This is another red herring.
“Regulations enacted by the Department of Insurance require certain disclosures by insurers in connection with claims presented. Section 2695.4, subdivision (a), requires an insurer to notify its insured claimant of contractual limitations provisions and other policy provisions that may apply to the claim.” (Superior Dispatch, Inc. v. Insurance Corp. of New York (2010) 181 Cal.App.4th 175, 188[material fact whether failure to disclose contractual limitations provision in liability policy gives rise to equitable estoppel and precluded summary judgment] (Superior Dispatch).) As aptly noted by the trial court, the Supreme Court decided in Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287, 304 (Moradi-Shalal), that violations of regulations cannot create private causes of action against an insurer. Enforcement of these regulations is left to the insurance commissioner.
The one case Pacific relied upon, Superior Dispatch, related to whether violation of a regulation can give rise to equitable estoppel as a defense, protecting the insured when the insurer failed to disclose a one-year limitations provision. (Superior Dispatch, supra, 181 Cal.App.4th at p. 190.) Pacific has no authority to support its claim the Supreme Court got it wrong in Moradi-Shalal and purported regulatory violation creates a private cause of action for breach of the implied covenant of good faith and fair dealing.
C. Chaix’s Summary Judgment
Pacific alleged only one cause of action against Chaix for negligence. In order to prevail on this cause of action a plaintiff must demonstrate he or she suffered actual harm. “‘The mere breach of... duty, ’ we said, ‘causing only nominal damages, speculative harm, or the threat of future harm—not yet realized’ normally ‘does not suffice to create a cause of action....’” (Davies v. Krasna (1975) 14 Cal.3d 502, 513). In this case, Pacific alleged Chaix owed it a duty of care as a third party beneficiary of the insurance to be produced by Western, and breached its duty by failing to issue the additional insured endorsement. Before examining a potential duty of care, however, Pacific must demonstrate it suffered harm.
Pacific alleges Western’s additional insured endorsement would have provided retroactive coverage to the start of Sanchez’s work or to the inception of the policy, whichever is later. There is no dispute Western would have used the standard CG2010 endorsement form if it had added Pacific as an additional insured. This form states an additional insured endorsement extends coverage for property damage or bodily injury caused “in whole or in part, by: [¶]... [¶]... The acts or omissions of those acting on your behalf; [¶] in the performance of your ongoing operations for the additional insured(s) at the location(s) designated above.” (Italics added.)
Chaix asserts that under the terms of this endorsement, Pacific would not be covered because Sanchez completed all its work five months before Pacific received the Certificate of Insurance and believed it was an additional insured. If Western had issued the additional insured endorsement, the policy would not have covered a loss that had already occurred especially because Sanchez’s operations had long since terminated. We agree with Chaix. In Pardee Construction Co. v. Insurance Co. of the West (2000) 77 Cal.App.4th 1340, 1358-1359 (Pardee), the court explained, “in 1993, the Insurance Service Office (ISO) revised the language of the form 2010 endorsement utilized by the insurance industry to expressly restrict coverage for an additional insured to the ‘ongoing operations’ of the named insured. This revised language effectively precludes application of the endorsement’s coverage to completed operations losses. [Citation.]” (Fn. omitted.)
It was undisputed Sanchez completed all its grading, clean up, and excavation services at the property by October 2004. However, Chaix did not receive the Certificate of Insurance until March 9, 2005, which was five months after the project was completed. Accordingly, no coverage would have been granted to Pacific by Western under the restrictions of the insurance had Chaix issued the additional insured endorsement. Without alleging an actualized harm, Pacific has no cause of action against Chaix.
Pacific’s reliance onthe Pardee case to support its argument is misplaced. In Pardee, supra, 77 Cal.App.4th at page 1346, a construction defect case, the general contractor’s contract required the subcontractors to name it as an additional insured on their commercial general liability policies including completed work coverages. The subcontractors complied, but the relevant policies were issued following completion of the project. (Id. at p. 1347.) The additional insured endorsements were not limited, as here, to “ongoing operations” but instead specified “operations, ” as well as “all operations.” The owner sued for construction defects, and the general contractor submitted the litigation to several subcontractors’ carriers for a defense and indemnification. The court held the endorsements included completed operations and required the insurers to provide a defense. (Id. at pp. 1344-1345.)
To support its reasoning, the court in Pardee stated that if the insurers wished to exclude completed operations, they need only have used additional insured endorsements similar to CG2010. (Pardee, supra, 77 Cal.App.4that pp. 1358-1359.) The court explained the ISO’s 1993 revision of form CG2010 “utilized by the insurance industry” expressly restricted coverage to the ‘ongoing operations’ of the named insured.” (Ibid.) It noted, “One insurance commentator stated regarding the 1993 revisions of the standard additional insured endorsement forms: ‘The restriction of coverage in the two endorsements to only ongoing operations makes it clear that additional insureds will have no coverage under the named insured’s policy for liability arising out of the products-completed operations exposure.... The effect of this change—restricting the coverage to ongoing operations—is, however, much more profound on [form CG2010]. Previous editions of [that form] contained no completed operations exclusion and, thus, could be called on to cover an additional insured for liability arising out of the products-completed operations hazard.’ [Citation.]” (Id. at pp. 1538-1539.) Pacific’s claim there would be retroactive coverage if Chaix had issued the additional insured endorsement when requested in March 2005, fails as a matter of law.
D. Boswell’s Summary Judgment
The second amended complaint alleged breach of contract, negligence, and negligent misrepresentation against Boswell. These claims are all premised on Boswell’s failure to secure an additional insured endorsement on Sanchez’s policy for Pacific. Causation and damages are essential factors in each of these claims. (National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50 [elements of negligent misrepresentation]; Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178 [standard elements of a claim for breach of contract]; Century Surety Co. v. Crosby Ins., Inc. (2004) 124 Cal.App.4th 116, 127 [cause of action for negligence of insurance broker].) We need not review the trial court’s ruling regarding the lack of causation because we conclude the lack of proof of damages is dispositive. Pacific failed its burden of proving there existed the potential for a third party suit following its $250,000 settlement with Sanchez that would have been covered under the policy had Boswell obtained the additional insured endorsement.
Our analysis begins with a determination of the scope of coverage for an additional insured under Sanchez’s policy. We note Pacific and Riahi’s complaint makes several vague allegations about first party claims. But Sanchez applied for a commercial general liability policy covering only third party claims against Pacific. This is a distinction in legal terminology that makes a difference.
The terms are defined as follows: “‘First party’ insurance policies provide coverage for loss or damage sustained by the insured (e.g., life, disability, health, fire, theft and casualty insurance). ‘Third party’ insurance policies provide coverage for liability of the insured to another (e.g., comprehensive general liability, directors and officers liability and errors and omissions insurance). [Citation.] [¶] ‘First party bad faith lawsuits’ involve an insured’s claims against the insurer under coverages written for the insured’s direct benefit under a first party policy. [Citation.] The gravamen of a first party lawsuit is a breach of the implied covenant of good faith and fair dealing by refusing, without proper cause, to compensate the insured for a loss covered by the policy [citation], or by unreasonably delaying payments due under the policy [citation]. [¶] ‘Third party bad faith lawsuits’ (as they exist post-Moradi-Shalal[, supra, ] 46 Cal.3d 287) generally involve an insured’s suit against his liability insurer arising out of the insurer’s mishandling of a third party claim against its insured, such as by unreasonably refusing to settle within policy limits [citation] or unreasonably refusing to provide a defense in a third party action [citation].” (Waters v. United Services Auto. Assn. (1996) 41 Cal.App.4th 1063, 1069-1070.)
Here, Sanchez’s policy did not offer first party coverage. Even if Boswell had been successful in obtaining an additional insured endorsement to the policy, it would not cover any loss or damages independent of a third party claim being made against Pacific or Sanchez.
The policy’s coverage provision expressly provided for third party coverage: “We will pay those sums that the Insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies. We will have the right and duty to defend the Insured against any ‘suit’ seeking those damages. However, we will have no duty to defend the Insured against any ‘suit’ seeking damages for ‘bodily injury’ or ‘property damage’ to which this insurance does not apply. We may, at our discretion, investigate any ‘occurrence’ and settle any claim or ‘suit’ that may result....”
Moreover, it must be remembered the types of third party claims covered under the CGL policy are limited. Generally, “Coverage will therefore be found unless the... exclusion conspicuously, plainly and clearly apprises the insured that certain acts of ordinary negligence... will not be covered. [Citation.]” (MacKinnon v. Truck Ins. Exchange (2003) 31 Cal.4th 635, 649.) One such exclusion applicable here, found in paragraph (j)(5), provides the insurance company will not pay for property damage to “[t]hat particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations.” In short, the policy excludes coverage for work within the contractor’s own control but protects contractors against consequential damages.
Moreover, it is well established that CGL policies do not provide coverage “for intangible property losses, including economic losses. [Citations.]” (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 27.) Thus, if Pacific had been named an additional insured it would only have been entitled to the same third party claim liability as Sanchez and no more. Western would indemnify and defend for liability arising out of the acts or omissions by Sanchez that related to tangible property other than the insured’s own work, caused by the insured’s defective work.
Summary judgment here was based on the trial court’s conclusion there was no lawsuit alleging losses or damages relating to a third party claim that would have been covered if Pacific was insured. Both parties focus on whether the absence of a third party “suit” is dispositive as a matter of law. We conclude it is not. Nevertheless, summary judgment was properly granted due to the absence of allegations in the complaint or a triable issue of fact concerning a potential third party claim coveredby the policy.
Roger H. Proulx & Co. v. Crest-Liners, Inc. (2002) 98 Cal.App.4th 182 (Proulx), cited by both parties, is instructive. In Proulx, plaintiff (Proulx) subcontracted to furnish and install roofing and waterproofing on a commercial building, and it was required to install a waterproof liner in a tank that was part of the building’s air conditioning system. In turn, Proulx hired another subcontractor (Crest-Liners) to install the liner. The tank leaked and “damaged certain pumps and valves, caused the waste of nearly half a million gallons of water... and prevented the use of the air conditioning and other systems.” (Id. at pp. 189-190.) Proulx’s repair attempts were unsuccessful, and the contractor (Turner) demanded that Proulx remove and replace the liner. When Proulx did not respond, Turner declared it in default of the subcontract and demanded costs associated with the leaky liner, including “such items as ‘Painting in an office area, ’ ‘Replace DP transmitter in valve pit, ’ ‘Repair office area, ’ and ‘Patch Drywall, ’ in addition to costs associated with replacing the defective waterproof liner.” (Id. at p. 190.)
Proulx settled with Turner and then sued an insurance broker (J&H) for negligence in failing to name it as an additional insured under Crest-Liners’ CGL policy. (Proulx, supra, 98 Cal.App.4th at p. 188.) J&H moved for summary judgment on numerous grounds, including the lack of causation and damages, arguing that the policy “would not have covered Turner’s claim against Proulx, even if Proulx had been an additional insured, for three reasons: (1) the policy obligated the insurer to defend and indemnify only if a lawsuit was filed against the insured, and Turner had not filed a lawsuit; (2) the policy only covered ‘bodily injury’ or ‘property damage’ caused by an ‘occurrence’ as those terms are defined in the policy, and Turner’s claim was for economic loss for breach of contract, which claim is not covered; and (3) the policy prohibited an insured from voluntarily making a payment or settling a claim without the insurer’s consent, and Proulx had voluntarily made payments to or settled with Turner.” (Id. at p. 191.)
The trial court granted summary judgment on the ground there was no dispute Turner’s breach of contract claims were not covered by the policy. (Proulx, supra, 98 Cal.App.4th at p. 188.) The appellate court reversed the summary judgment, explaining: “Proulx’s cause of action against J&H, a professional negligence claim, is similar to a legal malpractice claim, in that liability must be established in a case-within-a-case. Just as a plaintiff in a legal malpractice case must establish that it would have prevailed in the underlying action but for the defendant’s professional negligence, Proulx can recover on its cause of action against J&H only if it can show that, but for J&H’s negligence, Proulx would have had at least some coverage for Turner’s claim under the National Union policies. Without such a showing, there is no cause of action because there are no damages caused by the breach of the professional’s duty. [Citations] Thus, in addressing the causation element of Proulx’s negligence claim in J&H’s motion for summary judgment, J&H attempted to establish that Crest-Liners’ policies would not have provided coverage to Proulx for Turner’s claim if Proulx had been an additional insured under those policies.” (Id. at pp. 195-196.)
The appellate court in the Proulx case determined there was a triable issue of fact as to whether Turner’s claim was for “property damage” covered under the policy. (Proulx, supra, 98 Cal.App.4th at p. 196.) It reasoned, “Proulx contends that there was evidence of property damage caused by Crest-Liners’ work and that this evidence raises a triable issue because, regardless of Turner’s legal theory for recovery (breach of contract or tort), the damages Turner sought were ‘because of’ property damage, as required for coverage under Crest-Liners’ insurance policies. Crest-Liners’ policies provided that National Union would ‘pay those sums that the insured becomes legally obligated to pay as damages because of... “property damage” to which this insurance applies.’... To be covered under a commercial general liability (CGL) policy, such as the policy in this case, the ‘property damage’ must be to tangible property other than the insured’s own work, caused by the insured’s defective work. [Citation.] [¶] The ‘focus [should be] on the nature of the risk and the injury, in light of the policy provisions, ’ rather than on the form of action chosen by the injured party, when determining whether a claim is covered. [Citation.]” (Ibid.)
The court ruled, “the issue here is whether at least some of the damages Turner sought to recover were ‘because of’ ‘property damage’ as those terms are used in the insurance policies at issue, regardless of whether Turner sought those damages under a contract theory or a tort theory. In moving for summary judgment, J&H submitted (among other things) a document that on its face suggests that at least some of the damages Turner sought to recover from Proulx were ‘because of’ ‘property damage.’ That document, a summary of Turner’s claim against Proulx, lists costs associated with repairing damage to property other than the liner Crest-Liners installed in the glycol tank, which damages apparently were caused by the leaking liner. In addition, J&H submitted other documents in which reference is made to damage to other property, which damage also was caused by the leaking liner. This evidence suggests that the leaking liner caused ‘physical injury’ to ‘tangible property’ other than the liner itself, for which Turner sought reimbursement (albeit, under a breach of contract theory). Thus, J&H’s own evidence raises a triable issue regarding whether Turner’s claim was for damages ‘because of’ ‘property damage.’” (Proulx, supra, 98 Cal.App.4th at p. 197.) It concluded, “Because J&H failed to meet its burden of production to establish that Turner’s claim against Proulx did not seek to recover for at least some ‘physical injury’ to property other than the liner (i.e., damages ‘because of’ ‘property damage’), J&H is not entitled to summary judgment on the ground that there was no alleged ‘property damage.’ [Citation.]” (Ibid.)
The appellate court in Proulx also rejected the other arguments made by J&H for summary judgment. J&H had argued there would not have been coverage under the policy due to Turner’s failure to file a lawsuit against Proulx to recover damages. (Proulx, supra, 98 Cal.App.4th at p. 198.) It argued the CGL policy gave the insurer the discretion to investigate and settle a “claim” and it was only required to defend a “suit” under the policy terms. (Ibid.) The court rejected this argument, explaining “J&H’s failure to add Proulx as an additional insured is analogous to an insurer’s wrongful denial of coverage. Courts have held that an insurer waives defenses of noncompliance with policy provisions when it wrongfully denies coverage. [Citations.] Just as an insurer cannot assert a ‘no suit’ defense if it has wrongfully repudiated its policy, J&H cannot assert that defense when it negligently failed to obtain coverage for Proulx under Crest-Liners’ policy. Having been left without any insurance coverage as a result of J&H’s alleged negligence, Proulx was not required to force Turner to file a lawsuit against it so it could later argue that National Union would have been obligated to defend it had J&H obtained the desired insurance coverage.... Proulx submitted sufficient evidence from which a trier of fact may determine the type and scope of damages Turner sought to (and apparently did) recover from Proulx. The trier of fact could reasonably conclude that Turner would have alleged those damages had it been forced to file a lawsuit against Proulx. At trial, Proulx may seek to recover from J&H those damages that would have been covered under the National Union policy. (See Clemente v. State of California (1985) 40 Cal.3d 202, 219 [holding that plaintiff is entitled to recover damages despite inability to prove damages with certainty when that inability is due to defendant’s actions].)” (Proulx, supra, 98 Cal.App.4th at pp. 198-199, fn. omitted.)
Returning to the case at hand, we have a similar issue with respect to whether there were third party claims covered by the policy. Unlike the Proulx case, we conclude neither the complaint, nor the opposition to the separate statement raises a triable issue of fact in this regard.
When Sanchez broke the water pipe several third party claims arose. Two property owners, the Murrays and Riahi, claimed to have suffered property damage by the water pipe breaking. Pacific did not pay the Murrays’ third party claim, but rather Western paid them directly under the terms of Sanchez’s policy and it obtained from them a release of further claims. Pacific does not claim the Murrays requested any additional damages.
This left potential claims from Riahi, the City, and the Water District. However, Pacific admitted it paid clean-up costs charged by the City ($4,883.24) and the Water District ($7,714.15). Pacific sent Sanchez a summary breakdown of damages caused by the waterline damage before filing a lawsuit. The list included the City and Water District bills. In addition, there were charges totaling over $23,700 for clean up, debris removal, and structural engineer and construction services. Pacific sued Sanchez for breach of contract and negligence, seeking $100,000 in damages. The complaint mentioned nothing about insurance or a failure to provide insurance coverage. Pacific and Sanchez reached a $250,000 settlement that Western paid on behalf of its insured Sanchez. As part of the settlement, the parties waived all litigation costs and fees.
In its motion for summary judgment, Boswell asserted that following settlement of Pacific’s lawsuit against Sanchez there were no more potential third party lawsuits to be filed against Pacific that would have been covered by the policy if Pacific had been named as an additional insured. It alleged Western resolved all outstanding claims when it paid Pacific $250,000. Accordingly, the burden shifted to Pacific to raise a triable issue of material fact there still existed third party liability covered by the policy.
The trial court correctly concluded Pacific failed its burden in this regard. The opposition and Riahi’s supporting declaration were too vague and conclusory to raise a triable issue of fact. To summarize, Riahi generally alleged the $250,000 did not completely indemnify him for his losses which exceeded $700,000. He asserted that due to a tolling agreement he signed with Pacific, he could still sue Pacific to recover these damages and if Pacific had been named an additional insured, Western would indemnify and pay attorney fees to defend the claim.
However, as noted in the Proulx case, coverage depends on the cause of the third party claim because not every kind of damage is covered by a CGL policy. (Proulx, supra, 98 Cal.App.4th at p. 197 [“the issue here is whether at least some of the damages Turner sought to recover were ‘because of’ ‘property damage’ as those terms are used in the insurance policies at issue, regardless of whether Turner sought those damages under a contract theory or a tort theory”].) Western would only be obligated to pay for damages covered by the policy. Thus, itwas not enough to allege there exists a possible claim for $450,000 ($700,000 minus $250,000) without proof of the nature or cause of the damages to establish coverage. Pacific and Riahi failed their burden of proof in this respect.
At oral argument, Pacific and Riahi’s counsel conceded the only damages still outstanding consists entirely of attorney fees incurred in their litigation with Sanchez. In essence, they assert litigation costs incurred to sue the primary insured should be covered by this CGL policy. We disagree.
Pacific and Riahi failed to provide authority to support their theory coverage exists that will pay the costs for an additional insured to prosecute a lawsuit against a primary insured. Certainly, Pacific could independently contractually obligate Sanchez to pay attorney fees if it prevails in litigation arising from that contract. But as an additional insured to Sanchez’s policy with Western, we fail to find any language in the policy that would cover costs to prosecute a claim. There is only a duty to pay costs to defend lawsuits brought by third parties raising claims covered by the policy.
In Lomes v. Hartford Financial Services Group, Inc. (2001) 88 Cal.App.4th 127, 133, the court held a CGL policy issued to a corporation must be construed to protect the corporation (and its officers and directors) against corporate liability to third parties, not to provide coverage for suits between directors or officers. Similarly, a CGL policy issued to a subcontractor and the contractor (as an additional insured) should be construed to protect the parties insured against third party claims, not to provide coverage for suits between the contractor and the subcontractor.
To the extent Pacific believes it was compelled to sue Sanchez as a “remedial action” or to “mitigate losses, ” we conclude it misunderstands these legal terms as applied to CGL policies. We recognize there are several cases discussing whether different types of mitigation or remediation measures that qualify as “damages to property” under a CGL policy. For example, in AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 813-815 (AIU), the Supreme Court decided insurers were obligated to provide coverage under their CGL policies to a corporation (FMC) for any environmental cleanup and response costs awarded in third party suits against FMC by several administrative agencies under environmental laws. In addressing this issue, the court resolved three questions determinative to coverage. First, the court held FMC would be “legally obligated” to pay cleanup costs by any adverse orders issued in the third party suits because “legally obligated” includes equitable relief like injunctive relief and recovery of response costs. (Id. at p. 818.) Second, the court held the response costs, including reimbursement of government response costs and the costs of compliance with injunctions, constitute “damages” under the CGL policies. (Id. at pp. 825-842.) Third, the court held government claims for injunctive relief and environmental cleanup costs, with the exception of prophylactic costs, allege “property damage” under the CGL policies. (Id. at pp. 842-843.) Simply stated, the court held the term “legally obligated” under a CGL policy covers not only traditional legal damages, but also injunctive relief and recovery of government response costs to clean up environmental pollution. (Id. at p. 825.)
Likewise in Globe Indem. Co. v. State of California (1974) 43 Cal.App.3d 745, 749-753, the court held an insurer was obligated to pay for the costs of fire suppression sought by the state in a suit against the insured after the insured negligently started a forest fire. And more recently, in Watts Industries, Inc. v. Zurich AmericanIns. Co. (2004) 121 Cal.App.4th 1029, 1042-1043, the court held an insurer breached its duty to defend because there was potential for coverage in an action brought by municipalities alleging the insureds’ substandard parts led to water contamination and seeking removal of the parts and water quality monitoring. That court held, “Costs incurred strictly for prophylactic purposes are neither incurred because of property damage nor covered by CGL policies. But remedies which involve remedial or mitigative action constitute covered ‘damages.’ [Citation.] In requesting costs for replacement of... parts and for water quality monitoring, the municipalities seek court-ordered monetary payments due to alleged harm caused by [defendants]. Whether these payments are viewed as traditional damages or as reimbursement of government response costs, they constitute ‘damages’ under AIU. Since the municipalities allege that lead contamination is ongoing, the requested remedies are necessarily at least partly remedial and mitigative, rather than entirely prophylactic, for they address harm which is already occurring, not just harm that might occur. [Citation.]” (Watts, supra, 121 Cal.App.4th at pp. 1040-1041.)
In each of these cases a third party obtained a judgment against the insured, and the dispute was over which “damages” were covered by the policy. Here, by contrast, a third party did not obtain a judgment against Pacific that obligated it to incur mitigation or remedial damages. Pacific’s decision to prosecute a breach of contract and negligence claim against Sanchez created no remedial or mitigating damages recoverable under the CGL policy. Riahi’s claim to recoup attorney fees is not the type of claim that would have been covered if Pacific had been named an additional insured on the policy as a matter of law. Without a triable issue of fact regarding damages, the trial court correctly granted Boswell’s motion for summary judgment.
III
The judgment is affirmed. Respondents shall recover their costs on appeal.
WE CONCUR: FYBEL, J., IKOLA, J.