Facts

: D.W. Johnston Construction was a California licensed general building contractor. It entered into a contract with Porcupine Properties LLC in which Johnston was to construct a residential property in Rancho Mirage. This included construction of a guardhouse. Johnston hired a subcontractor to stain and paint the interior of the guardhouse. The guardhouse was significantly damaged in a fire that resulted from the spontaneous combustion of flammable oily rags that one of the subcontractor's employees had allegedly left inside the building. Porcupine demanded payment for the damage caused by the fire. Johnston voluntarily settled with Porcupine. Johnston then sued First Specialty Insurance Corp., with whom it had a commercial general-liability insurance policy.

PLAINTIFF'S CONTENTIONS:
Johnston contended that First Specialty breached the insurance policy when it failed to indemnify Johnston for Porcupine's claim. It also sought a declaratory judgment that the policy obligated First Specialty to indemnify Johnston for the damage caused by the fire.

DEFENDANT'S CONTENTIONS:
First Specialty denied Johnston's allegations and asserted various affirmative defenses.

Result

The court granted summary judgment in favor of First Specialty because indemnification was limited to damages the insured was ordered to pay by a court and here Johnston sought indemnification for money that was not ordered by a court.

Other Information

FILING DATE: June 20, 2014.