Facts

Travelers Indemnity Co. of Connecticut and St. Paul Fire and Marine Insurance Co. sued Centex Homes and Centex Real Estate Corp., involving an insurance dispute.

PLAINTIFFS' CONTENTIONS:
Plaintiffs alleged that in January 2014, several homeowners sued Centex for construction defects. Centex then tendered the underlying action to plaintiffs as an additional insured under the policies plaintiffs issued to Golden State Carpet Service Inc. and Mike McCall Landscape Inc. Plaintiffs agreed to defend Centex under a reservation of rights, and appointed a counsel of its choice. In response, Centex retained an independent counsel and insisted plaintiffs pay the independent counsel's fees, and threatened to disqualify plaintiffs' counsel. In response, plaintiffs filed a complaint for declaratory relief, breach of contract, and equitable reimbursement. Plaintiffs argued that Centex had no right to control the defense or a right to retain independent counsel and that it breached its duty to cooperate. Plaintiffs also claimed that Centex's appointment of counsel constituted a voluntary payment for which plaintiffs were not under obligation to reimburse.

DEFENDANTS' CONTENTIONS:
Centex contended that the case should be dismissed for lack of subject matter jurisdiction. Centex also argued that plaintiffs lacked a cognizable claim.

Result

The district court granted Centex's motion to dismiss plaintiffs' breach of contract and equitable reimbursement claims because the claims were not ripe for adjudication. Additionally, plaintiffs' claim for declaratory relief was also not ripe. The court dismissed plaintiffs' claims without prejudice.

Other Information

FILING DATE: May 22, 2014.