On July 1, 2025, the U.S. District Court for the Central District of California entered summary judgment in favor of a national homebuilder against its insurance company, United Specialty Insurance Company (“USIC”), holding that USIC had a duty to fully defend the homebuilder against a construction defect claim involving a residential construction project in Perris, California. USIC issued general liability policies to one of the homebuilders’ subcontractors and the policies named the homebuilder as an additional insured.
USIC agreed to defend the homebuilder against the construction defect lawsuit, but refused to reimburse the homebuilder for over $1.9 million in defense fees and costs. USIC argued that it was one of many insurers who owed the homebuilder a defense as an additional insured, and thus it owed only a “share” of the homebuilders’ defense costs. USIC also argued that the homebuilder failed to prove that its defense fees and cost were reasonable and necessary, and that the homebuilder violated the policies’ “voluntary payments” condition by paying defense costs to its chosen defense counsel.
The Court rejected USIC’s arguments, holding that USIC had a duty to fully defend the homebuilder, meaning it must pay all of its insured’s defense costs, not simply a “share.” The Court also found, as a matter of law, that the homebuilders’ defense fees and costs of over $1.9 million were reasonable and necessary, and that USIC must pay them.
The case is titled Pulte Home Company, LLC v. HDI Global Specialty SE, et al., U.S. District Court, Central Dist. of California Case No. CV 24-2171-JFW (PDx).
