John Podesta, an insurance coverage attorney in San Francisco, brings us his perspective on why the Form Interrogatories for Construction Defect should be used. John has handled hundreds of coverage cases  involving Construction litigation and other complex matters for over twenty years.  He is a nationally known speaker on Insurance Coverage issues in Construction and has written several articles on the subject.  He is also the author of the insurance Interrogatory 304.1 of Construction Litigation Form Interrogatories.

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It is generally recognized that construction defect cases are some of the most expensive, and complicated, cases being litigated in California.  I have personally been involved in cases with more than 75 payors contributing to a settlement, including contractors, insurers, and sureties.  I have witnessed them from the beginning of the modern Special Master programs in the 1980’s through the single assignment Special Masters (both mediator and case management/discovery referee) and the dual reference (where the case manager/discovery referee and the mediator are separated) and cases with no outside supervision and the case is handled per the CCP.  In all these cases, the same question is asked by the carriers:  “How can we get these cases evaluated and resolved quicker and less expensively?”  And the related question: “If this is a case that needs to be tried how can we get to that decision point as soon as possible?
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Your clients have been sued by their insurance company for Declaratory Relief. The insurer asserts that there is no coverage under your clients’ liability insurance policy for a claim made against them. In deciding how to proceed, there are a few things to remember in dealing with insurance litigation. First, the duty to defend is a legal question based upon the “potential” that the lawsuit against your client could result in damages covered by the insurance policy. Montrose Chemical Corp. v. Superior Court (1995) 6 Cal. 4th 287, 300 (pdf). For the duty to defend, therefore, think summary judgment, rather than trial. Second, for indemnity (actual coverage): is the carrier defending or not? With regard to indemnity, whether the insurance company is defending affects the burden of proof. Ultimately, the insured should be prepared to prove, in order to recover indemnity or settlement costs, that their liability is in fact covered by the insurance policy.
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