Successful summary judgment motion leads to favorable settlement in a declaratory judgment action

The Firm was retained to represent a general contractor in a Declaratory Judgment Action arising out of an insurer’s denial of our client’s tender of defense with respect to an underlying lawsuit involving alleged construction defects. Our client tendered the defense of the underlying action to the insurer based on its status as an additional insured under a policy issued to one of our client’s subcontractors. The underlying construction defect matter settled during the course of the DJA litigation. The parties in the DJA subsequently brought cross-motions for summary judgment. The court granted our motion for summary judgment with respect to the insurer’s duty to defend our client and, while the court determined that fact issues prevented summary judgment on the issue of the insurer’s obligation to indemnify our client completely, the court’s order implied that our client could well be in a favorable position on the indemnity issue should the matter proceed to trial. Based on the favorable summary judgment ruling, the matter was subsequently resolved through mediation with our client and its insurer recovering not only the underlying defense costs, but also a substantial portion of the amount paid to settle the underlying construction defect claim.