Duty to Defend — The Impact of Universal Development, L.P. v. CH2M Hill on California Design Professional Litigation
As all defense counsel, design professionals and insurance adjustors in the State of California know, the holding in Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal. 4th 541 is problematic for cases involving design professionals. Recently, California Court of Appeal for the Sixth District handed down a decision which expands upon the holding in Crawford. The case, Universal Development, L.P. v. CH2M Hill, 2010WL144353 (“UDC”), is an unfortunate one, and is an extension of Crawford [holding an indemnity clause might cause the indemnitor to provide a defense to the indemnitee even if the indemnitor was not itself found negligent] and Ranchwood Communities Limited Partnership v. Jim Beat Construction Co. (1996) 49 Cal. App. 4th 1397 [allowing a contractor who had formed an “illegal bargain” in violation of licensing laws to collect “equitable indemnity” from the indemnitor]. While the UDC case is a California decision, given that it involves an issue of first impression, there is a possibility that decisions in other states regarding duty to defend issues could mirror the rationale used by the Court in UDC. As a result, this decision carries potential implications for design professionals across the country.