Defendants were sued in an underlying state court action. See Riverport Ins. Co. v. Oakland Cmty. Housing, Inc., No. C 08-3883, 2009 U.S. Dist. LEXIS 104472 (N.D. Cal. Nov. 6, 2009). Defendants were additional insureds under a policy issued by Riverport. In its coverage action for declaratory judgment, Riverport secured an order awarding summary judgment that determined there was not duty to defend or indemnify.
Riverport now moved for summary judgment on defendants' two counterclaims, seeking declaratory relief that defendants were entitled to notice as additional insureds of cancellation of the policy and that Riverside breached its duty of good faith and fair dealing by failing to provide notice of the policy's cancellation. Under California law, the insurer was only obligated to give notice of a policy's cancellation to named insureds. Defendants argued that a certificate of liability insurance they received meant they were named insureds. The court disagreed. The certificate did not constitute an agreement between Riverport and defendants, but was simply evidence that a policy had been issued. Therefore, defendants were not entitled to a declaratory judgment that Riverport should have given them notice of cancellation of the policy.
Moreover, the bad faith claim failed as a matter of law once it was determined defendants were not entitled to notice of cancellation.
