What happened: Scottsdale Insurance alleges a fellow insurer settled its own insured out of a slip-and-fall lawsuit but refused to defend the property owner listed as an additional insured on the same policy.
Who's involved: Scottsdale Insurance Company (plaintiff) and Evanston Insurance Company (defendant), with property owner Casa Woodman LLC and general contractor 3M Building & Development in the underlying case.
What's at stake: All defense and indemnity costs Scottsdale says it was forced to pay, plus amounts it expects to pay to resolve the underlying claim - described in the complaint as exceeding $75,000.
Why it matters: The case puts a spotlight on how primary and noncontributory endorsements interact with additional insured tenders - and what happens when one carrier settles selectively.
Where it stands: Complaint filed October 28, 2026, in US District Court, Central District of California.
A property owner's insurer says it got stuck covering a sidewalk slip-and-fall that should never have been its problem - because the contractor's carrier settled its own client out of the case and left everyone else behind.
Scottsdale Insurance Company filed suit against Evanston Insurance Company on October 28, 2026, in the US District Court for the Central District of California. The complaint alleges Evanston refused to defend or cover Casa Woodman LLC - a property owner that qualified as an additional insured on Evanston's policy - even after Evanston had already looked after its own named insured on the same claim.
The facts start with a construction project. Casa Woodman owns the property at 6120 Woodman Ave. in Van Nuys, California. In October 2021, the company hired 3M Building & Development as general contractor to build a 16-unit apartment building. The contract required 3M to carry commercial general liability insurance and to list Casa Woodman as an additional insured. Evanston issued that policy to 3M, with $1 million per occurrence and $2 million aggregate limits.
On May 21, 2023, a woman allegedly slipped and fell on the sidewalk outside the property. She sued 3M in January 2024 for negligence and premises liability. Five months later, she amended the complaint to add Casa Woodman.
Evanston stepped in to defend 3M. It did not do the same for Casa Woodman.
The complaint alleges Evanston settled the claims against 3M - but "failed and refused" to resolve the claims against Casa Woodman, the additional insured under the same policy. By April 22, 2026, the underlying plaintiff had filed for default judgment against Casa Woodman.
Scottsdale says it was not notified of the claims against Casa Woodman until April 27, 2026 - after the default had already been entered. It hired defense lawyers for Casa Woodman on May 12, 2026, and the next day sent a letter confirming it would provide a defense while reserving its right to dispute coverage. The court set aside the default on August 12, 2026.
The heart of Scottsdale's case is a pair of endorsements in the Evanston policy. The first - a Blanket Additional Insured endorsement - extends coverage to anyone 3M was contractually required to insure. That plainly includes Casa Woodman, Scottsdale says, because the construction contract required it. The second - a Primary and Noncontributory endorsement - means the Evanston policy should pay first, ahead of any other insurance the additional insured carries.
In other words, Scottsdale argues Evanston's policy was the front-of-the-line coverage for Casa Woodman on this claim, not Scottsdale's.
Casa Woodman tendered its defense to Evanston under this endorsement. On June 15, 2026, Evanston declined. Scottsdale challenged the denial a week later. Evanston held firm on June 29.
The construction contract between Casa Woodman and 3M required 3M to "take all reasonable precautions for the safety of its employees and the public" and to accept "full responsibility for the acts, negligence and/or omissions of its employees and any subcontractors and their employees," according to the complaint.
Scottsdale is chasing every dollar it spent or will spend on Casa Woodman's defense and any settlement of the underlying claim, plus interest. The complaint does not pin a total figure, stating only that the amounts will be "demonstrated at trial." The federal court has jurisdiction because the two insurers are incorporated in different states and the amount at issue exceeds $75,000.
When a primary carrier settles one insured's exposure and declines coverage for the additional insured on the same policy, the additional insured's own carrier may end up paying both the defense and the settlement tab - and that is exactly the scenario this lawsuit puts before the court.
The allegations in the complaint have not been tested, and no court has ruled on the merits.
