Appellate Court Confirms Dismissal of Glasswerks’ Breach of Contract Claim

The Ninth Circuit Court of Appeals has upheld a district court ruling dismissing a California glass manufacturer’s breach of contract claim with respect to its insurance provider, Liberty Insurance Corporation.

Sweig General Construction Inc., a general contractor, was building a $20 million home in La Jolla, Calif. According to court documents, the design called for approximately 180 lites of large, heavy, specialized glass. The glass package was subcontracted to Giroux Glass Inc., which purchased the lites from Glasswerks LA (GWLA). GWLA fabricated and supplied the finished lites to Giroux for installation.

GWLA purchased stock glass from glass manufacturer AGC before fabricating the glass and delivering it to Giroux. Court documents allege that some of the GWLA glass was defective and had to be replaced. After installation, the glass is reported to have developed pinkish-purple splotches.

Liberty Insurance Corporation, GWLA’s insurer, declined to provide a defense against claims regarding damages brought by Giroux and Sweig per its terms, which dictate a defense against suits and not claims. The matter was settled out of court for $1.3 million.

Glasswerks then filed a claim with respect to its insurance provider. The court granted Liberty’s motion to dismiss that complaint in December 2021. Glasswerks appealed the decision, with findings from that court delivered in May 2022.

“We affirm the district court’s dismissal of Glasswerks’ breach of contract claim because the amended complaint does not allege that any ‘suit’ was ever filed, and thus Liberty did not breach the contract by failing to defend against the third parties’ claims,” the court wrote.

The court also affirmed the dismissal of Glasswerks’ claim for declaratory relief, as well as a number of other claims.

“Because we affirm the district court’s dismissal of all claims without leave to amend against all defendants, we need not reach the question of whether the district court properly dismissed Liberty Mutual Insurance Company, the parent company defendant,” the court wrote.