Aspen Specialty is pulling numerous insurers into a federal fight over who should pick up the tab to defend a developer on California projects.
On December 2, 2025, Aspen Specialty Insurance Company filed a suit in the US District Court for the Northern District of California against a long list of commercial general liability carriers, seeking court guidance on who must defend Kiper Development, Inc. in a cluster of construction defect cases in Contra Costa County.
At the heart of the dispute are four underlying lawsuits: Freeman, Fleming, Barr and Watterworth, all filed in Contra Costa Superior Court. According to the filing, homeowners in single-family residential developments in Discovery Bay, California, claim construction defects in homes built in projects where Kiper served as developer and/or general contractor.
Aspen says Kiper, through its legal representative, tendered its defense and indemnity in all four actions to Aspen under a commercial general liability policy issued to subcontractor Garland Shower Doors, Inc. dba Repcold Distributors. Aspen states it agreed to defend Kiper, subject to a reservation of rights, and has been paying defense fees and costs in the four cases.
The company then points to a web of policies allegedly issued by other insurers to a range of subcontractors on the projects, including entities involved in plumbing, electrical work, drywall, lath and plaster, painting, landscaping, carpets, fireplaces, stairs, cabinets and appliance distribution. Aspen alleges that Kiper qualifies as an additional insured under many of those policies for liability arising out of the subcontractors’ work on the Discovery Bay developments.
According to the filing, the policies issued by the defendants are commercial general liability forms that include an agreement to defend insureds against suits seeking damages “potentially covered” under the policies, and to pay amounts the insured is legally obligated to pay for covered damages. Aspen’s position is that the homeowners’ claims in the four underlying actions set out damages potentially covered under those policies and therefore require the insurers to share in defending Kiper.
Aspen alleges that, with one exception, the insurers have refused to defend Kiper or have not paid what Aspen considers their equitable share of defense costs. The suit says only The Hanover American Insurance Company has participated, and then only in the Barr action, under a policy issued to Eagle Lath & Plaster, Inc.
Aspen is asking the court for a declaration that each defendant has a duty to defend Kiper in the Freeman, Fleming, Barr and Watterworth suits under its respective policy. It also seeks an allocation of past and future defense fees and costs among the insurers, and equitable contribution on the theory that Aspen has paid more than its fair and proportionate share of Kiper’s defense.
The case is in its early stages and is based solely on Aspen’s allegations. No court has yet ruled on whether any defendant owes a duty to defend Kiper, how defense costs should be divided, or whether Aspen is entitled to reimbursement. For insurance executives, claims leaders and coverage specialists, the filing highlights a familiar battleground: how overlapping commercial general liability programs should share the burden when construction defect litigation hits residential projects in Discovery Bay.
