Mealey's Construction Defects Insurance

  • January 25, 2023

    Insurer Has Duty To Defend Contractor In Underlying Faulty Workmanship Suit

    BOSTON — An insurer had a duty to defend its insured contractor in an underlying lawsuit alleging that faulty workmanship on the part of the contractor and others in the renovation of a building led to the building’s collapse, causing over $1 million in damage, because the claims made against the contractor allege “‘property damage,’ caused by an ‘occurrence,” a federal judge in Massachusetts ruled Jan. 24 in granting the contractor’s motion for partial summary judgment in part and denying the insurer’s motion.

  • January 24, 2023

    Policy Language Bars Coverage To Engineering Firm In Highway Construction Suit

    AUSTIN, Texas — A federal magistrate judge in Texas recommended that an excess insurer’s motion for summary judgment in its coverage dispute with its insured engineering firm stemming from claims made against the insurer an others over a faulty highway construction project because the insurer has sufficiently shown that the plain language of the policies at issue precludes coverage.

  • January 24, 2023

    Subcontractor Fails To Show That Cross-Claim Is Barred By Statute Of Limitations

    LAS VEGAS — A federal judge in Nevada denied a subcontractor’s motion to dismiss a cross-claim for equitable subrogation filed by an insurer in a coverage dispute stemming from mold and moisture-related damages on three construction projects, ruling that the cross-claim is not barred by the statute of limitations and is sufficiently related to the original claim.

  • January 23, 2023

    Contractor’s Amended Reformation Counterclaim Survives Dismissal Bid

    WEST PALM BEACH, Fla. — A federal judge in Florida declined to dismiss a contractor’s counterclaim for reformation against a commercial general liability (CGL) insurer in the insurer’s declaratory relief lawsuit stemming from a subcontractor’s alleged faulty installation of cladding and glazing systems in a construction project, ruling that the contractor’s counterclaim provides “more than sufficient notice” to the insurer and has been properly pleaded.

  • January 23, 2023

    Insurer’s Denial Of Defense To Developer In Defects Suit Was Not In Bad Faith

    SAN DIEGO — A California appellate court panel ruled that a trial court did not err in granting summary adjudication in favor of an insurer on a bad faith claim in a coverage dispute stemming from the insurer’s failure to defend a developer and contractor in a construction defects lawsuit because a genuine dispute existed between the parties at the time the developer and contractor made their request to the insurer to contribute to their defense costs.

  • January 23, 2023

    Insurer Gets Claim Against It Severed From Defects Coverage Suit

    TACOMA, Wash. — A federal judge in Washington granted an insurer’s motion to bifurcate brought by homeowners in a coverage dispute stemming from a construction defects lawsuit over the construction of homes in a housing development, ruling that both convenience and prejudice concerns and judicial economy favor bifurcation.

  • January 19, 2023

    Exclusion Removed Insurers’ Duty To Indemnify Developer In Water Damage Suit

    PASADENA, Calif. — A federal district court did nor err in ruling that insurers had no duty to indemnify a home remodeler in a lawsuit brought by a homeowner in a water damage lawsuit stemming from the installation of a faulty fire suppression system because damage caused after the system unexpectedly activated was excluded under a policy provision, a Ninth Circuit U.S. Court of Appeals panel affirmed Jan. 18.

  • January 18, 2023

    Subrogee Insurer Realigned As Plaintiff In Window Damage Coverage Suit

    BIRMINGHAM, Ala. — A federal judge in Alabama realigned parties in a declaratory judgment action against a general contractor, subcontractor and the general contractor’s insurer stemming from allegedly defective window painting work performed on a home, naming the insurer as plaintiff in the action and requiring the insurer to file an amended complaint in which it states that jurisdiction in the district court exists.

  • January 11, 2023

    Subcontractor’s Appeal In Coverage Suit Over Faulty Welding Work Dismissed

    ATLANTA — The 11th Circuit U.S. Court of Appeals dismissed an appeal brought by an insured subcontractor in a coverage dispute stemming from a lawsuit filed against the subcontractor related to faulty welding performed at a construction project after the parties in the litigation agreed to settle their claims.

  • January 10, 2023

    Failure To Plead Estoppel Doomed Couple’s Claims In Faulty Work Coverage Suit

    ATLANTA — A federal district court did not err in ruling that a general contractor’s insurer was not required to pay $900,000 to a couple for claims of negligence and wantonness brought against the contractor for defective construction of their home because the couple failed to meet their burden of proving estoppel and failed to meet their burden to establish that coverage applied, an 11th Circuit U.S. Court of Appeals panel affirmed Jan. 9 in a per curiam opinion.

  • January 09, 2023

    Faulty Workmanship Exclusion Barred Coverage For Ceiling Collapse Damages

    BATON ROUGE, La. — In a divided opinion, a Louisiana appellate panel affirmed a state trial court’s grant of summary judgment in a lawsuit brought by homeowners stemming from their insurer’s denial of a claim for damages resulting from a ceiling collapse in their home, ruling that the trial court properly determined that a policy exclusion for faulty workmanship barred coverage for the homeowners’ claim.

  • January 09, 2023

    Church Appeals Water Damage No-Coverage Ruling To 6th Circuit

    DETROIT — A church will appeal a grant of summary judgment in favor of an insurer in a water damage coverage dispute stemming from a leaky roof in which a judge ruled that the insurer did not breach its contract with the church by failing to provide coverage because the policy’s negligent work exclusion bars coverage for the claim, according to a notice of appeal filed in Michigan federal court.

  • January 09, 2023

    Insurer Has No Duty To Defend Contractor Against Faulty Pool Design Claims

    SOUTH BEND, Ind. — A commercial general liability insurer has no obligation to defend a contractor against claims made in an underlying lawsuit by a woman alleging that the contractor was negligent in the design and construction of a lap pool at a fitness center because the contractor was not covered under the policy as a corporation and because the woman’s injuries were not the result of an “occurrence” as defined under the policy, a federal judge in Indiana ruled in granting the insurer’s motion for summary judgment.

  • December 21, 2022

    COMMENTARY: Construction Defect Claims: A 2022 Update, Part I

    By Thomas F. Segalla, Michael T. Glascott, Ashlyn M. Capote, Adam R. Durst, Sean P. Hvisdas and Samantha M. McDermott

  • January 05, 2023

    Contractor Ordered To Pay More Than $188,000 In Damages Over Roof Collapse

    ABERDEEN, Miss. — A federal judge in Mississippi issued a final judgment in a lawsuit brought by a commercial property insurer seeking to recover money from a contractor that the insurer paid to its insured after a roof the contractor built collapsed, ordering the contractor to pay $188,700.65 in damages after default judgment was entered against the contractor.

  • January 05, 2023

    Insurer Permitted To File Late Appeal In Duty To- Defend Suit Against Contractor

    LOS ANGELES — A federal judge in California allowed an insurer to file a late notice of appeal in a coverage dispute stemming from construction defects discovered after completion of a mixed-use project, ruling that the insurer has sufficiently shown that the filing delay was the result of excusable neglect pursuant to U.S. Supreme Court precedent.

  • December 28, 2022

    Appeal Of Subrogation Waiver Ruling Dismissed After Parties Reach Settlement

    PHILADELPHIA — In a one-paragraph order, the Third Circuit U.S. Court of Appeals dismissed an appeal of a Pennsylvania federal court’s ruling that insurers cannot bring claims against a contractor and subcontractor in a negligence lawsuit stemming from a property fire because the insurers are subrogees of the owners of the unit that was damaged and a homeowners association, who are subject to a valid subrogation waiver after the parties reached the terms of an undisclosed settlement agreement.

  • December 22, 2022

    Judge: Insurer Has Duty To Defend Paver In Faulty Asphalt Installation Suit

    NEW HAVEN, Conn. — An insurer owed its insured subcontractor a duty to defend in an underlying construction defects lawsuit stemming from the subcontractor’s allegedly faulty paving work in a parking lot because both the allegations made in the underlying lawsuit and information included in a construction management services provider’s report showed that losses sustained were the result of the subcontractor’s allegedly faulty work, a federal judge in Connecticut ruled in granting the subcontractor’s motion for summary judgment and denying the insurer’s competing motion.

  • December 22, 2022

    Court Misapplied Policy Provision In Condensation Damage Coverage Suit

    SEATTLE — A Washington trial court erred in granting summary judgment in favor of an insurer in a coverage dispute with a condominium owner stemming from condensation damage to its roof because the trial court misinterpreted the policy’s resulting loss provision in issuing its ruling, a Division I Washington Court of Appeals panel ruled in reversing and remanding.

  • December 21, 2022

    Insurer Owes No Duty To Indemnify Defendants In Window Damage Suit

    BIRMINGHAM, Ala. — A federal judge in Alabama granted a commercial general liability insurer’s summary judgment motions against defendants in its declaratory judgment lawsuit against a general contractor, subcontractor and the general contractor’s insurer stemming from allegedly window cleaning work performed on a home, ruling that the CGL insurer owes no coverage or indemnification to any party in the action.

  • December 20, 2022

    Court Lacks Jurisdiction Over Contractor’s Coverage Claims Against Insurers

    BOSTON — A federal judge in Massachusetts granted motions to dismiss filed by insurers in a coverage dispute stemming from allegedly faulty installation of flooring at a construction project in New Jersey, ruling that the contractor failed to sufficiently plead that the district court had general or specific jurisdiction to hear the lawsuit.

  • December 20, 2022

    Insureds’ Property Damage Evidence Fails To Show Evidence Of Sudden Collapse

    SEATTLE — A Washington trial court did not err in granting an insurer’s motion for summary judgment in an insurance dispute over a property damage claim related to certain structural damage to a condominium complex’s building due to certain construction defects because the condominium’s owners association failed to provide evidence of an “abrupt or sudden falling down of any part of a building such that it could not be occupied for its intended purpose” as required under the insurer’s collapse coverage provision, a Washington appellate panel affirmed.

  • December 20, 2022

    Connecticut Judge Strikes Some Roof Damage And Mold Claims Against Insurer

    WATERBURY, Conn. — A group of homeowners who claim to have suffered health problems after the roof of their home was allegedly damaged by the installation of solar panels failed to support their pleadings with sufficient facts, a Connecticut judge found in partially granting an insurance company’s motion to strike.

  • December 19, 2022

    Developer Ordered To Produce 6 Email Exchanges In CGL Coverage Lawsuit

    SEATTLE — A federal judge in Washington ordered a developer to turn over six unredacted versions of email exchanges the judge deemed not protected by the work product doctrine in a commercial general liability insurance dispute with insurers stemming from the construction of a Hilton Garden Inn hotel.

  • December 16, 2022

    2 More Insurers Dismissed From Contractors’ Defective Work Coverage Suit

    ALBUQUERQUE, N.M. — Without providing detail, a federal judge in New Mexico issued an order dismissing with prejudice claims brought by a contractor against commercial general liability insurers in a coverage dispute stemming from allegedly defective work performed by insured subcontractors on a residential subdivision.