Mealey's Construction Defects Insurance : Mealey's : Legal News & Analysis

Mealey's Construction Defects Insurance

December 14, 2022
4th Circuit: Reservation Of Rights Letters In Defects Coverage Suit Inadequate

RICHMOND, Va. — A federal district court did not err in ruling that insurers were on the hook for millions of dollars in damages as a result of construction defects caused by their insureds in a townhome construction project because the insurers’ reservation of rights letters were inadequate and “do not provide a basis for denial of coverage,” a Fourth Circuit U.S. Court of Appeals panel held Dec. 13.
December 12, 2022
Insurer Partially Denied Summary Judgment Over Handling Of Storm Damage Claim

MOBILE, Ala. — An insurer is not entitled to summary judgment on a breach of contract claim brought by a church in an insurance dispute over the insurer’s handling of a property damage claim after Hurricane Sally because material issues exist as to whether the damage was caused by the storm or was the result of prior faulty workmanship in making repairs to buildings owned by the church, a federal judge in Alabama ruled Dec. 9 in granting the insurer’s motion in part and denying it in part.
December 12, 2022
Bad Faith Counterclaim In Faulty Work Coverage Suit Deemed Meritless

HONOLULU — A federal judge in Hawaii granted summary judgment in favor of commercial general liability insurers on a bad faith counterclaim brought by a developer in a coverage dispute over whether the insurers owe a contractor and developer a duty to defend in an underlying lawsuit over several construction defects discovered at a condominium project, ruling that the developer’s counterclaim is “procedurally and substantively infirm.”
December 08, 2022
Claims In Pipe Damage Suit Ample Under Direct Action Statute, Defendants Argue

BATON ROUGE, La. — A federal judge in Louisiana should deny an insurer’s motion to dismiss third-party complaints filed by two defendants in a lawsuit stemming from a subcontractor’s misapplication of a mold and mildew prevention product that damaged piping in an apartment construction project because the defendants sufficiently plead a claim under Louisiana’s direct action statute, the defendants argue in opposition briefs filed in Louisiana federal court.
December 01, 2022
Policy’s Negligent Work Exclusion Bars Coverage For Church’s Water Damage Claim

DETROIT — An insurer did not breach its contract in failing to provide coverage for a church’s water damage claim stemming from a leaky roof because the policy’s negligent work exclusion bars coverage for the claim, a federal judge in Michigan ruled Nov. 30 in granting the insurer’s motion for summary judgment.
December 01, 2022
Coverage Suit Over Faulty Concrete Foundation Installation Dismissed

NEW ORLEANS — A federal judge in Louisiana issued an order dismissing a lawsuit filed against a commercial general liability insurer and its insured over the insured’s allegedly negligent pouring of a concrete foundation as part of the construction of a grocery store, ruling that the parties “have firmly agreed upon a compromise agreement.”
December 01, 2022
Contractor Appeals Dismissal Of Faulty Workmanship Coverage Suit To 9th Circuit

LOS ANGELES — A subcontractor will appeal to the Ninth Circuit U.S. Court of Appeals the dismissal of its coverage dispute with its commercial general liability insurer stemming from the faulty installation of a foundation system for a new airport concourse and related improvements at Los Angeles International Airport (LAX), according to a notice of appeal filed in California federal court.
December 01, 2022
District Court Will Decide CGL Insurer’s Attorney Fee, Expense Request

ATLANTA — An 11th Circuit U.S. Court of Appeals panel declined to rule on an insurer’s motion for appellate attorney fees and costs after affirming a federal district court’s dismissal of apartment building owners’ breach of contract lawsuit against their commercial general liability insurer, ruling instead that the insurer’s motion would be transferred to the district court for consideration.
November 30, 2022
Insured Failed To Show Covered Loss To Support Property Damage Claim

MIAMI — A federal judge in Florida granted an insurance company’s motion for summary judgment in a man’s breach of contract dispute over the insurer’s denial of a claim stemming from damages his property sustained during Hurricane Eta, ruling that the insured has failed to sufficiently establish that a covered loss caused the property damage.
November 29, 2022
Summary Judgment In Suit Over Burst Sprinkler System Coupler Denied

DENVER — A federal magistrate judge in Colorado on Nov. 28 denied a fire suppression system installer’s motion for summary judgment in a coverage dispute stemming from a failed dry pipe suppression system in a hotel that damaged the property, ruling that genuine issues of material fact exist as to whether the installer and owner of the hotel entered in to a contract subject to the installer’s terms and conditions.
November 28, 2022
Pollution Exclusion Bars Coverage For Negligent Installation Of HVAC System

TULSA, Okla. — No coverage is owed to an insured heating, ventilation and air conditioning (HVAC) contractor for an underlying suit alleging that the contractor’s negligent installation of an HVAC system caused fiberglass particles to disperse through the underlying plaintiff’s home because a pollution exclusion in the insured’s primary policy clearly bars coverage, an Oklahoma federal judge said in granting the insurers’ motion for summary judgment.
November 28, 2022
Active Controversy Bars Dismissal Of Insurer Suit Over Water Damage Coverage

KANSAS CITY, Kan. — A federal judge in Kansas denied a contractor’s motion to dismiss a coverage dispute filed by a commercial general liability insurer in a lawsuit stemming from water damage claims made at a residential construction project, ruling that dismissal is not warranted because “an active controversy between the parties” still exists.
November 23, 2022
Excess, CGL Insurers Agree To Dismiss Faulty Window Coverage Suit Claims

DALLAS — Without providing further detail, an excess insurer and commercial general liability insurer filed a joint stipulation to dismiss without prejudice in a coverage dispute pertaining to claims made in an arbitration proceeding over alleged defective windows in an apartment building in Texas federal court, requesting that all claims between them be dismissed without prejudice.
November 22, 2022
Contractors’ Claims, CGL Insurer’s Counterclaims In Coverage Suit Dismissed

ALBUQUERQUE, N.M. — Without providing detail, a federal judge in New Mexico issued an order dismissing with prejudice claims brought by a contractor against a commercial general liability insurer in a coverage dispute stemming from allegedly defective work performed by insured subcontractors on a residential subdivision.
November 21, 2022
Judge Conditionally Dismisses Insurer’s Tile Defects Coverage Suit

OAKLAND, Calif. — A federal judge in California issued a conditional order dismissing with prejudice a breach of contract insurance action filed by an insurer against additional insured subcontractors and others related to an underlying action against a general contractor alleging defective tile installation at a housing development after the remaining parties agreed to settle their claims.
November 16, 2022
Insurer’s Reconsideration Bid In Water Intrusion Coverage Suit Fails

SEATTLE — A federal judge in Washington on Nov. 15 denied an insurer’s motion for reconsideration of the judge’s grant of partial summary judgment in a lawsuit brought by a condominium’s apartment owners association seeking coverage for water intrusion damages caused by defects in the construction of the property, ruling that ambiguous policy language does not support the insurer’s interpretation of the policy.
November 15, 2022
Parties File Notice Of Settlement In Insurance Row Over Storm-Damaged Pole Barn

BISMARCK, N.D. — An insurer filed a notice in North Dakota federal court stating that it settled its breach of contract and breach of implied warranty of fitness claims and intends to file a stipulation of dismissal in the action it brought against a manufacturer of pole barns and the subcontractor hired to construct a pole barn, which was later destroyed in a storm.
November 15, 2022
Urban Outfitters Warehouse Builder’s Coverage Suit Against CGL Insurer Dismissed

RENO, Nev. — Without providing details, a federal judge in Nevada issued an order dismissing claims brought by a contractor in a coverage suit against its commercial general liability (CGL) insurer over a lawsuit filed against the contractor for alleged construction defects found after the construction of a warehouse and fulfillment center.
November 15, 2022
CGL Insurers Granted Partial Summary Judgment On Duty-To-Defend Claims

HONOLULU — A federal judge in Hawaii ruled that commercial general liability (CGL) insurers are entitled to summary judgment on claims that they owe a contractor and developer a duty to defend and indemnify in an underlying lawsuit over several construction defects discovered at a condominium project because the insurers have properly shown that the defendants’ work did not cause the alleged property damage and because alleged “rip and tear” damages do not constitute physical damage to the property.
November 10, 2022
Summary Judgment Ruling In Subrogation Suit To Get 11th Circuit Review

MIAMI — A subrogee insurer appealed a federal judge’s denial of summary judgment in its favor and a grant of summary judgment in favor of another insurer in a coverage dispute over payment of policy claims made by a joint venture that oversaw a construction project at a water reclamation facility.
November 10, 2022
Highway Project Coverage Suit Ordered Closed After Parties Settle Claims

AUSTIN, Texas — A federal magistrate judge in Texas ordered that a coverage dispute related to a highway construction project be closed after the remaining parties in the litigation jointly stipulated to dismissal after reaching an undisclosed settlement agreement.
November 10, 2022
Subcontractor Dismissed From CGL Insurer Coverage Suit Over Faulty Renovations

BATON ROUGE, La. — A federal judge in Louisiana issued an order dismissing claims against a subcontractor in a coverage suit filed by a commercial general liability (CGL) insurer seeking to recover settlement payments made on behalf of a general contractor for an allegedly defective complex renovation after the parties agreed to settle their claims.
November 10, 2022
Parties Seek Dismissal In Site Preparation Defects Coverage Suit

CHARLOTTE, N.C. — Parties in an insurance coverage dispute arising out of a lawsuit by homeowners alleging defects in site preparation for and foundations of their homes asked a federal judge in North Carolina to dismiss the lawsuit after they agreed to voluntarily dismiss their claims against each other.
November 10, 2022
Default Judgment Awarded Against Insurer In Water Intrusion Coverage Case

FLORENCE, S.C. — A federal judge in South Carolina issued an order granting default judgment against an insurer in a contractor’s coverage dispute against the insurer and others stemming from water intrusion and other construction defect issues at a mixed-use development project, ruling that such relief is required because the insurer has failed to respond to the litigation.
November 08, 2022
Default Judgment Awarded To Property Insurer In Roof Collapse Subrogation Suit

ABERDEEN, Miss. — A federal judge in Mississippi granted a commercial property insurer’s motion for default judgment against a contractor in a lawsuit brought by the insurer seeking to recover money it paid to its insured after a roof the contractor built collapsed, ruling that the insurer has sufficiently pleaded all of the necessary elements to show that such relief is warranted.