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

Mealey's Construction Defects Insurance

June 11, 2024
Judge: No ‘Occurrence’ In Contractor’s Coverage Claim; Complaint Dismissed

ALEXANDRIA, Va. — A federal judge in Virginia found that a contractor is not owed reimbursement from excess insurers for expenses it sustained while repairing damage to walls at a school it was building for the U.S. Marine Corps caused by a subcontractor, finding that the contractor does not show how the damage could be considered an “occurrence” under the terms of the excess insurance policies.
June 10, 2024
Insurer Seeks Dismissal Of Contractor From Coverage Dispute While Appeal Continues

CHEYENNE, Wyo. — A subrogated homeowners insurer filed a stipulation of dismissal in a Wyoming federal court, seeking dismissal with prejudice of all its claims against a general contractor, while the insurer’s appeal of a Wyoming federal judge’s ruling that its claim against an engineer that designed a home’s plumbing is time-barred remains pending.
June 06, 2024
Federal Judge Rules Paint Damage Was Uncoverable Faulty Work, Not Vandalism

SEATTLE — A federal judge in Washington granted an insurer’s motion for summary judgment, finding that paint damage in a vacation home was caused by uncovered faulty workmanship and not covered vandalism as the home’s owner argued.
June 05, 2024
Federal Judge: State’s Prescriptive Period Bars Insurance Coverage Claims

BATON ROUGE, La. — A federal judge in Louisiana on June 4 granted a manufacturer’s motion for summary judgment in a construction insurance dispute stemming from damages caused by a sprinkler leak, dismissing claims against the manufacturer with prejudice because the claims brought against the manufacturer by an insurer are prescribed by Louisiana’s one-year liberative prescriptive period in product liability cases.
June 05, 2024
Federal Judge: Insurance Dispute Still Stayed As Underlying State Claims Continue

OAKLAND, Calif. — A California federal judge denied a request from two insurers to lift a stay of proceedings in a coverage dispute over the insurers’ duty to defend and indemnify a contractor and subcontractor for claims that they caused cracks to a California hospital’s floor, finding that the hospital’s settlement with the construction companies in an underlying state action did not bring about the full resolution of that case.
June 05, 2024
Illinois Supreme Court Considers Whether Insurer Is Entitled To Subrogation

SPRINGFIELD, Ill. — The Illinois Supreme Court heard arguments over whether an insurer can pursue subrogation on behalf of an entity it did not have a contract with based only on an “insurable interest” as the court considered whether an insurer met the prerequisites for equitable subrogation in a coverage case stemming from flooding of a Chicago college building.
June 04, 2024
Judge: Contractor’s Bid To Add Counterclaim To Coverage Row Untimely

NEW YORK — A federal judge in New York denied a motion from a contracting company and two of its officers to amend their answer to their excess insurer’s suit, seeking to add a counterclaim that the insurer breached its insurance contract by denying coverage for damage caused to a neighboring building during excavation, finding that the addition would be futile and that the motion was untimely.
June 04, 2024
Mississippi High Court: No Coverage Owed To Shipbuilder For Defective Flange Plates

JACKSON, Miss. — The Mississippi Supreme Cout unanimously affirmed a lower court’s grant of summary judgment in favor of an “all-risk” insurer in a shipbuilder insured’s breach contract lawsuit seeking to recover the $3.3 million it paid to replace and repair cracked steel flange plates that were installed on two of its ships, finding that the defective materials were installed due to faulty workmanship; the insured sought coverage exclusively for the costs of repairing and replacing the defective materials and the policy unambiguously excludes the cost or replacing or repairing defective materials.
June 04, 2024
Judge Dismisses Drywall Coverage Dispute After Contractor, Insurers Settle

NEW YORK — A federal judge in New York dismissed a suit brought by a contractor seeking a defense in an underlying suit alleging the contractor was responsible for damages to drywall in a New York City hotel after the contractor, its insurer and a subcontractor’s insurer agreed to a settlement.
June 03, 2024
Judge Rules Funeral Home’s Coverage Claim Barred By Rainwater Exclusion

DETROIT — A federal judge in Michigan on May 31 dismissed with prejudice a funeral home’s complaint in which it argued that it was owed coverage for damage caused by a rainstorm after a roofing company failed to secure the roof for the weather, finding that coverage is barred by a policy exclusion related to damage caused by water without damage caused to the roof.
June 03, 2024
Judge Denies Insurer’s Summary Judgment Bid Over Contractor’s Forgery Claims

CLEVELAND — A federal judge in Ohio granted an insurer’s motion to strike a sur-reply filed by the owner of a contractor company without prior approval in a dispute over the contractor’s duty to reimburse the insurer for certain fees but denied the insurer’s motion for summary judgment, finding that the owner’s assertion that his signature had been forged on an indemnity agreement raises a genuine dispute of material facts.
May 31, 2024
Judge Dismisses Coverage Dispute Between Contractor, Insurer After Settlement

LOS ANGELES — A federal judge in California granted a contractor and a commercial general liability insurer’s joint stipulation of dismissal filed after the parties agreed to a settlement, dismissing with prejudice allegations stemming from claims that the contractor failed to secure a building before a hurricane.
May 30, 2024
Federal Judge Dismisses Construction Damage Coverage Dispute After Parties Settle

SAN DIEGO — A federal judge in California on May 29 granted a California couple and a renovator’s insurer’s joint motion to dismiss the couple’s suit stemming from claims that the insurer owed them a defense and indemnification as a result of roofing damages caused by the renovator after the parties agreed to a settlement.
May 29, 2024
7th Circuit Won’t Reconsider Finding Of No Coverage To Contractor

CHICAGO — The Seventh Circuit U.S. Court of Appeals on May 28 denied a general contractor’s petition for en banc rehearing, allowing to stand a recent opinion in which a panel found that the contractor was not owed a defense or indemnification because defective welding it performed at O’Hare International was not “property damage” under the terms of insurance policies.
May 28, 2024
Judge: Dismissing Contractor From Coverage Dispute Would Prejudice County Board

WICHITA, Kan. — A federal judge in Kansas denied an insurer’s request to dismiss its insured contractor from a coverage dispute, finding that declaring that the insurer owed no duty to defend or indemnify the contractor for claims stemming from damages it caused to a county courthouse would prejudice the county board of commissioners’ ability to pursue claims under the insurance policy.
May 28, 2024
Insurers and Contractor Settle Coverage Dispute Over Condo Repairs

GALVESTON, Texas — A contractor and two insurers on May 24 filed a joint notice of settlement in a Texas federal court, bringing a potential close to the contractor’s allegation that it was owed coverage for state court claims against it related to alleged defective condominium repairs, more than two years after a magistrate judge recommended the grant of the contractors’ motion for summary judgment.
May 28, 2024
Insurer, HOA Agree To Dismiss Water Intrusion Coverage Complaint

WILMINGTON, Del. — A Delaware federal judge granted an insurer and a homeowners’ association’s stipulation of dismissal with prejudice, dismissing all claims in the dispute over whether the insurer owed coverage for more than $8 million in damages awarded to the association in its underlying case against an insured contractor for excessive water infiltration and other issues.
May 28, 2024
Contractor, Insurer Seek Dismissal Of Coverage Claims After Settlement

LOS ANGELES — A contractor and an insurer filed a joint stipulation of dismissal on May 24, seeking to bring an end to their dispute in a California federal court stemming from the contractor’s alleged failure to properly secure a building under construction in advance of a hurricane after they agreed to a settlement.
May 23, 2024
Federal Magistrate Dismisses Construction Insurance Dispute After Homeowners Settle

ROCHESTER, N.Y. — A federal magistrate judge in New York dismissed with prejudice an insurance coverage dispute stemming from allegations that former homeowners failed to disclose structural and environmental issues in connection with a home they sold after the former homeowners, new owners and insurers agreed to a settlement, nearly a year after the parties stipulated to dismissing an appeal to the Second Circuit U.S. Court of Appeals of the magistrate judge’s grant of summary judgment to the insurers.
May 23, 2024
Contribution Suit Against Guaranty Association Dismissed After Stipulation Filed

JACKSONVILLE, Fla. — After parties filed a joint stipulation of dismissal in a Florida federal court, a judge dismissed with prejudice a New Mexico commercial general liability insurer’s suit seeking defense costs and indemnity for an underlying construction defects action from the Florida Insurance Guaranty Association (FIGA), as successor in interest to a now-insolvent Florida commercial liability insurer.
May 21, 2024
Faulty Concrete Coverage Claims Voluntarily Dismissed By Insurer, Contractor

MIAMI — A Florida federal magistrate judge dismissed with prejudice an insurance dispute where the magistrate judge previously ruled that an insurer’s policy does not bar coverage for a contractor accused of defective work on a Florida highway after the parties issued a joint stipulation of dismissal.
May 16, 2024
Contractor Says 7th Circuit Opinion Conflicts With Illinois Insurance Law

CHICAGO — A general contractor petitioned the Seventh Circuit U.S. Court of Appeals for en banc rehearing, arguing that a recent opinion in which a panel found that the contractor was not owed a defense or indemnification because defective welding it performed at O’Hare International was not “property damage” under the terms of insurance policies cannot be squared away with “well settled Illinois law requiring insurers to defend policyholders unless the underlying facts pled preclude any possibility of coverage.”
May 15, 2024
Construction Insurance Coverage Suit Tossed After Underlying Suit Settles

AUGUSTA, Ga. — A federal judge in Georgia dismissed without prejudice a declaratory judgment action brought by an insurer that claimed it owed no coverage for claims related to the insureds’ assembly of a manufactured home that sustained water and mold damage after the parties indicated that the underlying suit had been settled.
May 13, 2024
9th Circuit Affirms No ‘Accident’ In Appeal Of Construction Insurance Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 13 affirmed in an unpublished memorandum a Nevada federal judge’s grant of an insurer’s motion for judgment on the pleadings in a coverage dispute with a contractor and a homeowners association (HOA), finding that the insurer was entitled to a declaratory judgment of no coverage because an “accident” had not occurred while the contractor worked on one of the HOA’s buildings.
May 13, 2024
Insured Cannot Reassert Bad Faith Claim In Collapse Coverage Suit, Judge Says

PHILADELPHIA — A Pennsylvania federal judge denied an insured’s motion for leave to reassert a bad faith claim against its commercial property insurer in a dispute over coverage for the partial collapse of a building because the insured failed to show that the insurer’s reliance on the policy’s faulty workmanship exclusion to deny coverage was unreasonable.