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

Mealey's Construction Defects Insurance

October 05, 2023
Parties In Design Defects Coverage Suit Over Parking Deck Resolve Dispute

WASHINGTON, D.C. — The parties in a coverage lawsuit stemming from repairs a building owner was required to make on structural supports in a parking garage based on its faulty design and construction on Oct. 4 stipulated to the dismissal of both the suit in District of Columbia federal court and the owner’s appeal, noting that they have “resolved all disputes” in the case.
October 05, 2023
Alabama Federal Judge: Court Has Jurisdiction In Insurer’s Declaratory Action

BIRMINGHAM, Ala. — A federal judge in Alabama has denied contractors’ motion to dismiss for lack of jurisdiction a declaratory judgment action filed against them by their preferred business insurer, finding that the court has subject matter jurisdiction because the parties are diverse and the cost of defending the underlying state court action against them exceeds the $75,000 amount in controversy and that the lack of a judgment in the underlying action does not mean that the federal court lacks standing under Article III of the U.S. Constitution.
October 04, 2023
Judge Finds Insurer Breached Contract In Denying Bridge Damage Coverage Claims

WASHINGTON, D.C. — A federal judge in the District of Columbia granted a bridgebuilder summary judgment on its breach of contract claim against its builders risk insurer, finding that the policy’s definition of “damage” includes its claim for reimbursement for repair costs necessitated by defects in the concrete of the bridge and that the insurer failed to demonstrate that any exclusions apply.
October 03, 2023
Judgment Stayed After Builders Risk Insurer Appeals Verdict, Post-Trial Rulings

DENVER — A federal judge in Colorado on Oct. 2 stayed the execution of final judgment in a condominium developer’s suit against its builders risk insurer pending resolution of all appellate proceedings after the insurer appealed the judgment, all rulings and orders related to the jury’s award of $2.54 million in damages to the developer and a number of post-trial rulings to the 10th Circuit U.S. Court of Appeals.
October 03, 2023
Judge Finds Insurers Have Duty To Defend Contractor For Faulty Roof Installation

HOUSTON — Because there is a question of fact regarding whether a general contractor knew before the policy periods that property damage had occurred as a result of leaks in a roof it constructed, there is a potential for coverage under its commercial general liability policies and its insurers have a duty to defend it in an underlying breach of contract case, a federal judge in Texas found in denying the insurers’ motion for summary judgment and granting the contractor’s competing motion.
October 03, 2023
Pollution Exclusion Bars Coverage For Damages Caused By Stormwater Runoff

ATLANTA — A Georgia federal judge granted a homebuilder liability insurer’s motion to dismiss an insured’s breach of contract suit after determining that no coverage is afforded for an underlying suit alleging property damages caused by stormwater runoff created by the insured’s construction of a townhome development because the policy’s pollution exclusion bars coverage for stormwater runoff.
September 27, 2023
Federal Jury Finds Sprinkler Subcontractor Failed To Perform Work In Good Manner

LAKE CHARLES, La. — Following a three-day trial, a federal jury in Louisiana found that a sprinkler subcontractor failed to perform its work on a sprinkler system in a newly constructed fitness club in a good, workmanlike manner but also decided that the subcontractor was not the cause-in-fact of damages sustained by the club’s owner.
September 27, 2023
1 Insurer Wins, 1 Loses In Competing Summary Judgment Motions Over Pavement Failure

CHICAGO — After first finding that Illinois law applies to a coverage dispute over the failure of pavement at a Michigan outlet mall, a federal judge in that state granted summary judgment to one subcontractor’s insurer and denied the competing summary judgment motion of another subcontractor’s insurer, finding that because the underlying complaint seeks only the costs of repairing the general contractor’s work, it does not allege an “occurrence” or “property damage” to trigger the first insurer’s duty to defend.
September 26, 2023
Federal Judge Dismisses Insurer’s Suit As ‘Shotgun Pleading’ With Leave To Amend

ORLANDO, Fla. — A federal judge in Florida partially granted two motions to dismiss from a homeowners’ association and a contracting company and sua sponte dismissed claims against a builder on the ground that an insurer’s complaint alleging liability for construction-related damages from a condominium development was a “shotgun pleading” that failed to separate each claim into a different count and to specify which claim applied to which defendant.
September 26, 2023
Contractor Denied Summary Judgment In Dispute With Subcontractor’s Insurer

FORT LAUDERDALE, Fla. — A federal judge in Florida denied a contractor’s motion for summary judgment on all claims against it in a declaratory suit filed by its subcontractor’s commercial general liability insurer and on its breach of contract counterclaim against the insurer, finding that the contractor has failed to prove that there are no genuine disputes of material fact.
September 20, 2023
Insurer, Insureds, Amici Debate ‘Occurrence’ Requirement Before Oregon High Court

SALEM, Ore. — A commercial general liability insurer urged the Oregon Supreme Court to affirm lower court rulings that it owed no duty to indemnify its insured contractor for damages awarded in an underlying construction defect arbitration, rejecting the homeowners’ argument that the high court should distinguish or clarify Oak Crest Construction v. Austin Mut. Ins. Co., on which the lower courts relied in finding that because that contractor’s liability arose from a breach of contract, there was no “occurrence” and, thus, no coverage for the property damage.
September 20, 2023
Illinois Panel Reverses Judgment For Engineer, Finds Insurer Entitled To Subrogation

CHICAGO — An Illinois appellate panel on Sept. 19 reversed a lower court’s grant of summary judgment to an engineering firm in a builders risk insurer’s suit seeking subrogation damages for the flooding of a building under construction, finding that the lower court erred in finding that the insurer did not meet the prerequisites for equitable subrogation because the insurer’s right to subrogate stemmed from the insurance contract.
September 19, 2023
Insurer Moves To Transfer Leaky Roof Suit After Winning Partial Summary Judgment

AUSTIN, Texas — A week after winning partial summary judgment in a breach of contract case related to its bankrupt and deceased subcontractor insured’s responsibility for damages stemming from work on a roof, a commercial general liability insurer filed an unopposed motion to transfer a breach of contract suit against it from one federal court in Texas to another.
September 14, 2023
Massachusetts Panel: Court Lacked Jurisdiction Over Insurer In Contractor’s Suit

BOSTON — The Massachusetts Appeals Court on Sept. 14 found that a lower court lacked personal jurisdiction over a commercial general liability insurer in a general contractor’s suit over its subcontractor’s faulty work, vacating the trial court’s award of summary judgment to the insurer and remanding for entry of a new judgment dismissing the complaint.
September 13, 2023
Judge Says Insurer Has No Duty To Defend In Wrongful Death Suit Against Architect

TAMPA, Fla. — A Florida federal judge granted an insurer’s request for declaratory judgment that it has no duty to defend or indemnify its insured architect in a wrongful death suit filed against the architect by the family of a man who died while working on a construction project, finding that the architect “made material misrepresentations on the policy application that voided the policy under the rescission doctrine.”
September 08, 2023
Builders Risk Insurer’s JMOL, New Trial Motions Denied; $7.62M Judgment Entered

DENVER — A federal judge in Colorado denied a builders risk insurer’s renewed motion for judgment as a matter of law (JMOL) and motion for a new trial following a jury’s award of $2.54 million in breach of contract damages to its condominium developer insured, rejecting the insurer’s arguments that the developer failed to prove that it suffered “resulting loss” damages and that the jury rendered an inconsistent verdict.
September 08, 2023
Insurer: All-Sums Applies In Case To Recoup Costs To Settle Roof Repair Suit

NEW ORLEANS — An insurer seeking to recover costs it paid to settle a roof repair and water damage suit tells the Fifth Circuit U.S. Court of Appeals that another insurer’s opposition to paying the costs fails to address an applicable all-sums approach requiring full payment up to policy limits for covered damages.
September 07, 2023
Insurer’s Motion To Dismiss Third-Party Claims Under Direct Action Statute Denied

BATON ROUGE, La. — Finding it “plausible that the $4 million aggregate limit may yet apply” to damages resulting from a sprinkler leak, a federal judge in Louisiana denied a commercial general liability insurer’s motion to dismiss third-party complaints filed against it under the state’s direct action statute seeking to recover for the alleged negligence of a general contractor and subcontractors.
September 07, 2023
Stay Of Judgment Denied After Insurer Appeals Judgment In Property Damage Dispute

MOBILE, Ala. — A federal judge in Alabama has denied an insurer’s motion for stay of execution without bond of a judgment issued in the wake of a nearly $170,000 verdict against it in an insurance dispute over the handling of a property damage claim after Hurricane Sally pending its appeal to the 11th Circuit U.S. Court of Appeals.
September 07, 2023
Insurer Seeks Reconsideration Of Ruling Finding It Has Duty To Defend Builder

FORT WORTH, Texas — A federal judge in Texas erred in determining that a commercial general liability insurer had a duty to defend in a coverage dispute over a homebuilder’s alleged failure to disclose to homebuyers that a home it built was subject to flooding because it didn’t give the insurer the opportunity to respond before ruling in favor of the builder, which had not sought such a ruling, the insurer argues in seeking reconsideration.
September 07, 2023
Insurer’s Subrogation Suit Against Contractor And Fireplace Installer Dismissed

NEW HAVEN, Conn. — A federal judge in Connecticut has dismissed with prejudice an insurer’s suit seeking reimbursement from a contractor and the installer of a fireplace for a fire that damaged an insured home after the parties filed a joint stipulation of dismissal.
September 01, 2023
Homeowners Insurer Failed To Show Negligent Installation Cause Of Water Damage

PHILADELPHIA — A Pennsylvania federal judge denied a homeowners insurer’s motion for summary judgment in a dispute over water damage in an insured’s home because the insurer failed to show that the parties who installed and serviced a water supply line were negligent in their work and caused the failure of the water supply line.
September 01, 2023
Contractor’s Insurer Appeals Denial Of New Trial In Coverage Suit To 5th Circuit

NEW ORLEANS — A contractor’s commercial general liability insurer has appealed to the Fifth Circuit U.S. Court of Appeals a ruling by federal judge in Louisiana denying its motion for a new trial or reconsideration of his April ruling dismissing its suit against a subcontractor’s insurer to recover damages the contractor’s insurer paid stemming from water damage caused by the subcontractor’s negligence in performing work on a home’s roof.
August 31, 2023
Insurer Appeals Judgment After Verdict On Property Damage Dispute To 11th Circuit

MOBILE, Ala. — An insured has appealed to the 11th Circuit U.S. Court of Appeals the judgment issued in the wake of a nearly $170,000 verdict against it in an insurance dispute over the handling of a property damage claim after Hurricane Sally and moved a federal court in Alabama to stay execution of the judgment pending appeal.
August 30, 2023
Insurer’s Motion For Default Judgment Against Stucco Installer Insured Granted

TAMPA, Fla. — Noting the lack of any objection, a federal judge in Florida on Aug. 29 adopted the report and recommendation of a magistrate judge and granted a surplus lines commercial liability insurer’s motion for entry of a default judgment against its stucco installer insured because the policy’s “Condominium, Townhome, Tract or Track Exclusion bars coverage for property damage arising out of ‘construction of, or work performed on’ the ‘original construction of a . . . tract or track home.’”