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

Mealey's Construction Defects Insurance

April 06, 2023
Excess Insurer Granted Summary Judgment In Highway Construction Coverage Suit

AUSTIN, Texas — A federal judge in Texas issued an order adopting a magistrate judge’s report and recommendation 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 and others over a faulty highway construction project be granted, ruling that he found “no clear error” in the recommendation.
April 06, 2023
Insurer Makes No Showing Why Default Should Be Overturned, Contractor Says

FLORENCE, S.C. — A South Carolina federal judge should deny a motion for relief from default judgment and to set aside entry of default filed by an insurer in a contractor’s coverage dispute stemming from water intrusion and other construction defect issues at a mixed-use development project because the insurer failed to provide a “satisfactory explanation for the default much less establish the ‘mistake, inadvertence, excusable neglect, or surprise’” as required, the contractor argues in an opposition brief.
April 05, 2023
Jury Awards Developer More Than $2.5M In Damages In Concrete Slab Coverage Suit

DENVER — A federal jury in Colorado on April 4 found that a real estate developer proved by a preponderance of the evidence that its insurer breached the terms of a builders risk policy in denying coverage for a cracked concrete slab at a condominium project and awarded the developer $2,541,218 based on three categories of asserted damages.
April 03, 2023
CGL Insurer Properly Pleaded Jurisdiction Over Claims In Defects Coverage Suit

LOUISVILLE, Ky. — Dismissal of a commercial general liability (CGL) insurer’s claims in a declaratory relief lawsuit against its insureds stemming from the insurer’s providing of a defense to the insureds in four separate construction defects lawsuits is not warranted because the insurer has sufficiently pleaded facts showing that a federal district court has personal jurisdiction over the claims asserted, a federal judge in Kentucky ruled.
April 03, 2023
Policy Exclusions Do Not Preclude CGL Coverage For Contractor In Defects Suit

FORT MYERS, Fla. — A federal judge in Florida granted summary judgment in favor of a contractor in a coverage dispute with its commercial general liability (CGL) insurer over the insurer’s duty to defend the contractor in an underlying construction defects lawsuit, ruling that policy exclusions cited by the insurer in denying the contractor a defense in the underlying action do not apply.
April 03, 2023
Stucco Exclusion Does Not Bar Coverage In Construction Defects Suit, Judge Rules

JACKSONVILLE, Fla. — An insurer is not entitled to summary judgment on its claim seeking a declaration that it owes no duty to defend a subcontractor in an underlying lawsuit alleging that the subcontractor installed defective stucco in the construction of a resort because a stucco exclusion contained in the insurer’s policies does not apply to all of the claims made against the subcontractor, a federal judge in Florida ruled.
March 31, 2023
Policy’s Ensuing Loss Exception Applies To Water Damage Claim

ROCHESTER, N.Y. — A New York trial court erred in denying partial summary judgment on the issue of liability in favor of homeowners in a coverage dispute against their insurer over water damage claims resulting from faulty plumbing work done on their home during a bathroom renovation because the water damage claim was covered under an ensuing loss exception to the policy’s faulty workmanship exclusion, a New York appellate panel ruled in reversing.
March 28, 2023
Court Lacks Jurisdiction Over Insurer’s Coverage Claims Against Roofer

PHILADELPHIA — A federal judge in Pennsylvania dismissed an insurer’s declaratory relief action stemming from an underlying faulty workmanship lawsuit against a roofing contractor, ruling that he lacks subject matter jurisdiction to hear the action under the Declaratory Judgment Act (DJA).
March 28, 2023
General Liability Insurer Dismissed From Mold Coverage Dispute

LAS VEGAS — Without providing further detail, a federal judge in Nevada dismissed a professional liability insurer’s claims against a contractor’s general liability insurer in a mold and moisture damage coverage dispute.
March 23, 2023
Judge: Defective IGUs Caused No Injuries, Property Damage To Condo Project

SAN DIEGO — An insurer is entitled to summary judgment on claims brought by a subcontractor stemming from defective window-wall systems furnished by the subcontractor and installed in a condominium tower project because the issues with defective insulated-glass units (IGUs) in the window-wall system did not involve any injury or property damage to anything other than the IGUs, a federal judge in California ruled.
March 23, 2023
Claims In Negligent Floor Painting Work Coverage Suit Pass Early Dismissal Test

LITTLE ROCK, Ark. — A federal judge in Arkansas denied an insurer’s motion to dismiss in a coverage dispute stemming from a painter’s negligent graphic and line painting work on a newly installed vinyl gym floor, ruling that a subcontractor plausibly stated its declaratory judgment and breach of contract claims.
March 22, 2023
Judge Orders Claims Against Insurer In Defects Coverage Suit Dismissed

TACOMA, Wash. — Three of five factors set forth under Federal Rule of Civil Procedure 41(b) strongly support dismissal of claims against an insurer in a coverage dispute brought by homeowners stemming from a construction defects lawsuit over the construction of homes in a housing development, while four of the factors support dismissal based on the homeowners’ persistent failure to meet court-ordered deadlines and their failure to properly prepare for trial, a federal judge in Washington ruled in dismissing all claims against the insurer with prejudice.
March 21, 2023
Hotel Operator’s Claims Against Builder In Faulty Work Coverage Suit Dismissed

LAFAYETTE, La. — A federal judge in Louisiana dismissed all claims brought by a hotel operator with prejudice in a coverage dispute alleging faulty workmanship in the building of a hotel against a contractor after the parties agreed to a settlement.
March 20, 2023
Insurers Owe Continued Coverage For Underlying Negligence Suit, Judge Says

SEATTLE — A Washington federal judge denied a motion for summary judgment filed by insurers in a suit seeking coverage for an underlying suit filed against the insured over the insured’s alleged negligent installation of a sewage pipeline because under Washington law, the insurers have a continued duty to defend the insured as the underlying allegations are potentially covered under the policies at issue.
March 16, 2023
Magistrate Had Jurisdiction To Issue Order In Water Damage Coverage Suit

ROCHESTER, N.Y. — A federal magistrate judge in New York on March 15 rejected objections to his ruling that insurers in a lawsuit stemming from former homeowners’ alleged failure to disclose structural and environmental issues in connection with a home they sold owe no duty to defend the former homeowners, finding that his ruling was not a report and recommendation because the insurers consented to his jurisdiction in the action.
March 15, 2023
Fire Suppression System Leaks Were 1 Occurrence Under Builders Risk Policies

TAMPA, Fla. — A federal judge in Florida ruled that insureds are entitled to summary judgment on their claims that several leaks discovered in a fire suppression system over a period of time are considered one “occurrence” under a plain reading of two builders risk policies and that, as a result, a majority of the claims made in response to the leaks are subject to just one deductible.
March 15, 2023
Subcontractor’s Damages Coverage Suit Dismissed After Remaining Parties Settle

SEATTLE — A federal judge in Washington issued an order dismissing a coverage dispute stemming from a subcontractor’s alleged damages incurred from its work on a construction project and an insurance broker’s alleged failure to submit the subcontractor’s claims to the necessary general liability insurers after the remaining parties reached a settlement.
March 14, 2023
Lack Of Water Damage Timeline Absolves Insurer Of Coverage, Duty To Defend

ATLANTA — An insurer owes no duty to cover, defend or indemnify a general contractor or subcontractor for underlying construction defects lawsuits filed against the contractors stemming from water intrusion damages at a hotel construction project because no evidence was provided showing that the property damage took place during the policy periods, a federal judge in Georgia ruled.
March 10, 2023
Policy Endorsement Bars Coverage To Subcontractor In Faulty Installation Suit

WEST PALM BEACH, Fla. — A commercial general liability insurer is entitled to summary judgment on its declaratory judgment claims in a lawsuit stemming from a subcontractor’s alleged faulty installation of cladding and glazing systems in a construction project because the policy’s “course-of-construction” exclusion bars coverage, a federal judge in Florida ruled.
March 10, 2023
Damages Claim Remains In Coverage Suit Over Faulty Breaker Installation

SAN DIEGO — A federal judge in California ruled that an insured has sufficiently pleaded its claim for punitive damages in a coverage dispute over its insurer’s refusal to indemnify the insurer in an underlying property damage lawsuit stemming from the sale and installation of defective circuit breakers under California law because, at this stage of the litigation, the insured is not required to show “with ‘clear and convincing evidence’” that the insurer acted with “‘oppression, fraud, or malice.’”
February 27, 2023
COMMENTARY: Construction Defect Claims: A 2022 Update Part II

By Thomas F. Segalla, Michael T. Glascott, Ashlyn M. Capote, Adam R. Durst, Sean P. Hvisdas and Samantha M. McDermott
March 09, 2023
Contractor Relieved Of Liability For Independent Contractor’s Negligence

NEW YORK — A New York trial court did not err in dismissing a complaint brought by an insurer as subrogee of a homeowner whose home was damaged after wiring that was cut during renovation work in a garage started a fire because the damage was caused by an independent contractor and, thus, the contractor performing the renovations cannot be held liable, a Second Department New York Supreme Court Appellate Division panel ruled in affirming the dismissal March 8.
March 09, 2023
Insurer Has No Duty To Defend Subcontractor Based On New Construction Exclusions

SEATTLE — An insurer did not breach its duty to defend a subcontractor in an underlying construction defects lawsuit brought by homeowners because the subcontractor’s policy excluded coverage for the damages the homeowners sought under a series of new construction exclusions, a federal judge in Washington ruled.
March 09, 2023
Lack Of Property Damage Precludes Contractor From Coverage Over Faulty Welds

CHICAGO — A federal judge in Illinois ruled that insurers do not owe a general contractor coverage as an additional insured in a coverage dispute stemming from a subcontractor’s defective welding work at O’Hare International Airport because claims made by the general contractor in an underlying lawsuit were not for “property damage.”
March 08, 2023
Subrogation Waiver Absolved Contractor Of Liability, Indiana High Court Rules

INDIANAPOLIS — An Indiana trial court erred in granting summary judgment in favor of an insurer and tenants of a office complex in a coverage and subrogation dispute against a sprinkler installation contactor because a subrogation waiver barred coverage for the insurer, while the contactor owed no contractual duty to the other tenants, a divided Indiana Supreme Court ruled in reversing and remanding.