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

Mealey's Construction Defects Insurance

June 24, 2024
District Court’s Collapse Ruling Must Be Reversed, Contractor Tells 6th Circuit

CINCINNATI — A federal judge erred in finding that no coverage is owed for a structurally unsound wall that remained standing after a portion of the wall collapsed during a building renovation because the lower court failed to apply Tennessee law in construing the meaning of the term collapse in the insurer’s policy, a building contractor says in its June 21 appellant brief filed in the Sixth Circuit U.S. Court of Appeals.
June 20, 2024
Federal Judge Dismisses General Contractor From Subrogated Insurer’s Suit

CHEYENNE, Wyo. — Following the parties stipulation of dismissal announcing they reached a settlement, a federal judge in Wyoming dismissed a general contractor with prejudice from a subrogated homeowners insurer’s lawsuit, while the insurer’s appeal of an earlier ruling that its claim against an engineer that designed a home’s plumbing is time-barred remains pending.
June 18, 2024
‘Lord Of The Dance’ Must Arbitrate Defects Dispute With Insurer, Irish Judge Rules

DUBLIN, Ireland — The High Court of Ireland rejected dancer and businessman Michael Flatley’s bid to avoid arbitration of a 30 million euro dispute over defects in his County Cork mansion that he claims caused him and his family members severe health issues, rejecting his argument that the policy’s arbitration agreement is unfair and unenforceable.
June 18, 2024
Judge Administratively Closes Insurer’s Suit Disputing Coverage For HOA’s Action

JACKSONVILLE, Fla. — A federal judge in Florida on June 17 administratively closed a commercial general liability insurer’s lawsuit seeking a declaration that it owed no indemnification to a subcontractor that worked on homes operated by a homeowners association after the insurer and the HOA filed a second notice of settlement.
June 18, 2024
Insured Building Owner Says Lower Court Misinterpreted Policy’s Collapse Language

CINCINNATI — The Sixth Circuit U.S. Court of Appeal must reverse a district court’s ruling entered in favor of an insurer because the lower court failed to properly interpret and apply the language of the policy regarding the coverage afforded for the collapse of a wall, an insured building owner says in its June 17 appellant brief.
June 14, 2024
11th Circuit Allows Insurer, Contractor To Amend Pleadings In Coverage Dispute

ATLANTA — The 11th Circuit U.S. Court of Appeals granted a construction firm and its insurer permission to amend pleadings to adequately establish the citizenship of the parties for the purposes of diversity jurisdiction, allowing to proceed the construction firm’s appeal of an Alabama federal judge’s finding that the insurer had no duty to defend the firm from allegations that it caused structural damage to a couple’s home.
June 12, 2024
Judge: No Coverage For Contractor For Repair Costs From Fixing Faulty Work

CHARLESTON, S.C. — A federal judge in South Carolina granted an insurer’s motion for summary judgment, finding that the insurer owed no coverage to a general contractor for damages caused after stormwater seeped through faulty stucco because the damage is not the result of an “occurrence” under the terms of the policy.
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.