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

Mealey's Construction Defects Insurance

June 02, 2023
N.J. Panel Partly Reverses Ruling, Vacates $935,063 Awarded To Insured’s Assignee

TRENTON, N.J. — A New Jersey appeals panel affirmed a lower court’s ruling that a commercial automobile insurance policy’s care, custody and control exclusion does not apply to bar coverage because an insured “lacked possessory dominion over the damaged concrete batch and warehouse floor” but reversed the lower court’s finding that the policy’s handling of property and completed operations exclusions are not applicable, finding that the insured completed its delivery of the aggregate before the damages occurred.
June 02, 2023
Montana High Court: Complaint Fails To Allege Construction Defect, No Coverage Owed

HELENA, Mont. — The Montana Supreme Court affirmed a lower court’s summary judgment ruling in favor of an insurer in a lawsuit seeking defense and indemnification for an underlying action, finding that the insurance policy's definitions of “property damage” caused by an “occurrence” cannot be read to encompass a landscaper’s underlying allegations that he was never paid for landscaping work at a townhome.
June 01, 2023
3rd Circuit Says Faulty Workmanship Is Not Occurrence, No Coverage Owed To Insured

PHILADELPHIA — The Third Circuit U.S. Court of Appeal on May 31 reversed a district court’s ruling that an insurer must indemnify its insured for damages to natural gas wells caused by the insured’s fracking work because neither faulty workmanship nor failure to perform a contract in a workmanlike manner can be construed as an occurrence under the policy at issue.
June 01, 2023
Insurer Seeks Washington High Court Review Of Condensation Damage Coverage Dispute

OLYMPIA, Wash. — An all-risk insurer seeks Washington Supreme Court review of an appeals court ruling that reversed a lower court’s grant of summary judgment in its favor in a coverage dispute stemming from condensation damage to a condominium owner’s roof, arguing that the appeals court interpreted the resulting loss exception to the policy’s faulty workmanship exclusion “in a manner that renders the exclusion meaningless and is in conflict with” Washington high court and appeals court rulings.
May 31, 2023
Contractor’s Insurer Seeks New Trial Or Reconsideration In Water Intrusion Suit

NEW ORLEANS — An insurer proceeding as subrogee of its contractor insured seeks a new trial or, in the alternative, reconsideration of a Louisiana federal judge’s ruling dismissing its suit against a subcontractor’s insurer to recover damages it paid stemming from water damage caused by the subcontractor’s negligence in performing work on a home’s roof, arguing that because it filed an amended complaint after the subcontractor’s insurer filed its motion to dismiss, which the subcontractor’s insurer answered, the motion to dismiss was moot when it was granted.
May 31, 2023
CGL Insurer, Contractor Granted Dismissal In Faulty Window Coverage Suit

DALLAS — A federal judge in Texas has granted a motion to dismiss filed by a contractor and its commercial general liability insurer in the insurer’s suit regarding coverage for claims made in an arbitration proceeding over the installation of defective windows in an apartment building, dismissing the insurer’s claims against the contractor with prejudice and the insurer’s claims against other parties without prejudice.
May 30, 2023
Hawaii High Court Sets Oral Arguments For Questions On Equitable Reimbursement

HONOLULU — The Hawaii Supreme Court issued an order indicating that oral arguments are scheduled for July 6 to address questions regarding equitable reimbursement certified from a federal court in a coverage dispute over whether insurers owe a contractor and developer a duty to defend in a lawsuit over construction defects discovered at a condominium project.
May 25, 2023
Insureds Seek Partial Reconsideration In Suit Over Fire Suppression Leak Coverage

TAMPA, Fla. — While a federal judge in Florida correctly ruled that several leaks discovered in a fire suppression system over a period of time are considered one “occurrence” under a plain reading of builders risk policies issued by two insurers, the judge erred in finding that two deductibles applied — one for the original policy period and one for an extension of the policy period, a property owner and its general contractor argue in a May 24 motion for partial reconsideration.
May 25, 2023
Insurer Seeks JMOL Or New Trial In Slab Coverage Suit; Amicus Cannot Weigh In

DENVER — A federal judge in Colorado has denied an insurance association’s motion to appear as amicus curiae in support of an insurer that seeks judgment as a matter of law (JMOL) or a new trial after a jury found that it breached the terms of a builders risk policy issued to a real estate developer when it denied coverage for a cracked concrete slab at a condominium project.
May 24, 2023
Insurer Seeks JMOL Or New Trial After $170,000 Verdict In Water Damage Suit

MOBILE, Ala. — 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, an insurer has filed a renewed motion for judgment as a matter of law or a new trial, arguing that an insured church failed to establish that its claimed losses were covered under the policy, that the insured’s expert testimony was not reliable and that the “jury instructions were incomplete.”
May 23, 2023
Parties In Stucco Defects Coverage Suit Settle, Agree To Dismiss All Claims

SAN ANTONIO — Parties in a case over insurance coverage for homeowners’ property damage claims against a homebuilder related to alleged defects in the exterior stucco of their homes have agreed to dismiss the case with prejudice after notifying the court that they had reached a settlement.
May 22, 2023
Insurers Resolve Equitable Indemnity, Subrogation Action Over Sinking High-Rise

SAN FRANCISCO — An excess insurer and two insurers it had sued for equitable indemnity and/or equitable subrogation related to damages they paid to settle lawsuits stemming from the sinking of a residential high-rise stipulated to the dismissal with prejudice of all claims in the suit after notifying the court in March that they had reached a confidential settlement.
May 22, 2023
Homeowners Appeal Ruling That Contractor’s Insurer Owes No Coverage For Mold Injuries

PHILADELPHIA — Homeowners and a contractor are appealing to the Third Circuit U.S. Court of Appeals a federal judge in Pennsylvania’s determination that the contractor’s insurer owes them no coverage for personal injuries one of the homeowners sustained as a result of a mold infestation caused by the contractor’s negligent workmanship.
May 22, 2023
Painting Contractor, HOA Appeal Judgment For Insurer In Faulty Work Coverage Suit

LAS VEGAS — A painting contractor and the homeowners association (HOA) to which the contractor assigned its claims after an arbitrator found that the contractor’s work was defective and awarded damages to the HOA have appealed to the Ninth Circuit U.S. Court of Appeals a Nevada federal judge’s rulings granting judgment on the pleadings to the contractor’s insurer in its declaratory judgment action against them and dismissing their counterclaims against the insurer.
May 22, 2023
Parties In Insurers’ Suit Stemming From Explosion Stipulate To Dismissal

DETROIT — The parties in a suit subrogee insurers filed against an engineering firm and contractor in the wake of a gas explosion at a facility where the defendants were involved in a renovation project have agreed to the dismissal of all claims remaining in the suit.
May 22, 2023
Exterior Insulation And Finish Exclusion Bars Coverage, Insurer Reiterates

ATLANTA — A subcontractor’s insurer reiterated its argument to the 11th Circuit U.S. Court of Appeals that its policy’s exterior insulation and finish (EIFS) exclusion barred coverage for an underlying construction defects judgment, arguing that if an appellee insurer’s counterargument is not waived for being brought up for the first time on appeal, it should be rejected because the appellee fails to cite case law or the policy’s interpretation of “products-completed operation hazard.”
May 19, 2023
Judge: Triable Issues Exist As To When Subcontractor Knew Property Damage Occurred

LOS ANGELES — A California judge denied an insurer’s motion for summary judgment in a building owner and general contractor’s lawsuit seeking payments of an underlying $1.1 million default judgment entered against a subcontractor insured, finding that there are triable issues as to when the subcontractor “knew” that the property damage occurred and whether the subcontractor’s conduct qualifies as an “occurrence” under the business owners insurance policy.
May 17, 2023
Parties Seek Administrative Closure Of Coverage Case Pending Ruling In Defects Suit

GREENVILLE, Tenn. — An insurer, its subcontractor insured and a general contractor have asked a federal court in Tennessee to administratively close the insurer’s declaratory judgment action pending a ruling on a motion for summary disposition in the underlying construction defects suit.
May 15, 2023
3rd Circuit: CGL Insurer Has No Duty To Indemnify Roofer For Improper Installation

PHILADELPHIA — The Third Circuit U.S. Court of Appeals affirmed a Pennsylvania federal court’s ruling that a commercial general liability insurer has no duty to indemnify a roofing company insured for a $492,023.40 judgment entered against it in a homeowner’s action over the improper installation of a roof, finding that no “occurrence” exists to trigger CGL coverage.
May 15, 2023
Guaranty Association Must Defend Insured Drywaller In Underlying Row, Insurer Says

JACKSONVILLE, Fla. — A New Mexico commercial general liability insurer defending its insured drywall company in a construction defects action filed a contribution suit in a Florida federal court against the Florida Insurance Guaranty Association (FIGA), as successor in interest to a now-insolvent Florida commercial liability insurer of the drywaller, asserting that FIGA is liable for defense costs and indemnity in the underlying action.
May 09, 2023
Split Panel: Attorney Fees Properly Denied In Defective Stucco Coverage Suit

ATLANTA — A federal district court did not err in determining that it lacked subject matter jurisdiction to award attorney fees under a Florida statute to a homebuilder and a subcontractor in a coverage dispute stemming from the subcontractor’s alleged faulty exterior stucco work because, under 11th Circuit U.S. Court of Appeals precedent, attorney fees under the statute are “integral to the merits,” and, therefore, the lower court lacked the necessary jurisdiction to award such fees, a divided 11th Circuit panel ruled in affirming in an unpublished opinion.
May 05, 2023
Attorney Fees Ruling Delay Would Harm Contractor In Coverage Dispute, Judge Told

FORT MYERS, Fla. — A federal judge in Florida should not deter ruling on a contractor’s pending motions miscellaneous relief pending appeal in a coverage dispute over an insurer’s duty to defend the contractor in an underlying construction defects lawsuit because granting such relief would harm the contractor, the contractor argues in an opposition brief filed in Florida federal court.
May 05, 2023
Washington Appellate Panel Denies Rehearing In Faulty Work Coverage Suit

SEATTLE — A Washington appellant panel declined to rehear its ruling reversing a trial court’s dismissal of a restaurant insurer’s damages claims against a contractor over the contractor’s faulty workmanship in installing flooring in the restaurant based on the contractor’s filing of a motion to dismiss that did not comply with statutory requirements.
May 05, 2023
Parties Agree To Dismiss With Prejudice Fire Damage Subrogation Suit

BOSTON — Parties in a subrogation action brought in Massachusetts federal court by a homeowners insurer alleging that the manufacturer of rope lighting that allegedly caused a fire in a home have stipulated that the action be dismissed with prejudice and all rights of appeal be waived.
May 05, 2023
Amended Order In Faulty Welds Coverage Suit Issued At Request Of 7th Circuit

CHICAGO — Following an order issued by a Seventh Circuit U.S. Court of Appeals judge, a federal judge in Illinois issued an order and amended final judgment, ruling that insurers do not owe a general contractor a defense or indemnification as an additional insured in a coverage dispute stemming from a subcontractor’s defective welding work at O’Hare International Airport.