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

Mealey's Construction Defects Insurance

October 01, 2024
Fact Issues Exist On Whether Coverage Is Owed For Water, Mold Damages, Judge Says

LOS ANGELES — A California federal judge denied a motion for summary judgment filed by insurers that denied coverage for mold and water damages sustained in numerous buildings of an insured’s construction project because questions of fact exist as to whether the policies’ fungus extension and delay in opening extension afford coverage and whether the policies’ exclusion for cost of making good (COMG) excluded coverage for any damage caused by faulty workmanship.
October 01, 2024
Insurer Can Pursue Subrogation Against Engineering Firm, Illinois High Court Rules

SPRINGFIELD, Ill. — The Illinois Supreme Court affirmed an appeal court’s reversal of 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 Chicago college building under construction, agreeing with the appeals court that the trial court erred in finding that the insurer does not meet the prerequisites for equitable subrogation and concluding that none of the facts or provisions barred the insurer’s subrogation action against the engineer.
September 30, 2024
Contractor Says Coverage Is Owed For Damages To Entirety Of Building

CINCINNATI — A federal district court erred in refusing to find that coverage is owed for damages to the entirety of a building as a result of the collapse of some of the bricks from one of the building’s walls, the contractor says in an appellant reply brief filed in the Sixth Circuit U.S. Court of Appeals.
September 30, 2024
Reinsurer’s Declaratory Judgment Suit Is Tossed For Lack Of Contractual Privity

BROOKLYN, N.Y. — Ruling in part that a reinsurer “failed to plead privity or third-party beneficiary status” and therefore failed to state any claims, a New York federal judge on Sept. 27 dismissed the lawsuit in which the reinsurer sought a declaratory judgment regarding state court litigation arising from a building’s partial collapse.
September 30, 2024
Judge Dismisses Insurer’s Subrogation Suit Stemming From Parking Garage Collapse

LEXINGTON, Ky. — A federal judge in Kentucky dismissed with prejudice all remaining claims in an insurer’s subrogation lawsuit arising from a parking garage collapse after the parties reached a settlement.
September 23, 2024
Rain Exclusion Bars Coverage For Contractor, 9th Circuit Affirms

SAN FRANCISCO —The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of summary judgment in favor of insurers in a contractor’s coverage dispute stemming from water intrusion damages caused by snow and rainfall during the construction process, agreeing that the insurers’ denial of the claim was proper based on the policies’ rain exclusion.
September 23, 2024
Panel: Fact Issues Invalidate Summary Judgment In Faulty Grain Silo Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Sept. 20 reversed a lower federal court’s finding that an insurer had no duty to indemnify a contractor in a farmers cooperative’s underlying lawsuit alleging defective construction of grain silos, finding that fact questions invalidate summary judgment and remanding.
September 19, 2024
Interpretation Of ‘Direct Physical Loss’ Phrase Was Erroneous, Building Owner Says

CINCINNATI — A district court erred in relying on a definition of the term “direct physical loss” as used in a prior opinion issued by the Sixth Circuit U.S. Court of Appeals when it determined that the collapse of some bricks from a wall within a building did not cause any damage to the wall or building as a whole, the building owner maintains in a Sept. 18 appellant reply brief filed in the Sixth Circuit.
September 19, 2024
Judge: No Coverage Owed For Suit Alleging Faulty Work On Apartment Complex Roofs

NEW YORK — Adopting a magistrate’s report and recommendation, a federal New York judge concluded that insurers owe no coverage for an underlying lawsuit that accuses a contractor and a subcontractor of faulty work on roofs in a New York City apartment complex that failed during Hurricane Sandy.
September 17, 2024
Magistrate Rules On Discovery In Suit Alleging Surety Breached Performance Bond

FORT LAUDERDALE, Fla. — A federal magistrate judge in Florida granted in part and denied in part a plaintiff’s motions to compel discovery in its lawsuit alleging that a surety breached a performance bond by denying liability for damage to its construction project allegedly caused by a subcontractor’s “defective and deficient work.”
September 17, 2024
11th Circuit Rejects Insurer’s Challenge To Ruling In Favor Of Contractor’s Assignee

ATLANTA — The 11th Circuit U.S. Court of Appeals denied an insurer’s petition seeking reconsideration of its ruling that affirmed a lower federal court’s $557,500 summary judgment in favor of a contractor insured’s assignee in a lawsuit seeking coverage for damage incurred as a result of the insured’s misconduct.
September 16, 2024
Federal Judge Dismisses Complaint In Additional Insured Coverage Dispute

ORLANDO, Fla. — A federal judge in Florida partly granted an insurer’s motion to dismiss without prejudice a contractor and community owner’s amended complaint seeking declaratory relief as to additional insured coverage for a homeowner’s association’s underlying lawsuit allegedly arising from a subcontractor’s negligent and defect construction work.
September 09, 2024
After Reconsideration, Judge Says Court Erred When It Ruled In Insurer’s Favor

LOS ANGELES — Granting insureds’ motion for reconsideration, a federal judge in California said the court erred when it granted an insurer’s motion for summary judgment as to insureds’ breach of contract claim, finding that the court cannot conclude as a matter of law that the insureds’ water damage loss is not covered by their policy.
September 09, 2024
Court: No CGL Coverage Owed For Suit Alleging Insured Installed Defective Equipment

CHALESTON, W. Va. —The West Virginia Intermediate Court of Appeals held that a commercial general liability insurer had no duty to defend or indemnify for an underlying lawsuit challenging the insured’s design, building and installation of custom equipment for a whiskey barrel manufacturer, affirming a lower court’s grant of the insurer’s motion for summary judgment in the insured’s declaratory judgment lawsuit.
September 06, 2024
Judge: Negligent Work, Rust And Corrosion Exclusions Bar Coverage For Condo Damage

WHITE PLAINS, N.Y. —A New York federal judge entered judgment in favor of an insurer one day after finding that an insured’s damages to its condominium building were caused by “rust and corrosion” and “negligent work,” triggering a commercial property insurance policy’s exclusions, and that the insured failed to establish a triable issue of fact.
September 05, 2024
Judge Dismisses Coverage Dispute After Underlying Defective Concrete Suit Settles

PHOENIX — A federal judge in Arizona ordered an insurer’s declaratory judgment action dismissed after the insurer indicated that the underlying defective concrete lawsuit that prompted the coverage dispute has settled.
September 05, 2024
Parties Settle Insurer’s Subrogation Suit Arising From Parking Garage Collapse

LEXINGTON, Ky. — Noting that the parties indicated that they have reached a settlement as to all remaining claims, a federal judge in Kentucky denied as moot the pending motions for summary judgment and canceled a scheduled bench trial in an insurer’s subrogation lawsuit arising from a parking garage collapse.
September 04, 2024
Settlement Reached With 2nd Insurer In Faulty Construction Coverage Dispute

DENVER — One month after a plaintiff insurer and one of the defendant insurers filed a joint notice of settlement in a Colorado federal court in a dispute over coverage for a construction company accused of causing damages to homes through faulty construction, the plaintiff insurer filed another notice indicating that it has reached a settlement with the last remaining insurer defendant.
September 04, 2024
Insurer Challenges Panel’s Affirmation Of Judgment In Favor Of Contractor’s Assignee

ATLANTA — An insurer asked the 11th Circuit U.S. Court of Appeals to reconsider its ruling that affirmed a lower federal court’s $557,500 summary judgment in favor of a contractor insured’s assignee in a lawsuit seeking coverage for damage incurred as a result of the insured’s misconduct.
September 03, 2024
Indiana Panel Partly Reverses Ruling In Insured’s Suit Against Insurer, Contractor

INDIANAPOLIS — The Indiana Court of Appeals affirmed a lower court’s grant of summary judgment in favor of a homeowners insurer in an insured’s breach of contract lawsuit but reversed the lower court’s finding that there is a genuine issue of material fact that a contractor’s work was negligently completed, finding that no privity of contract existed between the insured and the contractor and personal injury was not reasonably foreseeable to result from the contractor’s purported acts of negligence.
August 30, 2024
Impaired Property Exclusion Bars Coverage For Improperly Constructed Retaining Walls

TACOMA, Wash. — A federal judge in Washington held that an insurance policy’s impaired property exclusion bars coverage for underlying damage caused by retaining walls that were improperly constructed by the insured, further finding that the “sudden and accidental injury” exception to the exclusion does not apply.
August 29, 2024
Subcontractor Must Supplement Responses; Insurer’s Motion To Bifurcate Granted

LOUISVILLE, Ky. — A Kentucky federal judge ordered a subcontractor to supplement a number of its responses to an insurer’s requests for admissions and bifurcated the insureds’ bad faith claims from the insurer’s coverage claim in a suit filed by an insurer against its insured contractor and subcontractor because bifurcation would avoid any potential prejudice to the insurer by a jury.
August 26, 2024
Federal Judge Enters Take-Nothing Judgment In Insurer’s Suit Against Contractor

CHARLESTON, S.C. —A federal judge in South Carolina entered a take-nothing judgment in an insurer’s lawsuit seeking a declaration that it had no duty to indemnify a contractor against an underlying construction defects lawsuit brought by a homeowner’s estate after finding that the court lacked subject matter jurisdiction to rule on the declaratory judgment action.
August 26, 2024
Policy Excludes Coverage For New Construction, 9th Circuit Affirms

SEATTLE — The Ninth Circuit U.S. Court of Appeals on Aug. 23 affirmed a lower federal court’s ruling that an insurer did not breach its duty to defend its subcontractor insured against homeowners’ underlying construction defects claims, finding that the underlying claims are barred from coverage because they involve new construction.
August 26, 2024
Judge: Fact Issues As To When Water Damage Occurred Preclude Summary Judgment

SAN DIEGO — A federal judge in California denied an insurer’s motion for partial summary judgment in another insurer’s lawsuit seeking equitable contribution after it was left to defend a subcontractor against underlying claims that it installed faulty concrete in a parking garage, finding that fact issues preclude summary judgment.