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

Mealey's Construction Defects Insurance

July 09, 2024
Judge: Insureds Failed To Show Their Damage Was Not Caused By Defect, Deterioration

LOS ANGELES — A federal judge in California held that damages to insureds’ property “were caused by a defect, weakness, inadequacy, fault, or unsoundness in design, repair, construction, or materials — which in turn caused wear, tear, . . . deterioration, and wet or dry rot” and that, as a result, their loss is excluded from coverage under their homeowners insurance policy.
July 08, 2024
Panel Certifies Question To Wyoming High Court In Negligence Suit Against Engineer

DENVER — The 10th Circuit U.S. Court of Appeals certified a question to the Wyoming Supreme Court in a subrogated homeowners insurer’s appeal of a Wyoming federal court’s ruling that its claim against an engineering firm that designed a home’s plumbing is time-barred by the two-year statute of limitations for professional negligence claims.
July 02, 2024
Judge: CGL Insurer Has No Duty To Defend Suit Alleging Substandard Work By Insured

SANTA ANA, Calif. — A federal judge in California granted a commercial general liability insurer’s motion for judgment on the pleadings in its declaratory judgment lawsuit disputing coverage for an underlying action alleging that its insured did substandard work on a Los Angeles luxury apartment project before being fired and it was liable for flooding damage to switchgear, finding that the insurer has no duty to defend or indemnify because the insured’s alleged “shoddy work” fails to constitute “property damage” to trigger coverage.
June 28, 2024
Judgment Entered In CGL Coverage Suit After Insurer, Contractor Seek Dismissal

OAKLAND, Calif. — A judgment was entered declaring that a commercial general liability insurer has no duty to defend or indemnify a contracting company insured and its owner against an underlying lawsuit alleging defective work on a home renovation project the same day a California federal judge signed the parties’ stipulation and proposed order for entry of final judgment.
June 26, 2024
D.C. Circuit Reverses Ruling In Insurers’ Favor In Dispute Over Condensation Damage

WASHINGTON, D.C. — The District of Columbia Circuit U.S. Court of Appeals reversed a lower court’s grant of summary judgment in favor of builders risk insurers in a real estate developer and contractor’s lawsuit seeking coverage for remediation of condensation damage, finding that the policies provide coverage because the ensuing-loss clause applies to losses from water damage that was caused by the excluded perils of dampness and temperature changes.
June 24, 2024
Florida Panel: Contractor Waived Its Right To Invoke Rule Against Claim Splitting

MIAMI — A Florida appeals panel reversed a lower court’s summary judgment ruling in favor of a contractor in an insured’s lawsuit seeking recovery of its losses from roof damage that was not covered by its insurance policy, finding that the contractor waived its right to invoke the rule against claim-splitting.
June 24, 2024
Insurer Appeals Rulings In Construction Insurance Suit Prompted By Sprinkler Leak

BATON ROUGE, La. — An excess insurer filed a notice indicating that it is appealing a Louisiana federal court’s rulings that first granted a manufacturer’s motion for summary judgment in a construction insurance dispute stemming from damages caused by a sprinkler leak and then dismissed all of the excess insurer’s claims against the manufacturer with prejudice.
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.