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

Mealey's Construction Defects Insurance

February 20, 2024
Duty To Defend Triggered In Coverage Dispute By Damage Claims, Judge Rules

CHARLESTON, S.C. — A federal judge in South Carolina on Feb. 16 denied an insurer’s motion for summary judgment in an insurance coverage dispute over a subcontractor’s allegedly faulty installation of siding on a series of townhomes, finding that claims about the damage in the underlying complaint trigger the insurer’s duty to defend the contractor.
February 16, 2024
Federal Judge Orders Briefs On Equitable Tolling In Collapse Coverage Dispute

NEW YORK — While a federal judge in New York found that an insurance company’s breach of contract and negligence claims against a subcontractor were untimely in an insurance subrogation dispute stemming from a structural collapse, the judge denied the contractor’s motion to dismiss, allowing the insurer time to establish the need for equitable tolling in subsequent briefing.
February 14, 2024
Federal Judge Limits Expert Testimony In Construction Insurance Dispute

DENVER — A federal judge in Colorado granted in part a motion to strike expert testimony filed by one of several insurers accused by another insurer of shirking its responsibility to defend a construction company accused of causing damages to homes through faulty construction, limiting the testimony of two expert witnesses; the judge also granted a second motion to exclude the testimony of a third expert witness, finding his proffered opinions not sufficiently reliable.
February 14, 2024
New Mexico Appeals Court Expands On Insurer’s Duty To Defend In Updated Opinion

ALBUQUERQUE, N.M. — After granting a motion for rehearing, the New Mexico Court of Appeals withdrew an opinion it issued in December and replaced it with a slightly expanded version in which the court still reversed a lower court’s grant of summary judgment to insurers based on a contractor’s delayed notification of defect claims after finding that factual disputes remain regarding whether the delay negated the insurers’ duty to defend.
February 12, 2024
11th Circuit Schedules Oral Arguments In Mold Coverage, Bad Faith Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals scheduled oral arguments for April 16 in a mold coverage suit involving an insured’s appeal of a district court’s ruling on breach of contract and bad faith claims and an insurer’s cross-appeal of the district court’s ruling on fraud and conspiracy counterclaims asserted by the insurer.
February 09, 2024
Federal Judge Grants Partial Summary Judgment To Contractor In Pipe Insurance Row

SEATTLE — Rejecting objections to a magistrate judge’s report and recommendations, a federal judge in Washington denied two insurers’ separate motions for partial summary judgment and granted in part a contractor’s motions for partial summary judgment, finding that the insurers owed the contractor a defense against allegations of faulty construction of a conveyance pipe for a sewer overflow control project. However, the judge found that the contractor was not owed a continuing defense from one of the insurers because the issue was mooted by the contractors’ dismissal from the underlying complaint.
February 08, 2024
Judge Says School District Lacks Standing To Sue Insurer For Construction Damages

ST. PAUL, Minn. — A federal judge in Minnesota granted an insurer’s motion to dismiss it as a defendant in a complaint brought by a school district claiming that water damage to a school gymnasium is coverable by a construction firm’s insurance policy, finding in part that the school district lacked standing to bring the complaint against the insurer.
February 08, 2024
Homeowners Tell 9th Circuit Insurer Wrongly Denied Coverage To Subcontractor

SEATTLE — A federal judge in Washington incorrectly found that an insurer did not breach its duty to defend an insured subcontractor against homeowners’ construction defect claims, the homeowners tell the Ninth Circuit U.S. Circuit Court of Appeals, calling the insurer’s alleged breach of the duty to defend “unreasonable, frivolous, and unfounded.”
February 08, 2024
Judge: Too Many Disputes Of Fact For Summary Judgment In Construction Insurance Case

DENVER — A federal judge in Colorado largely denied three competing motions for summary judgment filed in a case where an insurer said several other insurers shirked their responsibility to defend a construction company accused of causing damages to homes through faulty construction, finding that the competing motions were laden with factual disputes.
February 07, 2024
Breach Of Contract, Bad Faith Claims Based On Contractor Referral Fail

PHILADELPHIA — Breach of contract and bad faith claims alleged against a homeowners insurer based on the insurer’s referral of a contractor that did not fully complete the insureds’ repair work must be dismissed without prejudice because the insureds failed to allege sufficient facts in support of the claims, a Pennsylvania federal judge said Feb. 6.
February 07, 2024
Insurer Need Not Defend Contractor That Didn’t Obtain Needed Records, Judge Rules

MONTGOMERY, Ala. — A federal judge in Alabama granted an insurer’s motion for summary judgment, agreeing that the insurer has no duty to defend a construction firm from allegations that it caused structural damage to a couple’s home because the firm failed to obtain written indemnity agreements from subcontractors that were required by the terms of the insurance policy.
January 31, 2024
Wall’s Structural Instability Caused By Deterioration, Not Collapse, Judge Says

CHATTANOOGA, Tenn. — No coverage is owed for the replacement of an entire wall of a building undergoing renovations because the cause of the structural instability of the wall was deterioration and not the collapse of a limited number of bricks from the wall during the construction work, a Tennessee federal judge said Jan. 30 in entering judgment in favor of the insurer.
January 31, 2024
California Panel Says Homeowner’s Online Posts Against Contractor Are Not Protected

LOS ANGELES — A homeowner’s online posts criticizing repair work performed by a general contractor are not protected by litigation privilege because the posts had no substantial relationship to any litigation, a California panel found in affirming the trial court’s decision to deny the homeowner’s motion to strike the contractor’s complaint for libel.
January 31, 2024
Missouri Federal Judge Dismisses Water Damage Suit Following Settlement

ST. JOSEPH, Mo. — A Missouri federal judge dismissed an insured’s suit seeking coverage for water damage caused by the improper installation of the home’s exterior insulation system and exterior doors after the parties filed a joint stipulation for dismissal following the settlement of the insured’s claim.
January 30, 2024
Federal Judge Finds Construction Firm Didn’t State Loss In Insurance Counterclaim

SALT LAKE CITY — A federal judge in Utah dismissed a construction company’s counterclaims against an insurer that sued it seeking a declaratory judgment that it owed the company no duty to defend it from a suit filed by homeowners claiming construction defects, finding that the company failed to state a claim upon which relief could be granted.
January 26, 2024
Construction Firm Ineligible For Defense From Excess Insurers, Federal Judge Rules

OAKLAND, Calif. — A federal judge in California on Jan. 25 granted two excess insurers’ motion for partial summary judgment, finding in part that a construction company and related entities were not entitled to a defense from the insurers because the primary $5 million policy had not been exhausted by judgments or settlements as required by the excess insurance policy.
January 26, 2024
Insurer Failed To Show Homebuilder’s Discovery Requests Are Not Relevant

AUSTIN, Texas — A Texas federal magistrate judge denied a general liability insurer’s motion for a protective order and to quash subpoenas served on three insurance brokers after determining that the insurer does not have standing to challenge the subpoenas served on the insurance brokers and failed to meet its burden of showing that the information sought by the insured homebuilder is not relevant to the construction defects coverage dispute.
January 26, 2024
Washington High Court To Decide Whether Condo’s Water Damage Is Covered By Policy

OLYMPIA, Wash. — The Washington Supreme Court heard arguments from an all-risk insurer seeking the reversal of an appeals court ruling that reversed a lower court’s grant of summary judgment in the insurer’s favor in a coverage dispute stemming from condensation damage to a condominium’s roof, along with arguments from the condominium company that the reversal should be upheld.
January 25, 2024
Homeowners Again Appeal Dismissal Of Defects Coverage Suit To 9th Circuit

TACOMA, Wash. — More than seven months after the Ninth Circuit U.S. Court of Appeals dismissed for failure to prosecute homeowners’ appeal of various rulings in their suit against insurers in a coverage dispute stemming from a construction defects lawsuit over the construction of homes in a housing development, the homeowners filed a new notice of appeal in a federal court in Washington, appealing the same rulings as well as a December order dismissing the case with prejudice.
January 24, 2024
Dismissal Of Construction Defects Suit Again Appealed After Reconsideration Denied

PHILADELPHIA — A property owner has appealed to the Third Circuit U.S. Court of Appeals a district court’s second denial of his motion for reconsideration of a ruling dismissing his suit against the commercial general liability insurer of a construction company found to have performed defective renovation work on his property, adding the reconsideration denial to the appeal he filed of the lower court’s ruling granting the insurer’s motion for summary judgment.
January 24, 2024
Federal Judge: Construction Contract Did Not Require Continuing Coverage

SANTA ANA, Calif. — Finding that an insurer had no duty to defend a construction company as an additional insured in a dispute over damages to a Hard Rock Hotel location because the terms of the original contract included no requirements to maintain insurance beyond the final payment date for the project, a federal judge in California granted the insurer’s motion for summary judgment in a dispute brought by another insurer.
January 24, 2024
Vague Policy Terms Sink Insurer’s Summary Judgment Bid In Faulty Concrete Dispute

MIAMI — Finding that a policy’s language is vague regarding the difference between a “repair” and an “improvement,” a federal magistrate judge in Florida denied summary judgment to an insurer that argued that a contractor’s work on defective bridge concrete constituted an “improvement” not covered by the policy.
January 23, 2024
Insurer Became Real Party In Interest After Construction Firm Settled, Judge Finds

DENVER — An insurance company will be allowed to amend its complaint against all defendants remaining in a dispute stemming from faulty construction of homes within a Colorado country club community after the main contractor settled its counterclaims with the insurer and assigned to it the prosecution of all its claims, a federal judge in Colorado ruled.
January 22, 2024
High Court Refuses To Consider If Damage Caused By Insured’s Work Is Occurrence

WASHINGTON, D.C. — The U.S. Supreme Court denied a petition for a writ of certiorari on Jan. 22, refusing to consider whether the Third Circuit U.S. Court of Appeals rewrote Pennsylvania insurance law in its application of the faulty workmanship doctrine when it found that damages to natural gas wells caused by an insured’s fracking work does not constitute an occurrence under a commercial general liability policy.
January 22, 2024
Bridgebuilder, Insurer Stipulate To Dismissal Of Damage Coverage Claims

WASHINGTON, D.C. — A bridgebuilder and its builders risk insurer have agreed to the dismissal with prejudice of the builder’s breach of contract and bad faith suit against the insurer; the builder last year had been granted summary judgment on the breach of contract claim after a federal judge in the District of Columbia found that the policy’s definition of “damage” includes the builder’s claim for reimbursement for repair costs necessitated by defects in the concrete of the bridge and that the insurer failed to demonstrate that any exclusions apply.