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

Mealey's Construction Defects Insurance

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.
May 23, 2024
Federal Magistrate Dismisses Construction Insurance Dispute After Homeowners Settle

ROCHESTER, N.Y. — A federal magistrate judge in New York dismissed with prejudice an insurance coverage dispute stemming from allegations that former homeowners failed to disclose structural and environmental issues in connection with a home they sold after the former homeowners, new owners and insurers agreed to a settlement, nearly a year after the parties stipulated to dismissing an appeal to the Second Circuit U.S. Court of Appeals of the magistrate judge’s grant of summary judgment to the insurers.
May 23, 2024
Contribution Suit Against Guaranty Association Dismissed After Stipulation Filed

JACKSONVILLE, Fla. — After parties filed a joint stipulation of dismissal in a Florida federal court, a judge dismissed with prejudice a New Mexico commercial general liability insurer’s suit seeking defense costs and indemnity for an underlying construction defects action from the Florida Insurance Guaranty Association (FIGA), as successor in interest to a now-insolvent Florida commercial liability insurer.
May 21, 2024
Faulty Concrete Coverage Claims Voluntarily Dismissed By Insurer, Contractor

MIAMI — A Florida federal magistrate judge dismissed with prejudice an insurance dispute where the magistrate judge previously ruled that an insurer’s policy does not bar coverage for a contractor accused of defective work on a Florida highway after the parties issued a joint stipulation of dismissal.
May 16, 2024
Contractor Says 7th Circuit Opinion Conflicts With Illinois Insurance Law

CHICAGO — A general contractor petitioned the Seventh Circuit U.S. Court of Appeals for en banc rehearing, arguing that 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 cannot be squared away with “well settled Illinois law requiring insurers to defend policyholders unless the underlying facts pled preclude any possibility of coverage.”
May 15, 2024
Construction Insurance Coverage Suit Tossed After Underlying Suit Settles

AUGUSTA, Ga. — A federal judge in Georgia dismissed without prejudice a declaratory judgment action brought by an insurer that claimed it owed no coverage for claims related to the insureds’ assembly of a manufactured home that sustained water and mold damage after the parties indicated that the underlying suit had been settled.
May 13, 2024
9th Circuit Affirms No ‘Accident’ In Appeal Of Construction Insurance Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 13 affirmed in an unpublished memorandum a Nevada federal judge’s grant of an insurer’s motion for judgment on the pleadings in a coverage dispute with a contractor and a homeowners association (HOA), finding that the insurer was entitled to a declaratory judgment of no coverage because an “accident” had not occurred while the contractor worked on one of the HOA’s buildings.
May 13, 2024
Insured Cannot Reassert Bad Faith Claim In Collapse Coverage Suit, Judge Says

PHILADELPHIA — A Pennsylvania federal judge denied an insured’s motion for leave to reassert a bad faith claim against its commercial property insurer in a dispute over coverage for the partial collapse of a building because the insured failed to show that the insurer’s reliance on the policy’s faulty workmanship exclusion to deny coverage was unreasonable.
May 10, 2024
New Jersey Appeals Court Says Subcontractor Was Part Of Settlement With Owner

JERSEY CITY, N.J. — The New Jersey Superior Court Appellate Division found that a trial court judge erred by finding that a subcontractor was not enrolled in a contractor consolidated insurance program (CCIP); the appeals court reversed the judge’s decision to deny the subcontractor’s motion to enforce a settlement agreement in the dispute over construction damages and dismiss the claims against it.
May 09, 2024
Mississippi Appeals Court: Contractor, Insurer’s Indemnity Claim Unripe When Filed

JACKSON, Miss. — The Mississippi Court of Appeals upheld a state circuit court’s decision to dismiss a declaratory judgment complaint brought by a contractor and its insurer against a subcontractor in a coverage dispute stemming from faulty masonry, finding that the question of the insurer’s duty to indemnify the subcontractor was not ripe when the complaint was filed.
May 09, 2024
Insurer Not Prejudiced By Letting Contractor Amend Counterclaims, Magistrate Says

SEATTLE — A federal magistrate judge in Washington granted a contractor’s motion to amend its counterclaims and third-party complaint in a coverage dispute with two insurers over the insurers’ duty to defend the contractor against allegations of faulty construction of a conveyance pipe for a sewer overflow control project; the contractor filed its amended counterclaims on the same day.
May 09, 2024
Magistrate Judge: Insurer’s Duty To Defend, Indemnify Concrete Company Not Ripe

AUSTIN, Texas — A federal magistrate judge in Texas recommended the stay of a declaratory judgment complaint brought by an insurer against an insured concrete company, finding that the question of whether the insurer must indemnify and defend the company against claims in a series of underlying complaints for alleged faulty installation of concrete is not yet ripe for consideration.
May 08, 2024
Judge Rules New Orleans Cannot Make Insurers Arbitrate Airport Construction Claims

NEW ORLEANS — A federal judge in Louisiana found that New Orleans cannot compel arbitration with insurers over coverage stemming from construction damages at a city airport, finding that the insurers did not agree to arbitrate claims asserted by the New Orleans Aviation Board (NOAB).
May 08, 2024
3rd Circuit OKs Dismissal Of Stucco Subcontractor’s Appeal Of Coverage Dispute

PHILADELPHIA — The Third Circuit U.S. Court of Appeals dismissed an insured stucco subcontractor’s appeal of a Pennsylvania federal judge’s ruling granting judgment on the pleadings to two insurers who argued they had no duty to defend the subcontractor against water damage claims, after the parties filed a stipulation of voluntary dismissal.
May 07, 2024
Idaho Law Precludes Homeowner From Bringing Claims Against Insurer In Roofing Row

POCATELLO, Idaho — Warranty claims brought by a homeowner against an insurer and a roofing company that allegedly failed to repair a roof are barred against the insurer because insurers may not be sued under Idaho law absent a contractual or statutory provision authorizing an action, an Idaho federal judge found in granting the insurers’ motion to dismiss.
May 06, 2024
Insurer, HOA File Notice Of Tentative Settlement In Dispute Over Constructed Homes

JACKSONVILLE, Fla. — An insurer and a homeowners’ association filed a notice in a Florida federal court indicating that they intend to file a joint stipulation of dismissal of their construction insurance dispute, wherein the insurer sought a declaration that it owed no indemnification to a subcontractor that worked on homes operated by the HOA, due to a tentative settlement in an underlying lawsuit.
May 03, 2024
Federal Judge Finds No Jurisdiction In Construction Insurance Dispute, Remands

SAN FRANCISCO — A federal judge in California remanded to state court a construction insurance dispute brought by a contractor alleging that its insurer acted in bad faith when it refused to pay for most of an arbitration award related to a faulty roof, finding that the insurer failed to join necessary parties when removing the case to federal court.
May 03, 2024
Judge: No Duty For Agent To Procure Policy Without Exclusions For Contractor

DENVER — A Colorado federal judge granted a procuring insurance agent’s motion for summary judgment on claims assigned to a couple by the contractor that defectively constructed their home, finding that the couple failed to establish that the contractor had entered into a contract with the procuring insurance agent that would require it to provide an insurance policy that did not contain policy exclusions that led to denial.
May 01, 2024
10th Circuit: Insurer’s Coverage Denial For Steel Collapse Not In Bad Faith

DENVER — A 10th Circuit U.S. Court of Appeals panel on April 30 affirmed a Wyoming federal judge’s finding that a building owner insured is owed no coverage under an insurance policy’s additional abrupt collapse coverage, finding that the building owner did not show that the insurer or its claims service manager acted in bad faith.