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

Mealey's Construction Defects Insurance

March 01, 2024
11th Circuit Agrees Coverage For Construction Manager Barred By Exclusion

ATLANTA — In an unpublished Feb. 29 opinion, a panel the 11th Circuit U.S. Court of Appeals affirmed the finding of a federal judge in Florida who determined that an insurance policy’s professional services exclusion bars the insurer’s duty to defend an insured construction management company that was sued for construction defects at an apartment project where it served as a construction manager.
February 29, 2024
Travelers Appeals Finding It Wasn’t Owed Contribution In Construction Coverage

SANTA ANA, Calif. — A contractor’s insurer that sought equitable contribution and equitable indemnification from a subcontractor’s insurer filed a notice of appeal on Feb. 28 in a California federal court, appealing the ruling of a federal judge who found that the subcontractor’s insurer owed no defense to the contractor as an additional insured.
February 29, 2024
Insurers Settle Claims Over Subcontractors’ Insurers’ Duty To Reimburse Defense

FAYETTEVILLE, Ark. — After the parties stipulated to a voluntary dismissal, a clerk’s Feb. 28 order in a federal court in Arkansas dismissed with prejudice the claims between two insurers in a dispute over whether the insurers of subcontractors were obliged to reimburse a construction company’s insurer for its defense of claims of faulty work in an arbitration; the order is the latest in a series of orders dismissing other insurers from the action.
February 29, 2024
California Judge Finds Insurer Need Not Cover Damages Caused By Subcontractor

LOS ANGELES — A California judge has dismissed with prejudice a building owner and general contractor’s lawsuit seeking payment from a subcontractor’s insurer for an underlying $1.1 million default judgment entered against the subcontractor, agreeing with the insurer that coverage is barred by a policy exclusion precluding coverage for damage caused by the subcontractor’s faulty work.
February 28, 2024
Montana High Court Affirms Ruling In Contractor’s Favor In Its Suit Against Agent

HELENA, Mont. — The Montana Supreme Court on Feb. 27 determined that a lower court did not err in granting summary judgment as to liability in favor of a general contractor in its lawsuit alleging that its insurance agent failed to procure the coverage it requested, affirming a $1,205,518.63 final judgment in favor of the contractor in a coverage dispute arising from underlying negligence, professional negligence and breach of contract claims brought by the developer of a condominium building.
February 27, 2024
Louisiana High Court Refuses To Disturb Rulings In Favor Of Insurer, Engineer

NEW ORLEANS — The Louisiana Supreme Court on Feb. 27 refused to review an appeals court’s affirmation of a lower court’s summary judgment rulings in favor of an insurer and engineer in a lawsuit arising from a contractor’s claims that plans, specifications and bidding documents were inadequate and insufficient to properly construct a road in Terrebonne Parish, refusing to disturb the appeals court’s conclusion that because an engineer insured has no liability to Terrebonne Parish Consolidated Government (TPCG) as a matter of law, the engineer’s professional liability insurer also cannot be held liable to TPCG.
February 27, 2024
Federal Magistrate Recommends Finding Insurer Owes No Defense After Roof Failure

NEW YORK — A federal magistrate judge in New York recommended a ruling that an insurer owes no duty of defense or indemnification in an underlying suit that accuses a contractor and a subcontractor of faulty work on roofs in a New York City apartment complex that failed during Hurricane Sandy.
February 27, 2024
5th Circuit Dismisses Contractor’s Insurer’s Appeal Of Ruling Denying New Trial

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals has dismissed without prejudice a contractor’s insurer’s appeal of a ruling denying its motion for a new trial or reconsideration of an earlier ruling dismissing its suit against a subcontractor’s insurer to recover damages the contractor’s insurer paid stemming from water damage caused by the subcontractor’s negligence in performing work on a home’s roof.
February 26, 2024
Texas Panel: Trial Court Must Rule On Motions In Construction Insurance Dispute

CORPUS CHRISTI, Texas — A Texas appeals court panel granted an insurer’s petition for a writ of mandamus, finding that a trial court abused its discretion by failing for more than three years to rule on motions for summary judgment filed in a dispute between insurers over the duty to defend a subcontractor whose allegedly faulty work caused damage at a Texas elementary school.
February 23, 2024
Building Owner Files Notice Of Appeal To 6th Circuit In Wall Collapse Coverage Suit

CHATTANOOGA, Tenn. — A building owner filed a notice of appeal to the Sixth Circuit U.S. Court of Appeals following a judgment entered by a Tennessee federal judge in favor of the insurer in a dispute between the building owner, contractor and insurer over coverage for the replacement of the building’s wall that fell during renovation work.
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.