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

Mealey's Construction Defects Insurance

November 18, 2024
Judge: CGL Insurer Has No Duty To Indemnify Contractor For Negligent Work Claims

SAN FRANCISCO — A federal judge in California granted a commercial general liability insurer’s motion for partial summary judgment seeking a declaration that it has no duty to indemnify its contractor insured against an underlying lawsuit alleging the insured performed negligent contractor work, finding there are no triable questions of material fact and coverage is excluded for the damages alleged in the underlying lawsuit.
November 18, 2024
Judge Dismisses 1 Insurer From Bad Faith Suit Arising From Construction Defects

DENVER — Following the parties’ joint stipulation of dismissal, a federal judge in Colorado dismissed with prejudice one insurer from a plaintiff insurers breach of contract and bad faith lawsuit seeking recovery of the defense and settlement costs that it paid on behalf of its general contractor insured in an underlying construction defects lawsuit.
November 11, 2024
1st Circuit Affirms Insurer Has No Duty To Defend Contractor On Different Grounds

BOSTON — The First Circuit U.S. Court of Appeals on Nov. 8 affirmed a Massachusetts federal court’s order of final judgment in favor of a commercial general liability insurer and two intervenor plaintiffs in a declaratory judgment lawsuit in which the insurer alleged that it owed a contractor and his two construction companies no duty to defend against lawsuits accusing them of breach of contract in connection with construction defects at an apartment complex in New Jersey, focusing on the policy’s “your work” exclusion in finding that coverage is barred.
November 11, 2024
Policy’s ‘Your Work,’ ‘Stucco’ Exclusions Do Not Bar Coverage, Federal Judge Rules

ORLANDO, Fla. — A federal judge in Florida denied an insurer’s motion for summary judgment and granted the defendants’ cross-motion for summary judgment in the insurer’s lawsuit seeking a declaration as to coverage for construction-related damages at a condominium development, rejecting the insurer’s argument that the insurance policy’s “your work” and stucco exclusions bar coverage.
November 08, 2024
Judge Partly Grants Subcontractor’s Motion To Dismiss Insurer’s Coverage Suit

BIRMINGHAM, Ala. — A federal judge in Alabama granted a subcontractor’s motion to dismiss an insurer’s request for a declaratory judgment that it has no duty to indemnify the subcontractor against an underlying lawsuit alleging claims for breach of implied warranty of fitness, breach of implied warranty of good workmanship, breach of contract and common-law indemnity because the indemnification claim is not ripe but allowed the insurer’s claims seeking a declaratory judgment that it has no duty to defend to proceed.
November 05, 2024
Contractor Supports Appeal Of $2.3 Million Arbitration Award In Favor Of Insurer

NEW YORK — Replying to insurers’ assertion that its argument on appeal is a “baffling hodgepodge of factual omissions, misstatements of fact, and misapplications of law,” a general contractor countered that the insurers’ argument “reads as a disturbing, conspiratorial, accusatory tirade” and asked the Second Circuit U.S. Court of Appeals to reverse a decision upholding an arbitration panel’s award of a $2.3 million judgment in the insurers’ favor as part of a settlement with a subcontractor that the insurers said provided faulty concrete work for a construction project.
November 05, 2024
Judge Refuses To Dismiss Insurer’s Suit Disputing Coverage For Negligence Claims

LOS ANGELES — A federal judge in California refused to dismiss an insurer’s lawsuit disputing coverage for an underlying negligence lawsuit brought against its interior designer insured, finding that its duty to hear the declaratory claims is mandatory because the insurer also seeks reimbursement from its insured for the underlying defense costs.
November 05, 2024
Insurer Voluntarily Dismisses Remaining Defendants In Faulty Construction Coverage Suit

DENVER — A plaintiff insurer asked a Colorado federal court to dismiss the remaining defendants in a dispute over coverage for a construction company accused of causing damages to homes through faulty construction following settlements reached by the plaintiff insurer and defendant insurers.
November 04, 2024
Kentucky Panel Affirms No Coverage Ruling In Insurer’s Dispute With Contractor

FRANKFORT, Ky. — A Kentucky appeals court on Nov. 1 affirmed a lower court’s grant of a commercial general liability insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing coverage for an underlying action brought against its general contractor insured, finding if the insured’s faulty workmanship is the cause of damage to a swimming pool that it installed, then coverage does not apply because it is not an accident or occurrence, and coverage would still not apply if another contractor caused the damage because the policy covers the actions and liabilities of only the insured.
November 04, 2024
Federal Judge Dismisses Equitable Contribution Suit After Insurers Reach Settlement

SAN DIEGO — The same day the parties filed a stipulation to dismiss, a federal judge in California dismissed with prejudice the insurer’s lawsuit seeking equitable contribution from another insurer after it was left to defend a subcontractor against underlying claims that it installed faulty concrete in a parking garage.
October 28, 2024
Judge: CGL Insurer Has No Duty To Defend Against Suit Alleging Defective Work

EL DORADO, Ark. —A federal judge in Arkansas granted a commercial general liability insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to defend its insured against underlying breach of contract and breach of warranty of sound workmanship claims for unfinished construction and fraud for misrepresenting both his credentials and background as a construction contractor, finding that the insured’s alleged actions giving rise to property damage “were undoubtedly ‘first set in motion’” before the policy began.
October 28, 2024
5th Circuit Dismisses Subcontractor Insurer’s Appeal After Settlement Announced

NEW ORLEANS — One day after the parties announced they reached a settlement, the Fifth Circuit U.S. Court of Appeals dismissed a subcontractor insured’s appeal of a Texas federal court’s finding that it is not entitled to equitable contribution from another insurer because of policy exclusions related to suits seeking contribution.
October 28, 2024
Insurer Asks California Court To Dismiss Subrogation Suit Against Roofer

LOS ANGELES — An insurer seeks dismissal with prejudice of its entire subrogation lawsuit against a roofer in a case that was consolidated with a condominium homeowners association’s breach of contract and bad faith lawsuit arising from storm damage to the roof of a Studio City building that housed 31 luxury condominiums.
October 23, 2024
Judge Dismisses Insurers Following Settlement In Faulty Construction Coverage Suit

DENVER — A federal judge in Colorado issued two minute orders dismissing with prejudice two defendant insurers and their subcontractor insureds from a dispute over coverage for a construction company accused of causing damages to homes through faulty construction after the plaintiff insurer and defendant insurers reached settlements.
October 21, 2024
Insured Appeals No Coverage Ruling In Suit Over Improperly Constructed Walls

TACOMA, Wash. — An insured file a notice indicating it is asking the Ninth Circuit U.S. Court of Appeals to review a Washington federal judge’s findings that an insurance policy’s impaired property exclusion bars coverage for underlying damage caused by improperly constructed retaining walls and that the “sudden and accidental injury” exception to the exclusion does not apply.
October 21, 2024
CGL Insurer: Panel’s Opinion Contradicts Pennsylvania Law As To Faulty Workmanship

PHILADELPHIA — A commercial general liability insurer filed a petition for rehearing en banc challenging the Third Circuit U.S. Court of Appeals’ per curiam opinion that vacated a lower federal court’s summary judgment ruling in its favor in a coverage dispute arising from a construction company insured’s allegedly defective renovation work, arguing that the panel’s opinion “contradicts Pennsylvania law that faulty workmanship is not an ‘occurrence,’ regardless if the damage at issue extends beyond the scope of a contractor’s work.”
October 18, 2024
Contractor Appeals No Coverage Ruling In Suit Arising From Alleged Faulty Roof Work

NEW YORK — A contractor filed a notice indicating that it is appealing a New York federal court’s ruling that adopted a magistrate’s report and recommendation in concluding that insurers owe no coverage for an underlying lawsuit that accuses the contractor and a subcontractor of faulty work on roofs in a New York City apartment complex that failed during Hurricane Sandy.
October 14, 2024
S.C. Federal Judge Says No Coverage Owed To Insured For Failure To Disclose

GREENVILLE, S.C. — A federal judge in South Carolina has granted a homeowners insurer’s motion for judgment after determining that it had no duty to defend and indemnify a policyholder sued for failing to disclose water intrusion issues during the sale of his townhome because the policy does not provide coverage for the insured’s alleged failure to disclose information during the sale of the property.
October 11, 2024
Judge Vacates Trial In Equitable Contribution Suit After Parties Announce Settlement

SAN DIEGO — A federal judge in California vacated a trial scheduled for Nov. 19 in an insurer’s lawsuit seeking equitable contribution from another insurer after it was left to defend a subcontractor against underlying claims that it installed faulty concrete in a parking garage, noting that the parties indicated they have reached a settlement.
October 11, 2024
Judge Partly Grants Insurer’s Motion To Dismiss In Coverage Dispute Over Settlement

DENVER — A federal judge in Colorado granted in part and denied in part a defendant insurer’s partial motion to dismiss a plaintiff insurer’s lawsuit seeking contribution for an underlying settlement arising from claims that the subcontractor insured’s defective and cracking stucco work resulted in property damage at a retirement community, dismissing the claims for declaratory judgment and common-law and statutory bad faith.
October 08, 2024
Panel Vacates, Remands No Coverage Ruling In Dispute Over Defective Renovation Work

PHILADELPHIA — The Third Circuit U.S. Court of Appeals vacated a District Cout’s summary judgment ruling in favor of a commercial general liability insurer of a construction company found to have performed defective renovation work on the appellant’s property, finding that the appellant’s claim for damage to the chimney and concrete pads could potentially constitute occurrences.
October 04, 2024
Panel Vacates Portion Of Ruling Issued In Insurer’s Favor In Mold Coverage Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals vacated a district court’s summary judgment ruling in favor of an insurer on breach of contract, declaratory judgment and bad faith claims after determining that the insured met its burden of proving that there is a potential of coverage for mold damage even if there was damage that existed before the issuance of the policy.
October 04, 2024
Judge Extends Deadline For Early Neutral Evaluation In Insurer’s Subrogation Suit

BURLINGTON, Vt. —A federal chief judge in Vermont granted a defendant’s motion to extend the deadline for early neutral evaluation in a property insurer’s subrogation lawsuit arising from water losses that occurred at its insureds’ property as a result of the purportedly defective design, construction, maintenance and repairs of a sprinkler system.
October 02, 2024
Professional Insurer, Contractor Settle Cross-Claims In Mold Damage Coverage Suit

LAS VEGAS — A professional liability insurer and a contractor filed a notice in a Nevada federal court indicating that they have settled their cross-claims in a mold and moisture damage coverage dispute.
October 02, 2024
Judge: Insurer Has Duty To Defend, Indemnify Against Claims Arising From Collapse

CHICAGO — Granting an insured’s motion for partial summary judgment, a federal judge in Illinois held that an insurer has a duty to defend the insured against an underlying action alleging that the insured’s excavation work on ultraviolet disinfection facilities caused the collapse of an embankment supporting tracks for a line on the Chicago Transit Authority (CTA) and has a duty to indemnify the insured against a second lawsuit brought by the project’s general contractor.