Mealey's Construction Defects Insurance

  • March 24, 2017

    Judge: Subcontractors Owe Defense To Subrogated Insurer’s Negligence Claim

    BOSTON — Three subcontractors owe a defense to a general contractor against negligence and breach of the implied warranties of habitability and good workmanship claims brought by a subrogated insurer for water damage in a condominium building, a Massachusetts federal judge ruled March 22 (Philadelphia Indemnity Insurance Co. v. Consigli Construction Company Inc., et al. v. Central Ceilings Inc., No. 14-14687, D. Mass., 2017 U.S. Dist. LEXIS 41444).

  • March 22, 2017

    Excess Insurer Had No Duty To Indemnify Construction Defect Suit, Judge Finds

    DENVER — An excess insurer had no duty to indemnify two insureds for a construction defect case because the primary policy was not yet exhausted, a Colorado federal judge ruled March 20, dismissing a reimbursement lawsuit filed by two other insurers seeking monies for the defect case’s settlement (Zurich American Insurance Co. and American Guarantee and Liability Insurance Co. v. Acadia Insurance Co., No. 14-01273, D. Colo., 2017 U.S. Dist. LEXIS 39579).

  • March 21, 2017

    Judge: Insurer Breached Duty To Defend, Indemnify Construction Suit Settlement

    ANCHORAGE, Alaska — An insurer breached its duty to defend and indemnify an insured for a settlement of underlying claims arising out of a breach of contract dispute on a construction project, an Alaska federal judge ruled March 16; however, the judge held that the insurer did not breach its duty of good faith (KICC-Alcan General, joint venture v. Crum & Forster Specialty Insurance Company Inc., No. 15-00255, D. Ala.; 2017 U.S. Dist. LEXIS 37560).

  • March 20, 2017

    Judge Rules On Insurer’s Duty To Defend, Indemnify Construction Defects Case

    BIRMINGHAM, Ala. — A commercial liability insurer had a partial duty to defend one of two insureds in an underlying construction defects case, an Alabama federal judge ruled March 16, granting in part and denying in part summary judgment to the insurer; however, the judge denied summary judgment on the duty-to-indemnify issue without prejudice to the insurer’s right to refile (Auto-Owners Insurance Co. v. Wier-Wright Enterprises Inc. d/b/a Doug Wiersig Homes, et al., No. 15-1118, N.D. Ala.; 2017 U.S. Dist. LEXIS 37477).

  • March 17, 2017

    Federal Judge Bars Expert Testimony On Some Repair Costs For Insureds’ Damages

    TULSA, Okla. — An Oklahoma federal judge on March 14 excluded testimony from an expert on estimates to repair a master control center (MCC) and electrical costs as a result of insureds’ damages caused by a contractor and subcontractor’s inadequate design and installation of the concrete columns but allowed other estimates to be admitted (Lexington Insurance Co., et al. v. Newbern Fabricating Inc. and Baucom Concrete Construction Inc. & Newbern Fabricating Inc. v. Doveland Engineering Co., No. 14-0610, N.D. Okla.; 2017 U.S. Dist. LEXIS 36133).

  • March 16, 2017

    Texas Federal Judge Says Carrier Has A Duty To Indemnify Insured

    HOUSTON — A Texas federal judge on Feb. 27 determined that an insurer has a duty to indemnify its insured for an underlying product liability suit but found no support for the insured’s extracontractual claims and, accordingly, dismissed those claims against the insurer (U.S. Metals Inc. v. Liberty Mutual Group Inc., et al., No. 12-379, S.D. Texas, 2017 U.S. Dist. LEXIS 32507).

  • March 15, 2017

    Judge Defines ‘Collapse,’ Finds Insurer Has No Duty To Indemnify Damage

    CHICAGO — A homeowners insurance policy was intended to cover only a peril in which a building loses its character as a building, an Illinois federal judge ruled March 14, in defining “collapse” under the policy and finding that the insurer has no duty to indemnify damage caused by a contractor to the insureds’ home (The Travelers Home and Marine Insurance Co. v. Patrick Walsh and Colleen Walsh, No. 15-3063, N.D. Ill.; 2017 U.S. Dist. LEXIS 35841).

  • March 14, 2017

    Insureds Failed To Prove Bad Faith Claim, Delaware Supreme Court Concludes

    WILMINGTON, Del. — Insureds failed to establish evidence that their insurer did not have a reasonable justification for denying their claim for water damage from a broken toilet to their condominium unit, the Delaware Supreme Court ruled March 13, affirming a directed verdict to the insurer on a bad faith claim (Debra Bennett and William Bennett v. USAA Casualty Insurance Co., No. S10C-02-010, Del. Sup.; 2017 Del. LEXIS 105).

  • March 14, 2017

    Judge: Insured’s Poor Work Does Not Trigger Insurer’s Duty To Defend, Indemnify

    DALLAS — Claims arising out of an insured’s poor workmanship do not state allegations of property damage caused by an “occurrence,” a Texas federal judge ruled March 10, finding that a commercial general liability insurer has no duty to defend or indemnify (Atlantic Casualty Insurance Co. v. PrimeLending and First Choice Construction LLC v. Connect Insurance Agency Inc., No. 15-1475, N.D. Texas; 2017 U.S. Dist. LEXIS 34425).

  • March 13, 2017

    ‘Continuous, Progressive Injury’ Exclusion Relieves Insurer Of Duty To Defend, Indemnify

    SACRAMENTO, Calif. — In recommending that default judgment be granted for an insurer, a federal magistrate judge in California on March 9 found that the insurer has no duty to defend or indemnify an underlying construction defects case against an insured because the “continuous or progressive injury and damage” exclusion precludes coverage (Mt. Hawley Insurance Co. v. Crane Development Corp., et al., No. 16-0892, E.D. Calif.; 2017 U.S. Dist. LEXIS 34175).

  • March 10, 2017

    Insurer Has No Duty To Indemnify Faulty Work Settlement, 7th Circuit Says

    CHICAGO — An insurer has no duty to indemnify a settlement of a faulty workmanship claim against a subcontractor, the Seventh Circuit U.S. Court of Appeals affirmed March 8, because claims of an insured’s defective work resulting in damage to its own work do not constitute an “occurrence” caused by “property damage” (Allied Property & Casualty Insurance Co., et al. v. Metro North Condominium Association, No. 16-1868, 7th Cir.; 2017 U.S. App. LEXIS 4107).

  • March 10, 2017

    Panel Upholds Breach Of Contract Award, Reverses Bad Faith Awards Against Insurer

    BEAUMONT, Texas — A Texas appeals panel on March 9 affirmed a jury’s $15,000 award for breach of contract damages but reversed the jury’s $20,000 award of actual damages that resulted from an insurer’s alleged unfair settlement practices and the jury’s award of additional damages of $60,000 that resulted from the finding that the insurer knowingly engaged in unfair settlement practices, rendering judgment that an insured take nothing as to the claims (State Farm Lloyds v. Dennis Webb, No. 09-15-00408-CV, Texas App., 9th Dist.; 2017 Tex. App. LEXIS 1997).

  • March 9, 2017

    Federal Judge Decides Motions In Construction Defects Insurance Dispute

    SAN JOSE, Calif. — In a coverage dispute between various insurers over their responsibility toward an underlying construction defects settlement, a California federal judge on March 7 addressed four summary judgment motions on multiple key issues from the duty to defend to the number of occurrences (St. Paul Fire and Marine Insurance Co. v. Insurance Company of the State of Pennsylvania, et al., No. 15-02744, N.D. Calif.; 2017 U.S. Dist. LEXIS 32551).

  • March 9, 2017

    Judge: Insurer Properly Relied On ‘Maintenance’ Exclusion To Bar Coverage

    PHILADELPHIA — Evidence supported an insurer’s reliance on a “maintenance” exclusion to deny coverage for water damage caused by an insured’s failure to maintain his furnace, the Third Circuit U.S. Court of Appeals ruled March 6, affirming summary judgment in favor of the insurer on breach of contract and bad faith claims handling (David Dougherty v. Allstate Property and Casualty Insurance Co., No. 16-2680, 3rd Cir.; 2017 U.S. App. LEXIS 3930).

  • March 7, 2017

    9th Circuit: Business Risk Exclusions Bar Coverage For Construction Defects Suit

    SAN FRANCISCO — Two business risk exclusions found in a commercial general liability (CGL) insurance policy bar coverage for a construction defects lawsuit, the Ninth Circuit U.S. Court of Appeals held March 2, affirming summary judgment to an insurer on breach of contract and bad faith claims (Archer Western Contractors Ltd. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 15-55648, 9th Cir.; 2017 U.S. App. LEXIS 3796).

  • March 6, 2017

    Federal Judge Dismisses Excess Insurer’s Coverage Case Based Upon Article 3

    ORLANDO, Fla. — An excess insurer’s claims regarding its duty to defend and indemnify an insured against claims of negligent construction in a condominium project do not satisfy the case and controversy requirement of Article III, Section 2, of the U.S. Constitution, a Florida federal judge ruled March 2, dismissing the case (Interstate Fire & Casualty Co. v. McMurry Construction Company Inc., et al., No. 16-841, M.D. Fla.; 2017 U.S. Dist. LEXIS 29501).

  • March 6, 2017

    Judge Dismisses Insured’s Declaratory Relief Claim In Water Damage Dispute

    MIAMI — Dismissing an insured’s request for declaratory relief on coverage for water damage to its property, a Florida federal judge held March 1 that the insured “failed to plead facts necessary to establish any dispute or doubt under the insurance policy” and “failed to allege ambiguity” with regard to a loss settlement provision (Espadon Group Inc. v. Lexington Insurance Co., No. 16-24413, S.D. Fla.; 2017 U.S. Dist. LEXIS 29918).

  • March 6, 2017

    Federal Judge Stays Duty- To-Indemnify Issue In Insurers, Insured Dispute

    RALEIGH, N.C. — Although allowing a coverage dispute between four insurers and an insured to proceed as to the duty to defend a construction defect lawsuit, a North Carolina on March 1 stayed the duty-to-indemnify issue pending resolution of the underlying case (Westfield Insurance Co. v. Weaver Cooke Construction LLC, et al., No. 15-169, E.D. N.C.; 2017 U.S. Dist. LEXIS 28662).

  • March 3, 2017

    Insurer’s Case On ‘Collapse’ Issue On Retrial Fails Without Expert Testimony, Judge Says

    SEATTLE — Having excluded an insurer’s expert testimony in a retrial as inadmissible, a Washington federal judge on March 1 ruled that the insurer cannot establish whether alleged “collapse” conditions observed in 2008 at an insured’s condominium complex were present during another insurer’s policy periods (Houston General Insurance Co. v. St. Paul Fire & Marine Insurance Co., et al., No. 11-2093, W.D. Wash.; 2017 U.S. Dist. LEXIS 29177).

  • March 2, 2017

    Judge: Insurer’s Declaratory Judgment Action May Proceed Against Home Builder

    FORT MYERS, Fla. — A federal judge in Florida on Feb. 22 denied a motion to dismiss a declaratory judgment action brought by an insurer against a home builder in a construction defects lawsuit, ruling that the case could proceed because the insurer is not a party to the underlying litigation brought by the homeowners against the builder (Mid-Continent Casualty Company v. Van Emmerik Custom Homes Inc., et al., No. 16-819, M.D. Fla.; 2017 U.S. Dist. LEXIS 24279).