Mealey's Construction Defects Insurance

  • October 12, 2017

    Judge Finds Fact Issues Exist Over Knowledge Of Claim Under Performance Bond

    CHICAGO — Material fact issues remain as to when a contractor knew of a construction defects claim under a performance bond, an Illinois federal judge ruled Oct. 10, denying summary judgment on a surety’s statute of limitations defense (James McHugh Construction Co. v. International Fidelity Insurance Co., No. 14-02399, N.D. Ill., 2017 U.S. Dist. LEXIS 166729).

  • October 11, 2017

    New Jersey Panel Says Continuous Trigger Applies In Defects Coverage Dispute

    TRENTON, N.J. — A New Jersey appeals panel on Oct. 10 agreed with a subcontractor that the continuous trigger theory applies to a dispute over whether coverage is owed by one of its insurers but remanded to the trial court the issue of when the manifestation began (Air Master & Cooling Inc. v. Selective Insurance Company of America, et al., No. A-5415-15T3, N.J. Super, App. Div., 2017 N.J. Super. LEXIS 144).

  • October 11, 2017

    Insured Asks Florida High Court To Reverse Ruling In Dispute Over Water Damage

    TALLAHASSEE, Fla. — An insured has asked the Florida Supreme Court to reverse an appeals court’s finding that an insurer was wrongfully denied an opportunity to argue that it could repair an insured’s water damaged kitchen and that hiring a general contractor was unnecessary (David Gal v. Prepared Insurance Co., No. 16-2190, Fla. Sup.).

  • October 11, 2017

    Home Developer Seeks Independent Counsel From Subcontractor’s Insurer

    SACRAMENTO, Calif. — A subcontractor’s insurer must provide a home developer with independent counsel in an action brought by homeowners suing for defects because the insurer is defending two sides in the action, the home developer argues in a reply brief filed Aug. 9 in the Third District California Court of Appeal (Centex Homes, et al. v. St. Paul Fire and Marine Insurance Company, No. C081266, Calif. App., 3rd Dist.).

  • October 10, 2017

    Additional Insured’s Bad Faith, Breach Of Contract Claims Survive Dismissal

    LAS VEGAS — An additional insured sufficiently alleged breach of contract and bad faith claims against an insurer for improperly denying a construction defects claim, a Nevada federal judge ruled Sept. 29, declining to dismiss the claims (Centex Homes v. Everest National Insurance Co., et al., No. 16-01275, D. Nev., 2017 U.S. Dist. LEXIS 162687).

  • October 6, 2017

    Judge Dismisses Insurer’s Duty To Indemnify Case Over Defects Coverage

    FORT MYERS, Fla. — A commercial general liability insurer filed its declaratory judgment action on its duty to indemnify an underlying construction defects case prematurely, a Florida federal judge ruled Oct. 5, dismissing the case (Mid-Continent Casualty Co. v. G.R. Construction Management Inc., et al., No. 17-55, M.D. Fla., 2017 U.S. Dist. LEXIS 165245).

  • October 5, 2017

    Judge Finds No Evidence Of Policy Exhaustion, Dismisses Complaint

    OAKLAND, Calif. — After finding that a construction company and glass and aluminum company that were sued in an underlying defects case failed to show that they had exhausted primary coverage policies, a California federal judge on Sept. 28 granted an insurer’s motion to dismiss their claims against it for coverage (Webcor Construction, LP, et al. v. Zurich American Insurance Co., et al., No. 17-cv-02220, 2017 U.S. Dist. LEXIS 160267).

  • October 5, 2017

    California Appeals Panel: Insurer Owes For Water Damage To Modular Units

    RIVERSIDE, Calif. — An insurer must pay for damage to modular units that were delivered without completed roofs and sustained water damage over several months, and that amount is not to be offset by a prior settlement between the general contractor for the project and the insured that was responsible for building and delivering the units, a California appellate panel ruled Sept. 8 (Global Modular, Inc. v. Kadena Pacific, Inc., North American Capacity Insurance Co. v. Kadena Pacific, Inc., No. E063551, Calif. App., 4th Dist., Div. 2, 2017 Cal. App. LEXIS 778).

  • October 4, 2017

    Judge: ‘Deleterious Substances’ Exclusion Bars Coverage For Insured’s Grout Dust Work

    PHILADELPHIA — A commercial general liability insurer did not breach its insurance contract nor did it act in bad faith in denying a claim, a Pennsylvania federal judge ruled Sept. 29 because “deleterious substances” exclusion precluded coverage for grout dust from construction work that led to property damage (Collin R. Ginther v. Preferred Contractors Insurance Company Risk Retention Group LLC, No. 16-686, E.D. Pa., 2017 U.S. Dist. LEXIS 161720).

  • October 4, 2017

    Judge: Contractor Fails To Assert Declaratory Relief Counterclaim Against Insurer

    WEST PALM BEACH, Fla. — A contractor failed to provide sufficient allegations to support its declaratory relief counterclaim against an insurer over coverage for alleged construction defects that damaged an insured’s home, a Florida federal judge ruled Sept. 29 (Mid-Continent Casualty Co. v. JWN Construction Inc., et al., No. 17-80286, S.D. Fla., 2017 U.S. Dist. LEXIS 160751).

  • September 29, 2017

    9th Circuit Affirms Treble Damages Awarded To Builder For Denied Claim

    SEATTLE — A Ninth Circuit U.S. Court of Appeals panel on Sept. 20 overruled an insurance company’s appeal of rulings denying its motions for post-trial relief, finding that a federal judge in Washington did not err when denying the company’s request for an 11-page special verdict form and allowing a jury to determine the amount of treble damages the insurer should pay pursuant to Washington's Insurance Fair Conduct Act (IFCA) (MKB Constructors v. American Zurich Insurance Company, No. 15-35291, 9th Cir., 2017 U.S. App. LEXIS 18226).

  • September 25, 2017

    Federal Judge: Insurer’s Negligence Claim Survives Economic-Loss Doctrine

    CHICAGO — An insurer sufficiently alleged sufficient facts to meet a sudden or dangerous occurrence exception to the economic-loss doctrine, an Illinois federal judge ruled Sept. 18, denying a subcontractor’s motion to dismiss the insurer’s negligence claim (The Travelers Indemnity Company of America v. Shawmut Woodworking & Supply Inc., et al., No. 17-1771, N.D. Ill., 2017 U.S. Dist. LEXIS 151800).

  • September 22, 2017

    Judge: Homeowners’ Claims Against Insurer Are Barred By Tract Housing Exclusion

    TACOMA, Wash. — A Washington federal judge on Sept. 19 granted a motion for summary judgment filed by an insurer in an insurance coverage suit brought by homeowners claiming faulty construction, finding that a tract housing exclusion applies (Maureen Hay, et al. v. American Safety Indemnity Company, No. 17-5077, W.D. Wash., 2017 U.S. Dist. LEXIS 152115).

  • September 21, 2017

    Judge Bifurcates Pipe Company’s Counterclaims Against Insurers, Denies Stay

    SEATTLE — A federal judge in Washington on Sept. 20 agreed to bifurcate the proceedings in a declaratory judgment suit brought by two insurers against a pipe company, finding that the defendant company’s extracontractual counterclaims against the insurance companies can proceed to trial and that the declaratory judgment suit can move forward only if an underlying suit determines if the pipe company can face claims brought by a water district (Travelers Property Casualty Company of America, et al. v. Northwest Pipe Company, et al., No. C17-5098 BHS, W.D. Wash., 2017 U.S. Dist. LEXIS 153329).

  • September 21, 2017

    Subcontractor’s Insurer To Pay $2M In Defense Costs To Contractor And Its Insurer

    CHARLOTTE, N.C. — A North Carolina federal judge on Sept. 18 ordered a subcontractor’s insurer to pay $1,586,473.43 plus prejudgment interest to a contractor’s insurer and $450,113.47 plus prejudgment interest to the contractor as reimbursement for the defense costs they incurred in an underlying negligence lawsuit against the subcontractor (Mitsui Sumitomo Insurance Company of America, et al. v. Travelers Property Casualty Company of America, No. 15-00207, W.D. N.C., 2017 U.S. Dist. LEXIS 150994).

  • September 20, 2017

    Policies Bar Coverage For Additional Insured’s Defects, California Federal Judge Says

    SAN DIEGO — Commercial general liability insurance policies’ business risk exclusions preclude coverage for construction defects alleged by homeowners against an additional insured contractor, a California federal judge ruled Sept. 13 (Pulte Home Corp. v. American Safety Indemnity Co., No. 16-02567, S.D. Calif., 2017 U.S. Dist. LEXIS 148653).

  • September 15, 2017

    Judge Says Insurer Had No Duty To Defend Contractors In Defective Concrete Suit

    BALTIMORE — A Maryland federal judge on Aug. 4 found that insurers had no duty to defend contractors in an underlying construction defects lawsuit, but deferred his ruling on whether the insurer has a duty to indemnify the contractors under commercial general liability and umbrella liability policies (Depositors Insurance Company, et al. v. Zurich American Insurance Company, et al., No. 16-1018, D. Md., 2017 U.S. Dist. LEXIS 123923).

  • September 15, 2017

    Issue Of Fact Exists As To Whether Water, Mold Damage Occurred Within Policy Periods

    TRENTON, N.J. — The Appellate Division of the New Jersey Superior Court on Sept. 11 vacated a portion of a trial court’s ruling after determining that the evidence creates a question of fact as to whether water and mold damage caused by the faulty installation of doors and windows occurred during the applicable policy periods (Selective Insurance Company of America v. TRH Builders Inc., et al., No. A-1015-15T3, N.J. Super., App. Div., 2017 N.J. Super. Unpub. LEXIS 2265).

  • September 12, 2017

    Judge Dismisses Defect Coverage Dispute For Lack Of Jurisdiction

    LAS VEGAS — An insured contractor failed to adequately allege complete diversity between itself and the relevant names of an insurance syndicate, a Nevada federal judge ruled Sept. 11, dismissing the dispute over coverage for an underlying construction defect case (Centex Homes v. Navigators Specialty Insurance Co., No. 16-01958, D. Nev., 2017 U.S. Dist. LEXIS 146824).

  • September 8, 2017

    Claims Constitute ‘Property Damage’ Under CGL Policy, Insured Argues To 8th Circuit

    ST. LOUIS — For the second time, an insured has asked the Eighth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling in favor of a commercial general liability insurer in a coverage dispute arising from the contamination of landscaping materials with plastic from defective storage bags that were manufactured by the insured (Decker Plastics v. West Bend Mutual Insurance Co., No.17-1319, 8th Cir.).