Mealey's Construction Defects Insurance

  • July 26, 2021

    Subcontractor That Settled Without Insurer’s Consent Awarded $2.5 Million

    PORTLAND, Ore. — A construction subcontractor that entered into a settlement agreement with a general contractor after its insurance company refused to settle was granted summary judgment in its lawsuit against its insurer and awarded $2.5 million, the amount of its stipulated judgment, by a federal judge in Oregon who on July 6 adopted a magistrate judge’s report and recommendation.

  • July 26, 2021

    Insurer Has No Duty To Pay Consent Judgment Against Contractor, Federal Judge Rules

    BIRMINGHAM, Ala. — Giving preclusive effect to a judge’s factual finding in an insurer’s declaratory judgment lawsuit that damage to a plaintiff’s home did not “manifest” during an insurance policy period, a federal judge in Alabama on July 20 held that the plaintiff cannot recover a consent judgment obtained against a contractor in his direct action lawsuit against the insurer.

  • July 23, 2021

    N.J. High Court To Review Arbitration Provision In Subcontractors’ Insurance Policy

    TRENTON, N.J. — The New Jersey Supreme Court on July 16 agreed to review a March ruling reinstating a condominium owners association’s declaratory judgment suit against the surplus lines insurer of two insolvent subcontractors, granting certification to determine whether the direct action statute applies and whether the association is “bound by the mandatory arbitration provision in the underlying insurance contract.”

  • July 16, 2021

    Partial Summary Judgment Mostly Denied In Homebuilders’ Insurance Defense Suit

    PHOENIX — Otherwise denying four motions for partial summary judgment on homebuilders’ claims against an insurer over the defense in 17 underlying construction defects lawsuits, a federal judge in Arizona on July 9 ruled that the insurer breached its duty to defend in one case by accepting only part of a homebuilder’s defense burden, granting partial summary judgment for the homebuilder as to that issue and for the insurer on claims of violating Nevada’s Unfair Insurance Practices Act and on whether it provided a conflict-free defense.

  • July 16, 2021

    Negligence Claim Against Broker Is Ripe For Adjudication, Federal Judge Rules  

    WASHINGTON, D.C. — A federal judge in the District of Columbia on July 13 denied an insurance broker’s motion to dismiss an insured’s negligence claim arising from insurers’ denial of coverage for alleged structural damage to the insured’s newly built facility, finding that the insured’s purported harm due to the insurers’ coverage denial renders its claim against the broker as ripe as its claims against the insurer.

  • July 15, 2021

    Contractor Being Sued After Farm Building Collapse, Insurer Prepare For 2022 Trial

    FORT WAYNE, Ind. — The parties in a case in which an insurer is seeking more than $2 million in damages from a contractor after a 9,000-head swine building collapsed anticipate being ready for a settlement conference in January 2022 and, if that and mediation are not successful, a jury trial in November 2022, both sides stated in a July 14 report filed in a federal court in Indiana.

  • July 14, 2021

    Federal Judge Blocks Portion Of New Florida Property Insurance Law

    TALLAHASSEE, Fla. — A portion of a new Florida property insurance law that bans “written or electronic communication that encourages, induces or instructs someone to contact a contractor or public adjuster for the purpose of filing an insurance claim for roof damage” violates First Amendment rights, a federal judge in Florida ruled July 11 in granting a preliminary injunction that prohibits the secretary of the Florida Department of Business and Professional Regulation from enforcing the law as it pertains to “prohibited advertisements.”

  • July 12, 2021

    Building Owner Accuses Insurer Of ‘Deflection’ In Coverage Suit Over Collapse

    RICHMOND, Va. — An apartment building owner insured argues in a July 6 reply brief to the Fourth Circuit U.S. Court of Appeals that the collapse of its building’s superstructure was caused by the defective design and construction of the foundation and is a covered ensuing loss under an insurance policy.

  • July 09, 2021

    Federal Judge: Under Allegations, Insurer Has Duty To Defend Contractor

    LOS ANGELES — Allegations of construction defects, mismanagement of subcontractors and water damage caused by failure to properly secure a building in advance of a hurricane are sufficient in regard to a substantially completed garage for an insurer to have a duty to defend a general contractor, a federal judge in California ruled July 1, granting partial summary judgment in the contractor’s favor on a breach of contract claim.

  • July 02, 2021

    Judge: Construction Delays, Project Damages Fall Squarely Under Flood Exclusion

    SANTA ANA, Calif. — A federal judge in California on June 29 granted an insurer’s motion to dismiss with prejudice a breach of contract and bad faith lawsuit seeking builders risk coverage for damages caused by continuous rainfall at a jobsite, finding that the policy’s flood exclusion barred coverage.

  • June 30, 2021

    Self-Insured Retention Terms Disputed In Bridge Collapse Coverage Suits

    WEST PALM BEACH, Fla. — In a pair of response briefs filed June 28 in Florida federal court, a steel manufacturer and its insurer argue over terms related to a self-insured retention (SIR) endorsement in the insured’s commercial general liability policies, which were used in the defense and settlement of three lawsuits over a 2018 pedestrian bridge collapse at Florida International University.

  • June 30, 2021

    Lengthy Notice Delay Negated Coverage In Pond Repair Suit, Judge Rules

    MACON, Ga. — An insured’s failure to offer “any reasonable excuse or justification” for a 15-month delay in informing its commercial general liability insurer about a lawsuit against it over a botched construction job constituted a failure to comply with its policy’s notice requirements, a Georgia federal judge ruled June 9, granting the insurer’s motion for summary judgment and declaring that it has no duty to indemnify nor defend the insured in an underlying lawsuit.

  • June 29, 2021

    N.Y. Justice Dismisses Insurer’s Subrogation Suit, Cross- Claims Against Contractor

    NEW YORK — A New York justice on June 10 dismissed an insurer’s third amended complaint and cross-claims against a general contractor in the insurer’s subrogation lawsuit seeking to recover payments it made to its insured for property damage caused by a frozen water pipe that burst, finding that the insurance policy does not preclude the contractor and the insured’s anti-subrogation agreement.

  • June 29, 2021

    Judge:  ‘Single Claim’ Policy Language Defeats Contractor’s Coverage Suit

    DETROIT — A county commission’s claims against a contractor for faulty construction design work for a water runoff drainage project are part of a “single claim” that was made outside of a claims-made insurance policy’s coverage period, so the insurer is entitled to summary judgment in the contractor’s coverage lawsuit, a Michigan federal judge ruled June 23.

  • June 29, 2021

    Oral Arguments Set On Whether Exception To 8-Corner Rule Applies Under Texas Law

    AUSTIN, Texas — The Texas Supreme Court will hear oral arguments on Sept. 14 about whether an exception to the eight-corner rule is applicable under Texas law for determining whether an insurer has a duty to defend an insured accused of lodging a drill bit into a bore hole for a commercial irrigation well, according to a June 25 docket entry.

  • June 28, 2021

    Attorney: Judgment Was Not ‘Collectable’ Under Insolvent Insurer’s CGL Policy

    LOS ANGELES — A law firm and its attorney who were sued for professional negligence tell a California appeals court in a May 26 brief that an underlying $3.5 million default judgment against a contractor was not “collectable” under a commercial general liability insurance policy even if the insurer had not gone into receivership, seeking affirmance of a lower court’s ruling in their favor arising from clients’ claims that they would have been able to collect a $2 million judgment against the insurer but for the law firm and attorney’s lack of due diligence in obtaining the default judgment against the contractor.

  • June 28, 2021

    Alabama Federal Judge Denies Motion To Dismiss Insurer’s Duty To Defend Suit

    MOBILE, Ala. — Declining to adopt a magistrate judge’s report and recommendation of abstention, a federal judge in Alabama on June 1 denied a contractor’s motion to dismiss an insurer’s suit seeking a declaration that it has no duty to defend or indemnify the contractor in a state court case alleging defective deck work at a conference center; the state case is not parallel but related to the instant federal case, the judge found.

  • June 28, 2021

    Federal Judge Orders Defense Costs Split In Additional Insured Case

    SAN FRANCISCO — A general contractor’s insurer “cannot shift onto a subcontractor the burden to provide a complete defense for a suit including claims against only a general contractor,” a federal judge in California ruled June 9, granting summary judgment in a dispute over interpretation of an additional insured endorsement and excess provisions in favor of the subcontractor’s insurer and ordering each of the insurers to provide half of the defense costs in the underlying case.

  • June 28, 2021

    Federal Judge Finds No Fraudulent Joinder, Remands Builders’ Bad Faith Action

    LOS ANGELES — Ruling that the high burden of proving fraudulent joinder was not met, a federal judge in California on June 10 remanded to state court four homebuilders’ suit against an insurer and related parties concerning more than $10 million that the builders allege they were overcharged for self-insurance retention (SIR) payments made as part of homebuilder protection (HBP) policies.

  • June 20, 2021

    Breach Of Contract, Not Bad Faith Claim, To Proceed In Water Damage Dispute

    FAYETTEVILLE, Ark. — A breach of contract claim, but not a bad faith claim, can proceed against a homeowners insurer that denied coverage for a water damage claim based on the policy’s construction defects exclusion because the insureds sufficiently stated facts in support of the breach of contract claim only, an Arkansas federal judge said June 14 in partially granting the insurer’s motion for summary judgment.