SAN DIEGO — A California federal judge on June 16 denied a request filed by a group of development companies to substitute an insurer as a defendant in an action seeking coverage in an underlying construction defects case, finding that the substitution would not advance the litigation and refusing to remand the case (Toll CA, L.P., et al. v. American Safety Indemnity Company, et al., No. 16-cv-1523, S.D. Calif., 2017 U.S. Dist. LEXIS 94107).
SAN FRANCISCO — A Ninth Circuit U.S. Court of Appeals panel on June 16 overruled arguments from a general contractor that a jury was not properly instructed about certain exclusions included in a policy obtained from ProBuilders Specialty Insurance Co., finding that the contactor was reading the exclusions too narrowly (ProBuilders Specialty Insurance Company, RRG v. Valley Corp. B., et al., No. 14-17544, 9th Cir., 2017 U.S. App. LEXIS 10716).
AUSTIN, Texas — A judgment in an underlying construction defect lawsuit is not binding on an insurer because its insured builder did not have a sufficient financial stake in the outcome due to a pretrial agreement, the Texas Supreme Court ruled June 16, granting a new trial over whether the insurer must cover the construction defect claims (Great American Insurance Co., et al. v. Glen Hamel, et al., No. 14-1007, Texas Sup., 2017 Tex. LEXIS 553).
HOUSTON — A Texas federal judge on June 1 determined that an excess insurer is not liable to an insured for an underlying construction defects suit because the insured failed to prove that the excess insurer owed coverage under its policy (American Guarantee and Liability Insurance Co., et al. v. United States Fire Insurance Co., No. 15-1926, S.D. Texas, 2017 U.S. Dist. LEXIS 90150).
MORRISTOWN, N.J. — An insurer claims in a June 2 complaint filed in New Jersey state court that it is entitled to equitable contribution from another insurer because the other insurer improperly denied coverage to its insured for three construction defects lawsuits filed against the insured (Zurich American Insurance Co., as successor by merger to Assurance Company of America, et al. v. Crum & Forster Specialty Insurance Co., et al., No. L-1233-17, N.J. Super., Morris Co.).
MIAMI — A Florida federal judge on June 7 ordered a contractor and an insurer to file a joint stipulation of dismissal pursuant to a mediator’s report that the parties settled their claims related to an insured’s negligent performance of roofing work (Thornton Construction Co. Inc. v. Scottsdale Insurance Co., No. 16-22001, S.D. Fla., 2017 U.S. Dist. LEXIS 88192).
DENVER — A commercial general liability insurer has a duty to defend a contractor against claims of defective work on an airport hangar floor, a Colorado federal judge ruled June 12, also staying the case pending resolution of the underlying action (Auto-Owners Insurance Co. v. High Country Coatings Inc. and Zurich American Insurance Co., No. 16-03196, D. Colo., 2017 U.S. Dist. LEXIS 90127).
ATLANTA — An insurer who prevailed in a construction defects dispute cannot recover attorney fees because its joint settlement offer with homeowners was invalid and unenforceable, the 11th Circuit U.S. Court of Appeals affirmed June 7 (Joseph Bradfield and Patricia Bradfield v. Mid-Continent Casualty Co., No. 16-17385, 11th Cir., 2017 U.S. App. LEXIS 10094).
CONCORD, N.H. — A New Hampshire federal judge on June 6 granted a commercial general liability insurer’s motion for summary judgment in a subcontractor insured’s lawsuit seeking coverage for underlying claims that it performed surface preparation work negligently, in an unworkmanlike manner and not in accordance with job specifications (Fletch's Sandblasting and Painting, Inc. v. Colony Insurance Co., No. 15-490, D. N.H., 2017 U.S. Dist. LEXIS 86488).
BILLINGS, Mont. — A Montana federal judge on June 6 granted summary judgment in favor of a property owner, finding that issues of fact exist as to whether a contractor caused a furnace vent pipe to disconnect, resulting in water damage, but found that the damage was covered under a homeowners insurance policy (Landy C. Leep v. Trinity Universal Insurance Co., No. 16-57, D. Mont., 2017 U.S. Dist. LEXIS 86759).
AUSTIN, Texas — A Texas federal judge on June 2 denied a contractor’s motion to dismiss an insurer’s counterclaim for declaratory relief after determining that the counterclaim is not redundant of the insurer’s affirmative defense asserted in its answer to the complaint (Hunt Construction Group Inc. v. Cobb Mechanical Contractors Inc. et al., No. 17-215, W.D. Texas).
CHICAGO — An Illinois federal judge on June 1 granted summary judgment and entered a default ruling in favor of an insurer, finding that it had no obligation to indemnify a construction company in an underlying lawsuit because it never received reasonable notice of the case or any claim under the terms of a general liability policy (Nautilus Insurance Co. v. JLL Construction Services, Inc., No. 15-cv-09297, N.D. Ill., 2017 U.S. Dist. LEXIS 83736).
MIAMI — A Florida federal judge on May 26 denied a motion to dismiss after determining that an insurer’s suit seeking a coverage declaration for an underlying suit arising out of its insured’s alleged defective roofing work presents an appropriate controversy to be decided by the federal court (Atain Specialty Insurance Co., v. Kenneth Russell Roof Contracting LLC, No. 16-23627, S.D. Fla., 2017 U.S. Dist. LEXIS 81960).
SEATTLE — A district court erred in allowing an insurer’s declaratory judgment claim to proceed after an underlying construction defects suit was settled because the insurer’s declaratory judgment claim became moot after the settlement, the Ninth Circuit U.S. Court of Appeals said May 24 in partially reversing the district court’s judgment (Century Surety Co., v. Belmont Seattle LLC, No. 14-36002, 9th Cir., 2017 U.S. App. LEXIS 9052).
TAMPA, Fla. — No coverage is owed for an underlying suit seeking damages as a result of water intrusion and other construction defects because coverage is barred for the underlying claims by exclusions for mold, pollution and impaired property, an insurer claims in a May 24 complaint filed against its insured in Florida federal court (Mid-Continent Casualty Co. v. Mobley Homes Florida LLC, No. 17-1232, M.D. Fla.).
GREENVILLE, S.C. — A federal judge in South Carolina on May 24 awarded summary judgment to State Farm Fire and Casualty Insurance Co., ruling that the professional liability exclusion does not require the insurer to provide coverage to a construction inspection company accused of negligence (State Farm Fire and Casualty Insurance Co. v. Morningstar Consultants, Inc., No. 16-01685-MGL, D. S.C., 2017 U.S. Dist. LEXIS 79371).
DENVER — An excess insurer has asked the 10th Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling in favor of a primary commercial general liability insurer in a dispute over coverage for an underlying $6.7 million settlement over construction defects claims against a ski area developer insured (Federal Insurance Co. v. National Union, No. 16-1438, 10th Cir.).
LAS VEGAS — A Nevada federal judge on May 19 dismissed an insurer’s breach of contract and declaratory relief counterclaims after determining that the insurer failed to allege facts in support of its assertion that an additional insured’s failure to cooperate with the insurer prejudiced the insurer’s ability to defend the additional insured in an underlying construction defects suit (Centex Homes v. Zurich Specialties London Limited, et al., No. 16-1278, D. Nev., 2017 U.S. Dist. LEXIS 77212).
SEATTLE — An insured has asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court’s ruling that an insurer is not liable for damage to apartments from hidden decay under its policies' "collapse" provisions (American Economy Insurance Co. v. CHL, LLC, No. 16-35606, 9th Cir.).
PHILADELPHIA — A Pennsylvania federal judge on May 18 denied a contractor’s motion for summary judgment after determining that an insurer’s proposed expert testimony on the causation of a fire presents a genuine dispute of material fact as to whether one of the contractors who worked in the home’s basement contributed to the cause of the fire (State Farm Fire & Casualty Co., as subrogee of the Estate of Alkis J. Marland v. Hartman Contractors, et al., No. 14-6535, E.D. Pa., 2017 U.S. Dist. LEXIS 75967).