Mealey's Construction Defects Insurance

  • April 26, 2018

    Excess Insurer Has No Duty To Indemnify Chinese Drywall Claims, Judge Says

    MIAMI — In a coverage dispute over the installation of Chinese drywall, a subcontractor failed to establish that an excess insurer has a duty to indemnify it for its damages, a Florida federal judge ruled April 25, granting summary judgment to the excess insurer on claims for declaratory judgment, breach of contract and bad faith (Peninsula II Developers Inc., et al. v. Westchester Fire Insurance Co., No. 09-23691, S.D. Fla., 2018 U.S. Dist. LEXIS 69479).

  • April 25, 2018

    Texas High Court Stays Coverage Suit To Decide If Judge Abused His Discretion

    AUSTIN, Texas — The Texas Supreme Court on April 24 granted an insurer’s motion for temporary relief to stay a coverage lawsuit over the installation of defective heating ventilation and air conditioning units pending its ruling on the insurer’s petition for writ of mandamus seeking to clarify a party’s right to object to an assigned judge when the party first learns of the assignment the day of the first hearing or trial (In re Union Insurance Co., No. 18-0353, Texas Sup.).

  • April 23, 2018

    Insurers Fail To Show Number Of ‘Occurrences’ In Defects Dispute, Judge Says

    LAS VEGAS — A primary insurer and an excess insurer failed to demonstrate the number of proximate causes and the number of occurrences regarding coverage of a construction defects case against their mutual insured, a Nevada federal judge ruled April 18 (AIG Specialty Insurance Co. v. Liberty Mutual Fire Insurance Co., No. 17-01260, D. Nev., 2018 U.S. Dist. LEXIS 65198).

  • April 20, 2018

    Subrogation Waiver Bars Insurer’s Breach Of Contract, Negligence Claims, Panel Says

    BALTIMORE — A settlement agreement did not extinguish a waiver of subrogation provision in a prime contract, a Maryland appellate panel ruled April 17, finding no error in the entry of summary judgment to a contractor and subcontractors on a subrogated insurer’s negligence and breach of contract claims because the claims were barred by the subrogation waiver (National Surety Corp. v. K&C Framing Inc., et al., No. 1711, Md. Spec. App., 2018 Md. App. LEXIS 358).

  • April 19, 2018

    11th Circuit Vacates Ruling On Water Exclusion, Says District Court Erred

    ATLANTA — The 11th Circuit U.S. Court of Appeals on April 16 vacated a district court’s ruling that coverage is barred for water damage caused by a collapsed pipe after determining that the policy’s water exclusion does not apply to water damage caused by a failure within the property’s plumbing system (Ken Cameron and Michelle Cameron v. Scottsdale Insurance Co., No. 17-11907, 11th Cir., 2018 U.S. App. LEXIS 9800).

  • April 17, 2018

    Washington Federal Judge: Insured Failed To Comply With Policy’s Conditions

    SEATTLE — A commercial general liability insurer has no duty to defend and indemnify a general contractor in a breach of contract case because the insured failed to comply with policy conditions regarding obtaining certificates of insurance and hold-harmless agreements with subcontractors, a Washington federal judge ruled April 16 (Developers Surety and Indemnity Co. v. Alis Homes LLC, et al., No. 17-0707, W.D. Wash., 2018 U.S. Dist. LEXIS 63741).

  • April 12, 2018

    Federal Judge: Insureds’ Property Damage Occurred Prior To Policy Period

    MIAMI — An all-risk commercial property insurance policy does not provide coverage for property damage to a building that occurred gradually over an extended period, a Florida federal judge ruled April 10, noting that insureds knew of the gradual deterioration before the date they allege the collapse occurred (The S.O. Beach Corp., et al. v. Great American Insurance Company of New York, No. 17-22254, S.D. Fla., 2018 U.S. Dist. LEXIS 60235).

  • April 10, 2018

    Judge: Insurer Can’t Rely On Fraudulent Misjoinder In Removal Of Bad Faith Suit

    GREENVILLE, Miss. — An insurer may not rely on the doctrine of fraudulent misjoinder as a basis for removal jurisdiction, a federal judge in Mississippi ruled April 5 in remanding an insurance breach of contract and bad faith lawsuit to state court (Kenneth Strachan, et al. v. State Farm Fire and Casualty Co., et al., No. 17-0138, N.D. Miss., 2018 U.S. Dist. LEXIS 58226).

  • April 10, 2018

    Judge Rules On Insurer’s Duty To Defend, Indemnify Breach Of Contract Claims

    CHICAGO — An insurer has no duty to defend or indemnify an insured against a manufacturer’s breach of contract claims but has a duty to defend the insured against a city’s claims of property damage to a water treatment facility, an Illinois federal judge ruled April 6, noting that a default judgment awarded to the city falls within policy exclusions (Westfield Insurance Co. v. Maxim Construction Corp., et al., No. 15-9358, N.D. Ill., 2018 U.S. Dist. LEXIS 59400).

  • April 6, 2018

    Insurer Breached Duty To Defend, Acted In Bad Faith, Federal Judge Concludes

    SEATTLE — An insurer breached its duty to defend an additional insured in an underlying construction defects suit for failing to respond promptly to a tender of defense, a Washington federal judge ruled April 3, also finding that the insurer acted in bad faith (Rushforth Construction Co. v. Wesco Insurance Co., et al., No. 17-1063, W.D. Wash., 2018 U.S. Dist. LEXIS 56852).

  • April 4, 2018

    Insurer Has No Duty To Indemnify Arbitration Award, Federal Judge Says

    ST. LOUIS — An arbitration award issued against an insured contractor for its breach of contract does not constitute an “occurrence” under a commercial general liability insurance policy, a Missouri federal judge ruled March 29, finding that the insurer has no duty to indemnify (Depositors Insurance Co. v. NEU Construction Services Inc., et al., No. 17-00803, E.D. Mo., 2018 U.S. Dist. LEXIS 52925).

  • April 4, 2018

    Texas Federal Judge Agrees With Magistrate Judge On ‘Occurrence’ Finding

    HOUSTON — A Texas federal judge on March 30 adopted a magistrate judge’s recommendation that an insurer’s motion for summary judgment be denied because an underlying counterclaim filed against the insured contractor alleges an occurrence for which coverage under the policy is provided (Greystone Multi-Family Builders, Inc. v. Gemini Insurance Co., No. 17-921, S.D. Texas, 2018 U.S. Dist. LEXIS 55610).

  • April 4, 2018

    Insurer Had No Duty To Defend, Indemnify Faulty Work Claims, Judge Says

    PHILADELPHIA — An insurer did not have a duty to defend or indemnify an insured subcontractor for its faulty workmanship, a Pennsylvania federal judge ruled March 30, also finding that a bad faith counterclaim fails (State Farm Fire and Casualty Co. v. DTL Mechanical LLC, et al., No. 17-01224, E.D. Pa., 2018 U.S. Dist. LEXIS 54953).

  • April 2, 2018

    Judge Stays Insurer’s Duty-To-Indemnify Issue In Negligence Dispute

    SAVANNAH, Ga. — Although a Georgia federal judge declined to dismiss an insurance coverage case for alleged acts of negligence regarding a home renovation, the judge on March 29 stayed an insurer’s declaratory judgment claim on its duty to indemnify (Owners Insurance Co. v. The Remodeling Depot, et al., No. 17-021, S.D. Ga., 2018 U.S. Dist. LEXIS 54028).

  • March 30, 2018

    Insurer Did Not Breach Contract By Settling, Receiving Reinsurance Reimbursement

    NEW YORK — An insurer’s settlement of a flood damage claim arising out of construction work and its reimbursement under a captive reinsurance agreement did not breach its contract to insureds, a New York federal judge ruled March 29, dismissing the contract claim along with bad faith and declaratory relief claims (Keller Foundations LLC, et al. v. Zurich American Insurance Co., No. 16-6751, S.D. N.Y., 2018 U.S. Dist. LEXIS 53267).

  • March 29, 2018

    ‘Damage To Your Work’ Exclusion Does Not Bar Insurer’s Defense, Judge Says

    TAMPA, Fla. — A “damage to your work” exclusion does not preclude coverage for water damage because a condominium association alleges damage beyond an insured’s work, a Florida federal judge ruled March 28, denying summary judgment to an insurer (Owners Insurance Co., et al. v. Bobby T. Inc., et al., No. 16-3428, M.D. Fla., 2018 U.S. Dist. LEXIS 51901).

  • March 29, 2018

    Judge Adopts Recommendation To Award Summary Judgment To Framing Subcontractor

    BOSTON — A federal judge in Massachusetts on March 26 adopted a magistrate judge’s Feb. 2 report and recommendation suggesting that a framing subcontractor should be awarded summary judgment on its third-party claims for indemnification and duty to defend against another subcontractor (Philadelphia Indemnity Insurance Co. v. Consigli Construction Co. Inc., et al., No. 14-14687-MLW, D. Mass., 2018 U.S. Dist. LEXIS 49135).

  • March 28, 2018

    Magistrate Judge Recommends $159,876.20 Award To Insurer On Reimbursement Claim

    SACRAMENTO, Calif. — A California federal magistrate judge on March 26 recommended that an insurer be awarded $159,876.20 as damages for its equitable reimbursement claim after the insured failed to respond to a coverage dispute over costs incurred in the defense of an underlying negligent construction design lawsuit (The Travelers Indemnity Company of America v. SFA Design Group LLC, No. 16-1238, E.D. Calif., 2018 U.S. Dist. LEXIS 49702).

  • March 27, 2018

    Judge: Insurer’s Claim For $5M Defects Settlement Coverage Made Before Policy

    NEW YORK — In a dispute over coverage for a $5 million construction defects settlement, an insurer’s claim arises out of “wrongful acts” alleged in a demand letter made before the inception of a professional liability insurance policy, a New York federal judge ruled March 26 (Colony Insurance Co. v. AIG Specialty Insurance Co., No. 15-3896, S.D. N.Y.).

  • March 26, 2018

    Panel: Insured’s Failure To Choose Impartial Appraiser Compels Vacatur Of Award

    DENVER — The 10th Circuit U.S. Court of Appeals on March 23 found that a condominium association insured’s failure to select an impartial appraiser in a hailstorm coverage dispute compelled vacatur of the appraisal award under its insurance policy, affirming a lower federal court’s ruling in favor of the insurer (Auto-Owners Insurance Company v. Summit Park Townhome Association, No. 16-1352, 10th Cir., 2018 U.S. App. LEXIS 7334).