Mealey's Construction Defects Insurance

  • December 4, 2017

    Connecticut Federal Judge: Cracks In Foundation Are Not Sudden And Accidental Loss

    BRIDGEPORT, Conn. — No coverage is owed to insureds seeking coverage for cracks discovered in their basement walls and caused by the presence of a mineral used in the concrete because the insureds’ loss was not sudden and accidental as required under the policy, a  Connecticut federal judge said Nov. 30 (Alan D. Lees, et al. v. Allstate Insurance Co., No. 15-1050, D. Conn., 2017 U.S. Dist. LEXIS 196728).

  • December 4, 2017

    Texas High Court Denies Rehearing On Insurers’ Liability For $2.4M Defects Award

    AUSTIN, Texas — The Texas Supreme Court on Dec. 1 refused to rehear petitions to review a lower court’s ruling that a trial court erred in finding two commercial general liability insurers are jointly and severally liable for a $2.4 million construction defects arbitration award despite both having a duty to indemnify (Great American Lloyds Insurance Co. and Mid-Continent Casualty Co. v. Vines-Herrin Custom LLC, et al., No. 16-0795, Texas Sup.; 2017 Tex. LEXIS 1089).

  • December 1, 2017

    Judge Denies Reconsideration On Finding That Policy Does Not Bar ‘Faulty Construction’

    SEATTLE — Noting that exclusionary clauses are to be construed strictly against an insurer, a Washington federal judge on Nov. 28 declined to disturb his ruling granting in part summary judgment to an insured on the basis that an insurance policy does not exclude and, thus, covers the perils “faulty construction,” “faulty maintenance” and “wet or dry rot” (Westridge Townhomes Owners Association v. Great American Assurance Co., et al., No. 16-1011, W.D. Wash., 2017 U.S. Dist. LEXIS 195341).

  • November 28, 2017

    No Coverage Owed For Mold Contamination Caused By Faulty Workmanship

    CONCORD, N.H. — An insurer owes no coverage to its insureds for a loss-of-use claim arising out of mold contamination because the mold contamination was caused by faulty workmanship, an excluded cause of loss under the policy’s mold endorsement, the New Hampshire Supreme Court said Nov. 15 (Michelle Russell, et al. v. NGM Insurance Co., No. 2016-054, N.H. Sup., 2017 N.H. LEXIS 218).

  • November 22, 2017

    Faulty Work Claims Against Insured Are Not Covered, Georgia Federal Judge Says

    ATLANTA — A homeowner’s negligence claims arising out of an insured contractor’s faulty workmanship are not covered under a commercial general liability insurance policy, a Georgia federal judge ruled Nov. 17, granting summary judgment to an insurer (Allstate Insurance Co. v. Adrianna Luu, et al., No. 17-312, N.D. Ga., 2017 U.S. Dist. LEXIS 190983).

  • November 21, 2017

    Insurer Must Cover Damage By Wind, Not Construction Defects, Appeals Panel Says

    DETROIT — An insurer is responsible to cover damage from wind-driven rain to condominium units but is not responsible for damage caused by construction defects, a Michigan appeals panel held Nov. 16, reversing summary disposition to the insurer (Walters Beach Condominium Association v. Home-Owners Insurance Co., No. 335172, Mich. App., 2017 Mich. App. LEXIS 1810).

  • November 20, 2017

    Washington Federal Judge Says Questions Of Fact Exist In Water Damages Suit

    SEATTLE — A Washington federal judge on Nov. 16 determined that questions of material fact exist regarding the application of an insurer’s exclusions for deterioration and rot to an insured condominium association’s claim for water intrusion damages that occurred over time to the exterior cladding of two of the association’s buildings (Sunwood Condominium Association v. Travelers Casualty Insurance Company of America, et al., No. 16-1012, W.D. Wash., 2017 U.S. Dist. LEXIS 189892).

  • November 17, 2017

    Known Defects Relieve Insurer Of Duty To Pay For Repairs, Panel Finds

    LOS ANGELES — A homeowner “who is aware, long before a rainstorm occurs and causes damage, of possible leakage” caused by construction defects cannot reasonably expect an insurer to pay for repairs on the theory that rainwater, and not the defects, caused the damage, a California appeals panel affirmed Nov. 14 (Simon Cohen, et al. v. Pacific Specialty Insurance Co., No. B276060, Calif. App., 2nd Dist., Div. 8, 2017 Cal. App. Unpub. LEXIS 7779).

  • November 17, 2017

    Panel Reverses Summary Judgment On Insurer’s Duty To Defend Defect Claims

    SAN DIEGO — A California appeals panel on Nov. 14 reversed an entry of summary judgment to an insurer on its duty to defend construction defect claims under subcontractors’ policies but affirmed summary judgment to a second insurer, finding that it has no duty to defend (McMillin Management Services L.P., et al. v. Financial Pacific Insurance Co., et al., No. D069814, Calif. App., 4th Dist., Div. 1, 2017 Cal. App. LEXIS 1000).

  • November 15, 2017

    Magistrate Judge Denies Deadline Extension In Defects Insurance Coverage Dispute

    ORLANDO, Fla. — In an insurance coverage dispute over construction defects, a Florida federal magistrate judge on Nov. 13 denied a developer’s request for an extension of deadline on the serving of expert disclosures (WaterMark Construction L.P. v. Southern-Owners Insurance Co., et al., No. 17-1814, M.D. Fla., 2017 U.S. Dist. LEXIS 186765).

  • November 13, 2017

    Judge: Policy Does Not Exclude Contractors’ Work As Home Builder, Not Roofer

    OKLAHOMA CITY — An insurance company must provide coverage for two contractors under two commercial general liability policies because the language in the policies does not exclude coverage for their work as home builders rather than as roofers, a federal judge in Oklahoma ruled Nov. 9 in denying the insurer’s motion for summary judgment (James River Insurance Company v. 5 Star Integrity Roofing & Exteriors, LLC, et al., No. CIV-16-950-M, W.D. Okla., 2017 U.S. Dist. LEXIS 185945).

  • November 10, 2017

    S.D. High Court: Professional Services Exclusion Bars Coverage For Surveying Error

    PIERRE, S.D. — A designated professional services endorsement excludes all potential insurance coverage for any property damage caused by a land-surveying error, the South Dakota Supreme Court ruled Nov. 8, finding that a trial judge erred in granting summary judgment to a project architect (Western National Mutual Insurance Co. v. TSP Inc., No. 27798, S.D. Sup.).

  • November 8, 2017

    Federal Judge Says Assertion Of Reservation Of Rights Is Not Affirmative Defense

    MIAMI — A Florida federal judge on Nov. 7 partially granted an insured’s motion to strike its insurer’s affirmative defenses as they pertained to the insurer’s reservation of rights because the assertion of a reservation of rights is not an affirmative defense (Kapow of Boca Raton Inc. et al. v. Aspen Specialty Insurance Co., No. 17-80972, S.D. Fla., 2017 U.S. Dist. LEXIS 184224).

  • November 7, 2017

    Insurer Fails To Establish 3rd Party Is Subject To Personal Jurisdiction, Judge Says

    OAKLAND, Calif. — A California federal judge on Nov. 3 granted a material supplier’s insurer’s motion to dismiss a third-party complaint brought by another insurer seeking contribution for underlying defenses costs in a construction defects lawsuit (Webcor Construction, LP, et al. vs. Zurich American Insurance Co., et al., No. 17-02220, N.D. Calif., 2017 U.S. Dist. LEXIS 182928).

  • November 7, 2017

    Indiana Appeals Court Finds Contracts Waived Insurer’s Right To Subrogation

    INDIANAPOLIS — An Indiana appeals court panel on Oct. 31 reversed a trial court judge’s ruling denying a motion for summary judgment, finding that an insurance company suing the contractors to recover the amount it paid to cover a school district’s property damage claim waived its right to subrogation (Performance Services, Inc. v. Hanover Insurance Company, No. 19A01-1607-CT-1743, Ind. App., 2017 Ind. App. LEXIS 582).

  • November 6, 2017

    Fungi, Bacteria Exclusion Does Not Bar Insured’s Defects, Panel Concludes

    ELGIN, Ill. — A fungi and bacteria exclusion does not apply to preclude otherwise covered property damage from construction defects, an Illinois appeals panel affirmed Nov. 2, finding that an insurer had a duty to defend an underlying action (Pekin Insurance Co. v. JB Architecture Group Inc., et al., No. 15-MR-1755, Ill. App., 2nd Dist., 2017 Ill. App. Unpub. LEXIS 2236).

  • November 3, 2017

    Insurer Proves No Duty To Defend Absent ‘Suit,’ But Duty To Indemnify Remains

    CHICAGO — Although the absence of a “suit” means that an insurer has no duty to defend a general contractor, an Illinois federal judge ruled Oct. 31 that the insurer failed to identify a limitation or exclusion that would preclude its duty to indemnify (Old Republic Insurance Co. v. Kenny Construction Co., No. 15-03524, N.D. Ill., 2017 U.S. Dist. LEXIS 180412).

  • November 2, 2017

    Judge Orders Insurer To Pay Its Contribution On Defense, Indemnity Of Defects Claims

    LAS VEGAS — Having found that a commercial general liability insurer has a duty to defend and indemnify insureds in 16 underlying construction defect lawsuits, a Nevada federal judge on Oct 12 ordered the insurer to pay $488,233 in contribution to defending insurers (Assurance Company of America, et al. v. Ironshore Specialty Insurance Co., No. 13-2191, D. Nev.; 2017 U.S. Dist. LEXIS 170453).

  • November 1, 2017

    Insurance Policy Does Not Bar ‘Faulty Construction,’ Federal Judge Concludes

    SEATTLE — An insurance policy does not exclude and, thus, covers the perils “faulty construction,” “faulty maintenance” and “wet or dry rot,” a Washington federal judge ruled Oct. 31, granting in part summary judgment to an insured (Westridge Townhomes Owners Association v. Great American Assurance Co., et al., No. 16-1011, W.D. Wash., 2017 U.S. Dist. LEXIS 180373).

  • November 1, 2017

    Judge Awards Summary Judgment To Insurer On Bad Faith Claim

    HUNTSVILLE, Ala. — A federal judge in Alabama on Oct. 25 awarded summary judgment to an insurer on a man’s cause of action for bad faith, holding that the company had a legitimate reason for denying his claim for wind and water damage because the leak occurred due to the deterioration of his roof (Roger Walker v. Auto-Owners Insurance Company, No. 16-cv-448-CLS, N.D. Ala., 2017 U.S. Dist. LEXIS 176703).