Mealey's Construction Defects Insurance

  • April 03, 2020

    Travelers Awarded Judgment As Another Insurer Found Liable For Defects Dispute

    PHOENIX — An Arizona federal judge on April 1 granted partial summary judgment to The Travelers Indemnity Co. after finding that another insurer had a duty to defend a construction defect lawsuit filed by 81 homeowners against a general contractor (The Travelers Indemnity Co. v. Westfield Insurance Co., No. 19-03682, D. Ariz., 2020 U.S. Dist. LEXIS 56982).

  • April 02, 2020

    Insurer’s Duty Is Not Excused By Professional Services Exclusion

    CHICAGO — A professional services exclusion does not relieve an insurer of its duty to defend allegations that an insured’s excavation work on ultraviolet disinfection facilities caused the collapse of an embankment supporting tracks for a line on the Chicago Transit Authority (CTA), an Illinois federal judge ruled March 27 (Collins Engineers, Inc. v. Travelers Property Casualty Company of America, No. 19-1203, N.D. Ill., 2020 U.S. Dist. LEXIS 53469).

  • April 02, 2020

    Insurer Has No Duty To Defend, 1st Circuit Panel Says In Affirming

    BOSTON — The First Circuit U.S. Court of Appeals on April 1 affirmed a district court’s ruling in favor of a commercial general liability insurer, agreeing with the lower court that the insurer has no duty to defend its insured apartment management company against an underlying suit arising  out of water and mold damage (Clarendon National Insurance Company v. Philadelphia Indemnity Insurance Company, No. 19-1212, 1st Cir., 2020 U.S. App. LEXIS 10257).

  • March 19, 2020

    COMMENTARY: Construction Defect Claims: A 2019 Update Part II

    By Thomas F. Segalla, Michael T. Glascott, Ashlyn M. Capote, Adam R. Durst and Jason E. Rusche

  • April 01, 2020

    Reinsurer:  11th Circuit Should Not Hear Appeal Over Arbitration Ruling

    ATLANTA — A reinsurer argues in a March 26 reply brief that the 11th Circuit U.S. Court of Appeals has no jurisdiction over insurers’ appeal of a “non-final” order to arbitrate their dispute for alleged bad faith refusal to pay their reinsurance claim regarding a construction defects case settlement (Builders Insurance, et al. v. Fletcher Reinsurance Co., No. 20-10969, 11th Cir.).

  • March 31, 2020

    Attorney Fees Denied To Insureds After Dismissal Of Defects Coverage Dispute

    JACKSONVILLE, Fla. — Citing insureds’ successful argument of lack of subject matter jurisdiction over an insurer’s coverage lawsuit for a construction defects claim, a federal judge in Florida on March 25 denied the insureds’ request for attorney fees under state law due to that same lack of jurisdiction but granted costs under federal law (Southern-Owners Insurance Co. v. Maronda Homes Inc. of Florida, et al., No. 18-1305, M.D. Fla., 2020 U.S. Dist. LEXIS 51608).

  • March 27, 2020

    Builder’s Failure To Notify, Cooperate Precludes Coverage, Insurer Says In Complaint

    DAYTON, Ohio — In a declaratory complaint filed March 24 in Ohio federal court, an insurance provider argues that no coverage is owed to a construction company in a state court dispute over purported defects in the construction of a home addition due to the policyholder’s failure to comply with the policy’s cooperation and notification requirements, as well as applicable policy exclusions (United Ohio Insurance Co. v. Travis Henderson Construction LLC, et al., No. 3:20-cv-00119, S.D. Ohio).

  • March 26, 2020

    Insurer Pursues Recovery Of Costs Tied To Defective Work By Subcontractors

    BATON ROUGE, La. — A commercial excess liability insurer seeks recovery of payments to a general contractor linked to subcontractors’ defective work that caused property damage on an apartment complex project in a March 23 complaint filed in a Louisiana federal court (Endurance American Insurance Co. v. ABG Caulking Contractors, Inc., et al., No. 20-174, M.D. La.).

  • March 26, 2020

    ​​​​​​​Judge Stays Insurance Dispute Over Defective Designs In Courthouse

    SAN JOSE, Calif. — RLI Insurance Co.’s coverage dispute against an insurer and an architecture firm was stayed March 20 by a California federal judge pending resolution of a lawsuit against the firm over alleged defective designs in a courthouse project (RLI Insurance Co. v. ACE American Insurance Co., et al., No. 19-04180, N.D. Calif., 2020 U.S. Dist. LEXIS 50004).

  • March 25, 2020

    5th Circuit Finds Subrogation Waiver Applies To Property Damage From Fire

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on March 9 reversed a federal judge’s ruling that a waiver of subrogation did not apply to damages to nonwork property that resulted from a fire that occurred while window restoration work was being done at a building after pointing out that the Mississippi Supreme Court decided Feb. 20 that the subrogation waiver was applicable (Liberty Mutual Fire Insurance Co., as subrogee of Chickasaw County School District v. Fowlkes Plumbing LLC, No. 18-60608, 5th Cir., 2020 U.S. App. LEXIS 7427).

  • March 25, 2020

    Insurer: Court Erred When It Ruled Declaratory Judgment Claim Was Not Ripe

    DENVER — An insurer recently filed an appeal brief in the 10th Circuit U.S. Court of Appeals contending that a district court erred when it ruled that the insurer’s claim for declaratory judgment in a coverage action pertaining to an underlying lawsuit is not ripe (Auto-Owners Insurance Co. v. Bolt Factory Loft Owners Association Inc., et al., No. 19-1233, 10th Cir.).

  • March 20, 2020

    Earth Exclusion Precludes Coverage For $632,180.81 Lawsuit, Insurer Says

    BROOKLYN, N.Y. — A lawsuit against two New York excavation and drilling companies for damages of $632,180.81 is not covered, a commercial general liability insurer says in a March 19 complaint filed in New York federal court, because an earth or land movement exclusion applies (Scottsdale Insurance Co. v. East Coast Drilling NY Inc., et al., No. 20-01462, E.D. N.Y.).

  • March 19, 2020

    Insurer:  No Coverage For $3M Case Over Insured’s Defects In Seminary Project

    LYNCHBURG, Va. — A $3 million breach of contract case over alleged defects in a seminary is not covered, an insurer argues in a March 17 complaint in a Virginia federal court, because there is no property damage caused by an “occurrence” and several business risk exclusions apply (Builders Mutual Insurance Co. v. R. F. Howerton, Inc., No. 20-00010, W.D. Va.).

  • March 19, 2020

    Insurer’s Coverage Action Over Foundation’s ‘Unfit Condition’ Dismissed

    LONDON, Ky. — A Kentucky federal judge on March 17 dismissed an insurer’s coverage case over an insured’s work because deciding whether the insured’s actions constitute an “occurrence” or an “intentional act” requires fact finding on fortuity and intentionality issues (Auto Owners Insurance Co. v. Trip Cat, LLC, et al., No. 19-115, E.D. Ky., 2020 U.S. Dist. LEXIS 45993).

  • March 17, 2020

    Insurers Say Subsidence Exclusion Relieves Them From Defending Subcontractor

    AUSTIN, Texas — Two insurers who provided policies to a subcontractor say in a declaratory judgment action filed in federal court in Texas March 13 that the have no duty to defend or indemnify the insured because claims in an arbitration proceeding fall within the subsidence exclusion in the policies (Depositors Insurance Co., et al. v. Angell Services LLC, et al., No. 20-cv-00271, W.D. Texas).

  • March 16, 2020

    Insurer Owes Equitable Contribution For Defect Coverage, 9th Circuit Says

    SAN FRANCISCO — Liberty Surplus Insurance Corp. owes equitable contribution to another insurer’s defense of their mutual insured in a construction defect case, the Ninth Circuit U.S. Court of Appeals held March 12, finding that the insured’s suspended corporate status did not modify or excuse Liberty’s duty to defend (Travelers Property Casualty Company of America v. Liberty Surplus Insurance Corp., No. 18-15956, 9th Cir., 2020 U.S. App. LEXIS 7847).

  • March 13, 2020

    Panel:  Breach Of Contract Exclusion Relieves Insurer Of Duties Toward Defects Claims

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals ruled March 11 that a breach of contract exclusion precludes a commercial general liability insurer’s duty to defend or indemnify an underlying construction defects action despite a general contractor arguing that coverage exists based on the subcontractor exception to the “your work” exclusion (Mt. Hawley Insurance Co. v. Huser Construction Company, Inc., No. 19-20368, 5th Cir., 2020 U.S. App. LEXIS 7875).

  • February 21, 2020

    COMMENTARY: Construction Defect Claims: A 2019 Update Part I

    By Thomas F. Segalla, Michael T. Glascott, Ashlyn M. Capote, Adam R. Durst and Jason E. Rusche

  • March 11, 2020

    Insurers Appeal To 11th Circuit Arbitration Order In Reinsurance Dispute

    ATLANTA — Insurers on March 9 gave notice that they are appealing to the 11th Circuit U.S. Court of Appeals a decision compelling them to arbitrate a claim against a reinsurer for alleged bad faith refusal to pay their reinsurance claim regarding a construction defects case settlement (Builders Insurance, et al. v. Maiden Reinsurance North America, Inc., No. 19-02762, N.D. Ga.).

  • March 05, 2020

    Judge: Nonconforming Soils Constitute ‘Defective Materials’ Under Policy Exclusion

    OAKLAND, Calif. — A federal judge in California on March 3 held that nonconforming soils used by a general contractor insured to fill levees in a flood construction project constitute “defective materials” under a builders’ risk insurance policy's “cost of making good” exclusion, further finding that the definition of “professional loss” under a professional liability insurance policy excluded the insured’s claimed loss (Brosamer & Wall, Inc. v. Indian Harbor Insurance Company, No. 19-872, N.D. Calif., 2020 U.S. Dist. LEXIS 37589).