Mealey's Construction Defects Insurance

  • October 17, 2019

    Defective Workmanship Does Not Constitute An Occurrence, Judge Says

    PHILADELPHIA — A Pennsylvania federal judge on Oct. 15 granted a commercial general liability insurer’s motion for summary judgment after determining that the insurer has no duty to defend its insured subcontractor or an alleged additional insured contractor against a claim arising out of water and mold damages caused by the defective installation of air conditioning units by the subcontractor because defective workmanship does not constitute an occurrence under the policy (Utica Mutual Insurance Co. v. Voegele Mechanical Inc, et al., No. 18-3959, E.D. Pa., 2019 U.S. Dist. LEXIS 178038).

  • October 14, 2019

    3rd Circuit:  Subcontractor Knowingly Waived Claims Against Contractor, Sureties

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Oct. 11 affirmed dismissal of a subcontractor’s claims against a contractor and its sureties in a dispute over a delayed construction project because the subcontractor knowingly and voluntarily waived its claims under releases and change orders and the contractor did not relinquish its right to enforce the release language in those agreements (Connelly Construction Corp. v. Travelers Casualty and Surety Company of America, et al., No. 18-3631, 3rd Cir., 2019 U.S. App. LEXIS 30517).

  • October 11, 2019

    Insurer:  No Coverage Due To Insured’s Failure To Give Timely Notice

    NEWNAN, Ga. — A commercial general liability insurer says in its Oct. 9 complaint filed in a Georgia federal court that it has no duty to defend or indemnify an underlying negligent construction claim because its insured breached the policy by failing to provide timely notice (Owners Insurance Co. v. Roger Miles, et al., No. 19-00137, N.D. Ga.).

  • October 09, 2019

    Justice Find 3 Insurers Have No Duty To Defend, Indemnify Based Upon Policy Exclusions

    NEW YORK — A New York justice on Oct. 4 granted dismissal to three out of four commercial general liability insurers because exclusions for residential development, residential construction activities and breach of contract bar coverage for claims arising out of alleged defects in a residential condominium project (East 111 Associates LLC, et al. v. RLI Insurance Co., et al., No. 653890/2018, N.Y. Sup., New York Co., 2019 N.Y. Misc. LEXIS 5331).

  • October 09, 2019

    Insurers Granted Default Judgment In Coverage Case Over Defects In Condominiums

    NEW BERN, N.C. — A North Carolina federal judge on Oct. 7 granted default judgment to commercial liability insurers against their insured over coverage for a breach of contract claim in a dispute arising out of construction defects in condominiums (Penn National Security Insurance, et al. v. East Carolina Masonry, Inc., No. 19-53, E.D. N.C., 2019 U.S. Dist. LEXIS 173448).

  • October 09, 2019

    No Coverage Owed For 2 Construction Defect Actions, Insurer Argues To 3rd Circuit

    PHILADELPHIA — An insurer on Sept. 9 asked the Third Circuit U.S. Court of Appeals to reverse a federal court’s ruling that it has a duty to defend two construction defect actions, disputing the finding that there are sufficient allegations of products-related tort claims such that there may have been an “occurrence” (Nautilus Insurance Company v. 200 Christian Street Partners LLC, et al., Nos. 19-1507 and 19-1506, 3rd Cir.).

  • October 07, 2019

    Policy Is Void As Insureds Failed To Pay Per-Claim Deductibles, Judge Finds

    FRESNO, Calif. — A per-claim deductible provision applies on a per-claimant/per-home basis regarding 200 individual homeowners in five separate underlying construction defects cases, a federal judge in California ruled Oct. 3, finding that the insureds failed to pay the deductibles and, thus, the insurance policy is void (ProBuilders Specialty Insurance Company, RRG v. JKB Homes Norcal, Inc., et al., No. 15-01381, E.D. Calif., 2019 U.S. Dist. LEXIS 172322).

  • October 04, 2019

    Sinkhole Collapse Exception To Earth Movement Exclusion Does Not Trigger Coverage

    BALTIMORE — A federal judge in Maryland on Sept. 30 held that there is no genuine dispute of material fact that an insured’s collapse claim was not covered under an insurance policy, granting the insurer’s motion for summary judgment as to the insured’s breach of contract and promissory estoppel claims (Blissful Enterprises, Inc. v. Cincinnati Insurance Company, No. 18-1221, D. Md., 2019 U.S. Dist. LEXIS 169768).

  • September 27, 2019

    Extrinsic Evidence Sufficient For Insurer To Determine It Owed Duty To Defend

    NATCHEZ, Miss. — A Mississippi federal judge on Sept. 26 determined that an insurer had a duty to defend an insured for an underlying lawsuit arising out of the collapse of an insured building because there was sufficient extrinsic evidence available to the insurer that provided the insurer with notice that it may have a duty to defend the underlying lawsuit (Hudson Specialty Insurance Co. v. Talex Enterprises LLC, et al., No. 17-137, S.D. Miss., 2019 U.S. Dist. LEXIS 165000).

  • September 27, 2019

    Insurer Seeks Reimbursement For Insured’s Defense In Construction Defects Case

    SAN DIEGO — A primary insurer in a Sept. 25 complaint filed in a California federal court asserts a reimbursement claim against an insured for its defense in a construction defects case and asserts an equitable indemnity claim against an excess insurer (Liberty Mutual Fire Insurance Co. v. Bosa Development California II, Inc., et al., No. 19-1847, S.D. Calif.).

  • September 20, 2019

    Insurer Seeks Reimbursement Of Costs To Defend Claims Of Damages In High School

    SACRAMENTO, Calif. — A commercial general liability insurer filed a complaint on Sept. 18 in a California federal court for declaratory relief and reimbursement of its defense for an underlying action over damages to the construction of a high school (Travelers Property Casualty Company of America v. Greg Opinski Construction Inc., et al., No. 19-01308, E.D. Calif.).

  • September 19, 2019

    Water Damage Caused By Faulty Work Did Not Occur During Subcontractor’s Policy Period

    ROCHESTER, N.Y. — No coverage is afforded for water damages caused by the faulty installation of a sprinkler system by a subcontractor because the general contractor and its insurer failed to prove that the damages occurred during the applicable policy period of the subcontractor’s commercial general liability policy, a New York federal judge said Sept. 16 (Welliver McGuire Inc.  et al., v. ACE American Insurance Co., No. 17-6040, W.D. N.Y., 2019 U.S. Dist. LEXIS 159047).

  • September 18, 2019

    Judge Refuses To Dismiss Insurer’s Coverage Dispute Over Retaining Wall Damages

    WHEELING, W.Va. — A federal judge in West Virginia on Sept. 16 denied an insurer’s motion to dismiss an insured’s coverage dispute concerning two lawsuits alleging that the insured’s negligence caused damages to a retaining wall because the insured alleges sufficient facts to state a claim that the insurance contract was formed in West Virginia (Redstone International Inc. v. Liberty Mutual Fire Insurance Co., No. 18-175, N.D. W.Va., 2019 U.S. Dist. LEXIS 157577).

  • September 18, 2019

    3rd Circuit Vacates In Part Rulings Against Insured On Duty To Indemnify Defects

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Sept. 13 affirmed and vacated in part a ruling on eight insurers’ duty to indemnify because under Pennsylvania insurance law, a manufacturer’s recovery for the cost of settling a lawsuit alleging that its product was defective turns on the language of the specific insurance policies at issue (Sapa Extrusions Inc. v. Liberty Mutual Insurance Co., et al., No. 18-2206, 3rd Cir., 2019 U.S. App. LEXIS 27668).

  • September 17, 2019

    Judge Enters Judgment For Insurer On Breach Of Contract, But Not On Bad Faith

    CHARLESTON, S.C. — In a coverage dispute following settlement of a construction defects case, a South Carolina federal judge on Sept. 16 granted summary judgment to a commercial general liability insurer on an assignee’s breach of contract claim but denied judgment to the insurer on the bad faith claim (Summer Wood Property Owners Association Inc. v. Pennsylvania National Mutual Casualty Insurance Co., No. 17-3504, D. S.C., 2019 U.S. Dist. LEXIS 157353).

  • September 16, 2019

    Judge:  Contractual Liability Exclusion Relieves Insurer Of Duty Toward Defects

    CHICAGO — An insurer has no duty to defend or indemnify its insureds against a breach of contract case over defects in a refrigeration system, a federal judge in Illinois held Sept. 12, because several exclusions apply, including one for contractual liability (Hartford CasualtyInsuranceCo. v. Hench Control Corp., et al., No. 16-10794, N.D. Ill., 2019 U.S. Dist. LEXIS 155425).

  • September 11, 2019

    Excess Insurers’ Motions To Dismiss Denied In Formaldehyde Laminate Flooring Suit

    MADISON, Wis. — In two separate opinions issued Sept. 9, a Wisconsin state judge denied motions to dismiss filed by excess insurers in a suit regarding coverage for underlying claims arising out of toxic levels of formaldehyde in Lumber Liquidators Inc.’s laminate flooring after determining that a ruling on the applicability of the pollution exclusion in one of the excess insurer’s policies cannot be made at this stage of the litigation and after finding that the insured sufficiently alleged that a primary policy was exhausted by an underlying settlement (Lumber Liquidators Inc. v. American Guarantee & Liability Insurance Co., et al., No. 15-1089, Wis. Cir., Dane Co.).

  • September 10, 2019

    Insurer Has No Duty To Indemnify Parts Of Arbitration Award For Flood Damages

    BATON ROUGE, La. — An insurer has no duty to indemnify the parts of an arbitration award for $110,053.07 in damages to a residence and $17,975 in damages for backyard improvements, a federal judge in Louisiana ruled Sept. 6; however, the judge found that the insurer owes coverage for $18,008.47 in damages to the property within the residence (Atain Specialty Insurance Co. v. Siegen 7 Developments, LLC, et al., No. 18-00850, M.D. La., 2019 U.S. Dist. LEXIS 152525).

  • September 10, 2019

    Coverage May Exist For Water, Mold Damages Under Homeowners Policy, Judge Says

    TACOMA, Wash. — A Washington federal judge on Sept. 9 determined that no coverage is owed under one homeowners policy for an insured's water and mold damages caused by a leak in an exterior water pipe, but said coverage may be afforded under a second homeowners policy because a question of fact exists as to whether the damages were caused by a latent defect in the exterior water pipe (Vanessa Camper v. State Farm Fire and Casualty Co. et al., No.18-5486, W.D. Wash., 2019 U.S. Dist. LEXIS 153337).

  • September 09, 2019

    Insurers Have Duty To Defend 83 Construction Defect Cases, Judge Says

    JACKSONVILLE, Fla. — Two commercial general liability insurers have a joint duty to defend an additional insured against 83 underlying construction defect cases, a federal judge in Florida ruled Sept. 5 (KB Home Jacksonville LLC v. Liberty Mutual FireInsuranceCo., et al., No. 18-371, M.D. Fla., 2019 U.S. Dist. LEXIS 151235, 2019 U.S. Dist. LEXIS 151230).