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Mealey's Construction Defects Insurance

  • April 8, 2019

    Subcontractor Insurers Have No Duty To Defend Faulty Work Claims, Judge Finds

    PENSACOLA, Fla. — Two subcontractor insurers have no duty to defend a general contractor against defective work allegations, a Florida federal judge held March 30, addressing summary judgment motions raised by several insurers, including the subrogated insurer to the general contractor, over their liability (BITCO National Insurance Co. v. Old Dominion Insurance Co., et al., No. 17-262, BITCO National Insurance Co. v. Southern-Owners Insurance Co., et al., No. 17-326, N.D. Fla., 2019 U.S. Dist. LEXIS 54908).

  • March 29, 2019

    COMMENTARY: Construction Defect Claims: A 2018 Update — Part 2

    By Thomas F. Segalla, Michael T. Glascott, Ashlyn M. Capote and Brandon D. Zeller

  • April 3, 2019

    2nd Circuit: No Coverage Owed Under Collapse Provision For Cracking

    NEW YORK — The Second Circuit U.S. Court of Appeals on April 2 affirmed three district court rulings in favor of a homeowners insurer in three separate cases seeking coverage for deteriorating and cracking basement walls in Connecticut homes after determining that the policies’ collapse provision does not provide coverage for the defective foundation walls because there was no sudden and accidental collapse as required by the policies (William A. Valls et al., v. Allstate Insurance Co., No. 17-3495, 2019 U.S. App. LEXIS 9596; Glenn R. Carlson, et al., v. Allstate Insurance Co., No. 17-3501, 2019 U.S. App. LEXIS 9586; Alan D. Lees et al., v. Allstate Insurance Co., No. 18-007, 2nd Cir., 2019 U.S. App. LEXIS 9585).

  • April 3, 2019

    Excess Insurer Denied Summary Judgment In Remanded Defective Reactors Suit

    KANSAS CITY, Kan. — Following a reversal and remand of an insurance coverage dispute from the 10th Circuit U.S. Court of Appeals, a Kansas federal judge on March 29 denied an excess insurer’s motion for summary judgment as to whether certain policy exclusions precluded coverage for defective jet bubble reactors (JBRs) that were constructed by subcontractors, with the judge finding many of the insurer’s arguments foreclosed by the appeals court’s ruling (Black & Veatch Corp. v. Aspen Insurance [UK] Ltd., et al., No. 2:12-cv-02350, D. Kan., 2019 U.S. Dist. LEXIS 54021).

  • April 2, 2019

    Judge Issues Expert, Evidentiary Rulings Ahead Of Construction Defect Trial

    MIAMI — A federal judge in Florida issued a slew of evidentiary and expert witness rulings on March 29 as an insurer defends claims that it improperly failed to defend its insured from construction defect claims (MI Windows & Doors LLC, et al. v. Liberty Mutual Fire Insurance Co., No. 14-3139, M.D. Fla., 2019 U.S. Dist. LEXIS 54058).

  • April 2, 2019

    Insured’s Foundation Damage Is Barred By Policy Exclusion, Federal Judge Says

    BOSTON — A Massachusetts federal judge on March 31 found that a commercial general liability insurer has no duty to defend its construction company insured against an underlying lawsuit, finding that the damage to the insured’s foundation, whether an accident or not, falls under the scope of a policy exclusion (Mills Construction Corporation, Inc., et al. v. Nautilus Insurance Company, No. 18-10549, D. Mass., 2019 U.S. Dist. LEXIS 55256).

  • April 1, 2019

    Judge Grants Default Judgment To Insurer In Defects Coverage Dispute

    CHARLOTTE, N.C. — A commercial general liability insurer was granted a default judgment against its insureds on March 25 by a North Carolina federal judge in its declaratory judgment lawsuit regarding two construction defect cases (Pennsylvania National Mutual Casualty Insurance Co. v. Jose Castillo, et al., No. 18-00271, W.D. N.C., 2019 U.S. Dist. LEXIS 49319).

  • April 1, 2019

    Magistrate Judge: No ‘Occurrence’ For Insured’s Damage To Equipment

    ROANOKE, Va. — Because there was no “occurrence,” a Virginia federal magistrate judge on March 29 found that an insurer has no duty to defend or indemnify its insured for any award over damage to a piece of equipment the insured provided for a construction project (Western World Insurance Co. v. Air Tech Inc., No. 17-518, W.D. Va., 2019 U.S. Dist. LEXIS 53683).

  • April 1, 2019

    No Coverage Owed Under 2 Homeowners Policies For Cracking In Basement Walls

    NEW HAVEN, Conn. — No coverage is afforded under two homeowners policies for cracking and deteriorating basement walls caused by the use of defective concrete because one of the policies includes an exclusion for cracking caused by the use of defective construction materials and the other policy provides coverage only for sudden and abrupt collapses, a Connecticut federal judge said March 29 (Frank V. Huschle, et al. v. Allstate Insurance Co., et. al., No. 18-248, D. Conn., 2019 U.S. Dist. LEXIS 53978).

  • April 1, 2019

    Judge Says Insurer Owes No Defense, Indemnity For Costs As No ‘Suit’ Was Filed

    SAN DIEGO — A commercial general liability insurer has no duty to defend or indemnify insureds for costs incurred to investigate and repair alleged defects at a military training facility, a California federal judge ruled March 28, finding that no “suit” had been filed (Harper Construction Company Inc., et al. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 18-00471, S.D. Calif., 2019 U.S. Dist. LEXIS 53183).

  • March 22, 2019

    Panel: No Fact Issues On Whether Insured’s Faulty Work Is An ‘Occurrence’

    GRAND RAPIDS, Mich. — A trial court erred in denying summary disposition to an insurer on the basis that there were factual issues as to whether faulty installation caused an “occurrence,” a Michigan appeals panel ruled March 19 (Skanska USA Building Inc. v M.A.P. Mechanical Contractors Inc., et al., Nos. 340871 & 341589, Mich. App., 2019 Mich. App. LEXIS 529).

  • March 22, 2019

    Insured’s Work Did Not Fall Within Exclusion, Appeals Panel Concludes

    BOSTON — A trial judge erred in finding that an insured’s work on concrete slab was inseparable from other subcontractors’ work on other layers of a flooring system and in ruling that an insurer had no duty to defend or indemnify, the Massachusetts Appeals Court held March 19, vacating judgment and remanding for further proceedings (All America Insurance Co. v. Lampasona Concrete Corp., No. 18-P-247, Mass. App., 2019 Mass. App. LEXIS 34).

  • March 22, 2019

    Judge: Breach Of Contract Exclusion Relieves Insurer’s Duty For Defects Lawsuit

    HOUSTON — A commercial general liability insurer has no duty to defend or indemnify an underlying construction defects action, a Texas federal judge ruled March 19, finding that a breach of contract exclusion applied to preclude coverage (Mt. Hawley Insurance Co. v. Huser Construction Company Inc., No. 18-0787, S.D. Texas, 2019 U.S. Dist. LEXIS 44611).

  • March 19, 2019

    Insurer Owes Additional Insured Defense Of Negligence Suit Arising From Fatal Fall

    SPRINGFIELD, Ill. — An Illinois appeals court on March 15 affirmed a lower court’s finding that an electrical subcontractor’s insurer has a duty to defend a general contractor against an underlying lawsuit arising from an electrician’s fatal fall at a project site, finding that the general contractor is vicariously liable for torts that the electrical subcontractor committed in the scope of it being the general contractor’s agent (Pekin Insurance Company v. Twin Shores Management, LLC, et al., No. 18-0513, Ill. App., 4th Dist., 2019 Ill. App. Unpub. LEXIS 431).

  • March 18, 2019

    Judge Rules Against CGL Insurer In Dispute Over Defective Thermal T-Panel Systems

    MISSOULA, Mont. — A Montana federal judge on March 6 denied a commercial general liability insurer’s motion for summary judgment in its lawsuit disputing coverage for an underlying $441,770.83 award against its contractor insured over claims that thermal T-panel systems that were installed by the insured were not effective and caused additional damage to condominium units (Western Heritage Insurance Co. v. Slopeside Condominium Association, Inc., et al., 17-162, D. Mont., 2019 U.S. Dist. LEXIS 36009).

  • March 14, 2019

    Judge: Replacement Of Hotel’s Curtainwall Was Defect, Not Property Damage

    OAKLAND, Calif. — A California federal judge on March 12 granted summary judgment in a construction defect insurance coverage lawsuit, finding that the underlying issue was not one of property damage but one of defective construction (Webcor Construction, LP, et al. v. Zurich American Insurance Company, et al., No. 17-2220, N.D. Calif., 2019 U.S. Dist. LEXIS 39834).

  • March 12, 2019

    Arbitration Agreement Does Not Require Arbitration Of Insurer’s Subrogation Claim

    SACRAMENTO, Calif. — An insurer’s subrogation claim against a company accused of manufacturing a faulty valve that caused an insured to sustain water damages is not subject to arbitration because the insurer’s subrogation claim was filed after a change was made to the arbitration agreement that excluded product liability claims from mandatory arbitration, the Third District California Court of Appeal said March 8 (State Farm General Insurance Co. v. Watts Regulator Co., No. C082125, Calif. App., 3rd Dist., 2019 Cal. App. Unpub. LEXIS 1653).

  • March 12, 2019

    Insurer Owes Defense To Contractor Against Construction Defects Case, Judge Finds

    DENVER — A commercial general liability insurer had a duty to defend a general contractor against a construction defects case, a Colorado federal judge ruled March 7 (KB Home Colorado Inc. v. Peerless Indemnity Insurance Co., No. 17-2441, D. Colo., 2019 U.S. Dist. LEXIS 36827).

  • March 11, 2019

    Panel: Insurer’s Duty-To-Indemnify Issue Not Ripe Until Resolution Of Defects Case

    ATLANTA — The 11th Circuit U.S. Court of Appeals on March 8 affirmed a lower judge’s dismissal of a commercial general liability insurer’s declaratory relief lawsuit regarding its duty to indemnify an insured against construction defect claims because that duty is not ripe for adjudication until the underlying case is resolved (Mid-Continent Casualty Co. v. Delacruz Drywall Plastering & Stucco Inc., et al., No. 18-14195, 11th Cir., 2019 U.S. App. LEXIS 6976).

  • March 8, 2019

    Judge Exercises Discretion Not To Issue Declaration As To Insurer’s Duty To Defend

    ORLANDO, Fla. — A Florida federal judge on March 5 held that “considerations of practicality and wise judicial administration” persuade him to exercise hi discretion not to issue a declaration on a commercial general liability insurer’s duty to defend and duty to indemnify a general contractor against an underlying design and construction defects lawsuit (Harleysville Worcester Insurance Company v. CB Contractors, LLC, et al., No: 17-258, M.D. Fla., 2019 U.S. Dist. LEXIS 34988).