ATLANTA — A lower court did not err in applying a $375,000 setoff amount to a damages award or in awarding prejudgment interest beginning the day that an insured spent $375,000 in defense costs in an underlying lawsuit alleging that the insured improperly constructed on land without taking reasonable steps to implement a workable drainage system, the 11th Circuit U.S. Court of Appeals affirmed April 29 (Mid-Continent Casualty Co., et al. v. Adams Homes of Northwest Florida Inc., et al., No. 19-12892, 11th Cir., 2020 U.S. App. LEXIS 13748).
SAN ANTONIO — A “damage to your work” exclusion precludes coverage for an underlying construction defects case, an insurer argues in an April 15 complaint filed in a Texas federal court (The Cincinnati Insurance Co. v. One Stop Services, Inc., et al., No. 20-471, W.D. Texas).
SPOKANE, Wash. — A Washington appeals panel majority on April 28 reversed a lower court’s approval of $1.7 million settlement and remanded for a second reasonableness hearing on a covenant agreement between homeowners and an insured contractor because there is a “significant discrepancy” between the insured’s valued estimate of $350,000 and the settlement amount (Jeffrey Wood, et al. v. Milionis Construction, Inc., et al., No. 36286-8-III, Wash. App., Div. 3, 2020 Wash. App. LEXIS 1241).
LOS ANGELES — The manufacturer of defective water supply line in a kitchen faucet must pay more than $3 million in damages incurred as a result of the defect, an insurer, as the subrogee of an insured whose property was damaged by the defective line, claims in an April 22 complaint filed in California federal court (Travelers Commercial Insurance Co. v. Grohe America Inc., No. 20-3703, C.D. Calif.).
LOS ANGELES — A remodeling company accuses its insurer of bad faith in an April 20 complaint filed in a California federal court over the insurer’s decision to deny a request for independent counsel in a lawsuit by homeowners for defective work in their home (Westside Remodeling Corporation v. James River Insurance Company, No. 20-03622, C.D. Calif.).
HOUSTON — Two insurers allege in an April 20 complaint filed in a Texas federal court that they owe no coverage for an underlying arbitration regarding construction defects in a home because the policies’ “faulty work” exclusions and other exclusions preclude that obligation (Association Insurance Co. v. Schwab Design Builders, Inc., No. 20-1398, S.D. Texas).
TALLAHASSEE, Fla. — Although dismissing an insurer’s declaratory judgment action against a builder concerning a $4.7 million enforcement case over defects in hundreds of homes, a Florida federal judge on April 15 allowed the insurer to amend its complaint to add the homeowners as parties (Kinsale Insurance Company v. PulteGroup, Inc., et al., No. 19-544, N.D. Fla.).
SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on April 16 affirmed a lower federal court’s ruling that an insurer has no duty to defend against any of 21 construction defects lawsuits brought against two insured subcontractors (Zurich American Insurance Company, et al. v. Ironshore Specialty Insurance Company, No. 18-16950, 9th Cir., 2020 U.S. App. LEXIS 12073).
ATLANTA — Insurers argue in an April 17 appellant brief to the 11th Circuit U.S. Court of Appeals that a lower court erred in finding that their dispute with a reinsurer over a construction defects case settlement should be arbitrated because the arbitration clause does not apply when the reinsurer is in runoff (Builders Insurance, et al. v. Fletcher Reinsurance Co., No. 20-10969, 11th Cir.).
AUSTIN, Texas — The allegations in two underlying cases against an insured for water leaks from a residential community’s plumbing system do not plainly trigger a policy’s exclusion for liability arising from new construction of more than 10 residential homes, a Texas federal magistrate judge said April 13 (Mesa Underwriters Specialty Insurance Co. v. Gonzales Plumbing Co., et al., No. 19-1, W.D. Texas, 2020 U.S. Dist. LEXIS 64704).
SAN FRANCISCO — The Ninth Circuit U.S Court of Appeals on April 15 affirmed that a “your product” exclusion relieved the insurer of a curtainwall design company from a duty to defend additional insureds in a construction defects case (Old Republic General Insurance Corp. v. Motorists Mutual Insurance Co., No. 19-15805, 9th Cir., 2020 U.S. App. LEXIS 11907).
INDIANAPOLIS — Neither a collapse to a church’s sanctuary nor any resulting “property damage” occurred within the policy period, an insurer argues in a March 25 complaint filed in an Indiana federal court, further asserting a late notice defense (Acuity, a mutual insurance company v. Custom Craftsmen Homes and Remodeling, LLC, et al., No. 20-948, S.D. Ind.).
SAN FRANCISCO — A window manufacturer accuses a commercial general liability insurer in an April 13 complaint filed in a California federal court of wrongfully denying coverage for property damage caused by leaks from windows that were installed in a mixed-use residential community (Ply Gem Industries Inc. v. James River Insurance Co., No. 20-2475, N.D. Calif.).
SAN DIEGO — There are multiple “occurrences” for alleged defects in a condominium construction project under a “wrap-up” insurance policy, a federal judge in California held April 13, granting summary judgment to the insurer (Liberty Mutual Fire Insurance Co. v. Bosa Development California II, Inc., et al., No. 17-666, S.D. Calif., 2020 U.S. Dist. LEXIS 65243).
SAN DIEGO — An army contractor’s fraud claims against a commercial general liability insurer can proceed in a $2 million dispute over costs to repair alleged defects at a military training facility, a California federal judge held April 10, denying in part the insurer’s motion for judgment on the pleadings (Harper Construction Company, Inc., et al. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 18-471, S.D. Calif., 2020 U.S. Dist. LEXIS 64360).
MINNEAPOLIS — Zurich American Insurance Co. cites a professional liability exclusion among other exclusions in its March 27 complaint as reasons for a Minnesota federal court to declare that the insurer has no duty to defend or indemnify an arbitration dispute concerning work on an unitized exterior metal panels package (UMP System) for a hotel construction project (Zurich American Insurance Co. v. M.G. McGrath, Inc., et al., No. 20-00824, D. Minn.).
CHARLESTON, S.C. — A South Carolina federal judge on April 3 issued six separate orders ruling on the existence of a duty to defend a general contractor against construction defects claims under commercial general liability insurance policies issued to various subcontractors for work on a community of homes (Dan Ryan Builders West Virginia, LLC, et al. v. Main Street America Assurance Co., et al., No. 18-00589, D. S.C., 2020 U.S. Dist. LEXIS 59197).
SEATTLE — A homeowners association accuses an insurer in an April 3 complaint filed in a Washington federal court of breaching its contract, acting in bad faith and violating Insurance Fair Conduct Act (IFCA) and the Consumer Protection Act (CPA) regarding the insurer’s decision to deny coverage for hidden water damage in stucco (Northgate Plaza Homeowners Association v. Sirius America Insurance Co., et al., No. 20-00519, W.D. Wash.).
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).
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).