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Mealey's Construction Defects Insurance

  • October 25, 2018

    Judge Orders Production Of Insurer’s Reinsurance In Defects Coverage Case

    CHARLESTON, S.C. — A South Carolina federal judge on Oct. 24 declined to stay a coverage dispute over a defectively constructed project for an in camera review and instead ordered an insurer to produce documents pertaining to reinsurance and reserves (ContraVest Inc., et al. v. Mt. Hawley Insurance Co., No. 15-00304, D. S.C., 2018 U.S. Dist. LEXIS 182196).

  • October 23, 2018

    Dismissal Motions Denied Until Connecticut High Court Answers Collapse Question

    BRIDGEPORT, Conn. — A Connecticut federal judge on Oct. 19 denied a number of motions to dismiss filed by defendant insurers in a class action suit seeking coverage for the deterioration and cracking of homeowners’ basement walls caused by the use of defective concrete after determining that the motions will best be addressed after the Connecticut high court answers a certified question regarding whether a collapse provision, used in numerous policies, should be applied to the homeowners’ claims (Michael Halloran v. Harleysville Preferred Insurance Co., et al., No. 16-133, D. Conn., 2018 U.S. Dist. LEXIS 179807).

  • October 19, 2018

    Fact Issues Remain On Whether Insurer Breached Contract, Judge Finds

    ALBUQUERQUE, N.M. — Homeowners sufficiently raised allegations on whether an insurer acted in good faith in denying their water damages claim and if the insurer breached the contract by failing to investigate the claim, a New Mexico federal judge ruled Oct. 17, denying summary judgment to the insurer on breach of contract claims (Hector Fava, et al. v. Liberty Mutual Insurance Corp., No. 17-456, D. N.M., 2018 U.S. Dist. LEXIS 179385).

  • October 19, 2018

    No Duty To Indemnify Construction Defects Case, Insurer Contends

    LOS ANGELES — In an Oct. 11 complaint filed in a California federal court, an insurer argues that it has no duty to defend or indemnify a contractor and subcontractor because a total pollution exclusion and a professional liability exclusion bar coverage for an underlying construction defects case (Houston Casualty Co. v. Rosebud Ventures LLC, et al., No. 18-8777, C.D. Calif.).

  • October 18, 2018

    Insurers’ Dispute On Equitable Contribution For Defect Claims Heard

    LOS ANGELES — A California appeals court on Sept. 27 heard arguments in an equitable contribution dispute between two insurers regarding fees incurred in the defense of a real estate developer as an additional insured in an underlying construction defect action (Interstate Fire and Casualty Co. v. Axis Surplus Insurance Co., No. B286980, Calif. App., 2nd Dist., Div. 8).

  • October 18, 2018

    No Additional Insured Coverage For Excavation Damages, Justice Finds

    NEW YORK — In a coverage dispute over damages from excavation work, a subcontractor’s insurer did not provide any additional insured coverage to a developer, a New York justice held Oct. 9, dismissing breach of contract and declaratory judgment claims against the insurer (350 East Houston Street LLC, et al. v. Travelers Indemnity Company of America, et al., No. 650450/2018, N.Y. Sup., N.Y. Co., 2018 N.Y. Misc. LEXIS 4579).

  • October 17, 2018

    Insurers: No Coverage Owed For Shoddy Work On Texas State Highway

    AUSTIN, Texas — Two insurers allege in an Oct. 12 complaint filed in a Texas federal court that they have no coverage obligations for a $130 million arbitration proceeding in which an insured is accused of defective construction work on a Texas state highway project (American Guarantee & Liability Insurance Co., et al. v. Zachry Industrial Inc., No. 18-872, W.D. Texas).

  • October 11, 2018

    Claims Trimmed In Insurance Bad Faith Suit Over Sinkhole Coverage

    TRENTON, N.J. — A federal judge in New Jersey on Oct. 9 ruled that insureds in a homeowners insurance dispute failed to show that their insurer acted in bad faith in denying their claim for coverage because the insurer relied on information provided by two engineers showing that property damage to the home was not covered under the insurance policy (Natalie Orban, et al. v. Liberty Mutual Fire Insurance Co., No. 16-3050, D. N.J., 2018 U.S. Dist. LEXIS 173212).

  • October 10, 2018

    Subcontractor’s Faulty Work Is Not Covered By CGL Policy, Ohio High Court Says

    COLUMBUS, Ohio — The Ohio Supreme Court ruled Oct. 9 that a commercial general liability insurer has no duty to defend a contractor against a university’s lawsuit because subcontractor faulty workmanship is not fortuitous and does not meet the definition of an “occurrence” (Ohio Northern University v. Charles Construction Services Inc. v. The Cincinnati Insurance Co., No. 2017-0514, Ohio Sup., 2018 Ohio LEXIS 2375).

  • October 10, 2018

    Insurer’s Contribution Claim Survives; Contractual Indemnity Claim Is Dismissed

    DENVER — An insurer’s contractual indemnity claim against a contractor survived dismissal; however, a Colorado federal judge held Sept. 27 that the insurer’s contribution claim is barred under a settlement release regarding damages from a collapse (Pennsylvania Lumbermens Mutual Insurance Co., et al. v. RStart LLC, No. 18-00478 c/w 18-00564, D. Colo., 2018 U.S. Dist. LEXIS 166429).

  • October 8, 2018

    Judge: Defense Owed For Mold, Water Damages From Insured’s Faulty Installation

    MIAMI — An insurer has a duty to defend mold and water damages caused by an insured’s negligent installation of windows, a Florida federal judge held Oct. 5, adopting a magistrate’s recommendation to deny summary judgment to the insurer (National Builders Insurance Co. v. RQ Building Products Inc., et al., No. 17-61474, S.D. Fla., 2018 U.S. Dist. LEXIS 172705).

  • October 8, 2018

    2nd Circuit: No Insurance For Damage Caused By Collapse, Cracking

    NEW YORK — The Second Circuit U.S. Court of Appeals on Oct. 5 affirmed that an insured home’s foundation damage was not covered because the policy excludes coverage for a collapse that was caused by cracking based upon the use of faulty materials (Geung-Ho Kim, et al. v. State Farm Fire and Casualty Insurance Co., No. 17-2304, 2nd Cir., 2018 U.S. App. LEXIS 28300).

  • October 8, 2018

    Judge: Endorsement Offers Possibility Of Coverage For Insured’s Defects

    HONOLULU — A possibility of coverage for construction defect claims exists due to a revised occurrence endorsement, a Hawaii federal judge held Sept. 24, granting partial summary judgment to an insured regarding an insurer’s duty to defend but finding the duty-to-indemnify issue to be premature (Gemini Insurance Co. v. Constrx Ltd., No. 14-00355, D. Hawaii, 2018 U.S. Dist. LEXIS 163453).

  • October 5, 2018

    Judge Denies Remand Of Defective Drywall Suit, Finds Insurer Improperly Joined

    NEW ORLEANS — A federal judge in Louisiana on Oct. 3 denied a couple’s motion to remand their lawsuit seeking damages for Chinese-made drywall that was installed in their home following Hurricane Katrina, finding that they improperly joined their insurer as a defendant (Cedric Richmond, et al. v. National Gypsum Services Co., No. 17-7453, E.D. La., 2018 U.S. Dist. LEXIS 170814).

  • October 3, 2018

    Judge: Policy Precludes Coverage For Insured’s New Construction Work

    CAMDEN, N.J. — An insurer has no duty to defend or indemnify an insured subcontractor for construction defects allegations because the policy excludes coverage for residential new construction work, a New Jersey federal judge ruled Sept. 28 (Colony Insurance Co. v. Troensa Construction Inc., et al., No. 17-03577, D. N.J., 2018 U.S. Dist. LEXIS 167683).

  • October 3, 2018

    Judge: Some Defective Construction Is Covered Under Insurance Policies

    GREENVILLE, S.C. — Because some damages arising out of construction defects are covered by commercial general liability insurance policies and because insurers did not effectively reserve their right to contest coverage, a South Carolina federal judge on Sept. 28 granted summary judgment to a condominium association (Stoneledge at Lake Keowee Owners Association Inc. v. Cincinnati Insurance Co., et al., No. 14-01906, D. S.C., 2018 U.S. Dist. LEXIS 167792).

  • September 26, 2018

    No Coverage Owed For Continuous, Repeated Water Damage, Judge Says

    SPRINGFIELD, Ill. — No coverage is owed to insureds for water damage discovered in their hotel property because the policy’s exclusion for continuous water leakage precludes coverage, an Illinois federal judge said Sept. 24, noting that the evidence shows that there were years of leaks and dampness in the room where the water damage was discovered (Tracy Holdings LLC v. West Bend Mutual Insurance Co., No. 16-3100, C.D. Ill., 2018 U.S. Dist. LEXIS 162363).

  • September 25, 2018

    Judge Dismisses Insurer’s Duty-To-Indemnify Suit As Being Premature

    FORT MYERS, Fla. — A Florida federal judge on Sept. 24 dismissed a commercial general liability insurer’s coverage dispute regarding its duty to indemnify an insured against construction defect claims because the matter is not ripe for review (Mid-Continent Casualty Co. v. Delacruz Drywall Plastering & Stucco Inc., et al., No. 16-720, M.D. Fla., 2018 U.S. Dist. LEXIS 162864).

  • September 24, 2018

    Insurer’s Duty To Defend Lawsuit Should Proceed, Magistrate Judge Finds

    ALBUQUERQUE, N.M. — A commercial general liability insurer’s declaratory judgment case against an insured contractor and homeowners should proceed regarding coverage for noxious gas found in a home after spray foam insulation work, a New Mexico federal magistrate judge held Sept. 20 (International Insurance Company of Hannover SE v. Connors & Sons Classy Construction LLC, et al., No. 17-0825, D. N.M., 2018 U.S. Dist. LEXIS 161805).

  • September 24, 2018

    No Coverage Due For Deterioration Of Foundation Walls, Judge Determines

    HARTFORD, Conn. — No coverage is owed to a homeowner seeking coverage for the deterioration of her home’s foundation as a result of a chemical reaction in the concrete used to build the home because the damage gradually occurred over time and was not sudden and accidental as required by the policy, a Connecticut federal judge said Sept. 20 (Maureen E. Carney v. Allstate Insurance Co., No. 16-592, D. Conn., 2018 U.S. Dist. LEXIS 161401).