GREENVILLE, S.C. — Finding no new evidence or legal error, a federal judge in South Carolina on Aug. 21 refused to reconsider his entry of summary judgment to a condominium association on the basis that some damages arising out of construction defects are covered by commercial general liability insurance policies and because the insurers did not effectively reserve their right to contest coverage (Stoneledge at Lake Keowee Owners Association Inc. v. Cincinnati Insurance Co., et al., No. 14-01906, D. S.C., 2019 U.S. Dist. LEXIS 141652).
BISMARCK, N.D. — An inland marine insurance policy’s earth movement exclusion precludes coverage for damage to an office building because earth movement was a cause of the damage to the building’s foundations and superstructure, a federal judge in North Dakota ruled Aug. 16, granting summary judgment to an insurer (Lexstar Construction, LLC v. AGCS Marine Insurance Co., No. 16-423, D. N.D., 2019 U.S. Dist. LEXIS 138768).
BRIDGEPORT, Conn. — Insureds seeking coverage for the cracking of their basement walls as a result of the use of defective concrete sufficiently alleged claims for breach of contract and violations of Connecticut law against a homeowners insurer, a Connecticut federal judge said Aug. 29 in denying the insurer’s motion to dismiss (Jose and Maria Oliveira v. Safeco Insurance Company of America et al., No. 18-338, D. Conn., 2019 U.S. Dist. LEXIS 147256).
LAS VEGAS — While denying an award of attorney fees in a contribution case among insurers over 16 construction defect cases, a federal judge in Nevada on Aug. 26 awarded prejudgment interest of $132,989.12 to defending insurers (Assurance Company of America, et al. v. Ironshore Specialty Insurance Co., No. 13-2191, D. Nev., 2019 U.S. Dist. LEXIS 146211).
OKLAHOMA CITY — A combination construction related endorsement (CCRE) and a roofing endorsement preclude coverage for underlying contract and tort claims arising out of damages from a contractor’s allegedly faulty roofing work, a federal judge in Oklahoma ruled Aug. 22, finding that the contractor’s insurer has no duty to defend or indemnify (Evanston Insurance Co. v. A&S Roofing LLC, et al., No. 17-870, W.D. Okla., 2019 U.S. Dist. LEXIS 142828).
TAMPA, Fla. — A commercial general liability insurer established by a preponderance of the evidence that the amount in controversy exceeds $75,000, a federal judge in Florida ruled Aug. 15, denying an insured’s motion to dismiss the declaratory judgment action regarding coverage for an underlying construction defects action (Mt. Hawley Insurance Co. v. Adams Homes of Northwest Florida Inc., et al., No. 19-01069, M.D. Fla., 2019 U.S. Dist. LEXIS 137828).
SAN ANTONIO — Citing exclusions for “defective work” and “mold,” a commercial general liability insurer alleges in an Aug. 12 complaint filed in a Texas federal court that it has no duty to defend or indemnify allegations of misrepresentations in the sale of a home with alleged defects (Mid-Continent Casualty Co. v. Dabney Homes LLC, No. 19-975, W.D. Texas).
CONCORD, N.H. — An insurer has no duty to indemnify an insured for the costs of replacement roofs and the cost of shingles, a federal judge in New Hampshire ruled July 23; however, the insurer has a duty to indemnify the insured for attorney fees awarded against it in arbitration (John Wallace, et al. v. Nautilus Insurance Co., No. 18-747, D. N.H., 2019 U.S. Dist. LEXIS 122219).
TOLLAND, Conn. — Questions of fact exist as to whether an insured home’s basement walls experienceda sudden falling or caving in as the result of defective concrete used when the foundation walls were built, a Connecticut judge said July 11 in denying the homeowners insurer’s motion for summary judgment (Alan J. Gnann, et al. v. United Services Automobile Association, No. CV166010517S , Conn. Super., 2019 Conn. Super. LEXIS 1955).
TAMPA, Fla. — A commercial general liability insurer on July 29 sued its insured contractor and an organization that fights homelessness, seeking a declaration from a Florida federal court of its duties against claims arising out of defective restoration work and installation of a roof (Evanston Insurance Co. v. Coast to Coast Construction Specialties Inc., et al., No. 19-01845, M.D. Fla.).
PHOENIX — Testimony from an attorney with experience in legal fields related to construction-related insurance claims “passes muster” under Federal Rule of Evidence 702, a federal judge in Arizona ruled Aug. 2, denying an insurer’s motion to preclude the expert testimony in its dispute with contractors over repairs to water damage (Adams Craig Acquisitions LLC, et al. v. Atain Specialty Insurance Co., et al., No. 18-00817, D. Ariz., 2019 U.S. Dist. LEXIS 129537).
DENVER — A Colorado appeals panel on Aug. 1 affirmed a lower court’s denial of an insurer’s motion to intervene in a construction defects case following an insured’s settlement agreement because the insured was entitled to protect itself with the potential of coverage being denied and the settlement offer having been refused by the insurer (Bolt Factory Lofts Owners Association Inc. v. Auto-Owners Insurance Co., No. 18CA1201, Colo. App., 2019 Colo. App. LEXIS 1126).
TRENTON, N.J. — A commercial general liability policy’s ongoing operations exclusion precludes coverage for construction defects to a swim club and pavilion building, a federal judge in New Jersey ruled July 31, also finding that a subcontractor exception to the “your work” exclusion does not apply to the ongoing operations exclusion (PJR Construction of New Jersey Inc. v. Valley Forge Insurance Co., et al., No. 17-4219, D. N.J., 2019 U.S. Dist. LEXIS 127973).
RICHMOND, Va. — In an insurance bad faith action against an insurer for its failure to defend an insured in a construction defect action, the Fourth Circuit U.S. Court of Appeals on July 25 remanded to a district court for instructions in accordance with the South Carolina Supreme Court’s ruling that “denying liability and/or asserting good faith in the answer does not, standing alone,” waive attorney-client privilege for claim files addressing the insurer’s reinsurance and reserves (In re: Mt. HawleyInsuranceCo., No. 18-1401, 4th Cir., 2019 U.S. App. LEXIS 22356).
ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on July 26 denied an excess insurer’s request for a panel rehearing and an en banc rehearing of its request to vacate a ruling that required it to pay $2.76 million to the maker and designer of air ducts that are allegedly defective (National Union Fire Insurance Company of Pittsburgh, PA, et al. v. Donaldson Company Inc. v. Federal Insurance Co., No. 18-1063, 8th Cir., 2019 U.S. App. LEXIS 22404).
DENVER — The 10th Circuit U.S. Court of Appeals on July 24 reversed and remanded a lower court’s finding that a professional liability insurance policy’s faulty workmanship exclusion precluded coverage for a lawsuit alleging that the insured poorly designed and constructed a fisheries enhancement project and the court’s grant of summary judgment on the insured’s claim of statutory bad faith but affirmed the dismissal of the insured’s common-law bad faith claim (Rockhill Insurance Company v. CFI-Global Fisheries Management, et al., Nos. 18-1201 & No. 18-1207, 10th Cir., 2019 U.S. App. LEXIS 22049).
DALLAS — A commercial liability insurer sued its insureds and a homeowners association on July 22 in a Texas federal court, seeking a declaration that it has no duty to defend or indemnify an underlying construction defect lawsuit, citing “damage to property,” “damage to your product” and “damage to your work” exclusions (Mid-Continent Casualty Co. v. Billingsley Residential LLC, et al., No. 19-1745, N.D. Texas).
HARRISBURG, Pa. — Because there was alleged damage to other property, not property that an insured contracted to provide, and that damage was caused by an accident, a flood, there are claims for property damage caused by an “occurrence,” a panel of the Pennsylvania Superior Court held July 22, reversing the entry of judgment that a commercial general liability insurer has no duty to defend or indemnify (Pennsylvania Manufacturers Indemnity Co. v. Pottstown Industrial Complex LP, et al., No. 3489 EDA 2018, Pa. Super., 2019 Pa. Super. LEXIS 729).
JACKSONVILLE, Fla. — A commercial general liability insurer has a duty to defend an additional insured in a construction defects case, a Florida federal judge ruled July 12; however, the judge stayed the issue of the insurer’s duty to indemnify (Auto-Owners Insurance Co. v. Environmental House Wrap Inc., et al., No. 17-817, M.D. Fla., 2019 U.S. Dist. LEXIS 115898).
By David B. Robbins and Jason M. Crawford