Mealey's Construction Defects Insurance
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January 25, 2021
Judge: Insured Unable To Show Building Damage Was Solely Caused By Hurricane
HOUSTON — A federal judge in Texas on Jan. 19 awarded summary judgment to an insurer that denied a company’s claim for damages that allegedly resulted from Hurricane Harvey, finding that the insured failed to provide any evidence showing that defects in the construction and repair of the building’s roof were not the actual cause for water intrusion .
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January 14, 2021
Federal Judge Grants Subcontractor Default Judgment Against Insurer
ALBUQUERQUE, N.M. — A New Mexico federal judge granted an insured subcontractor’s motion for a default judgment on Jan. 8, holding that the subcontractor was entitled to a declaratory judgment that its insurer has a duty to defend it in underlying litigation over alleged construction defects in a courthouse building.
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January 14, 2021
Insurer Granted Ruling In Overflowing Toilet Damage Dispute By New York Justice
NEW YORK — Coverage for water damage from an overflowing toilet was barred by a policy’s water exclusion endorsement, as well as the insured building owner’s failure to preserve the water-damaged sheetrock and flooring, a New York justice held Dec. 10 in granting summary judgment to the insurer.
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January 14, 2021
Judge: Builder Is Additional Insured; Insurer Must Defend It In Stucco Suit
ORLANDO, Fla. — In an order filed Dec. 12, a federal judge in Florida awarded summary judgment to KB Home Orlando LLC (KB Orlando), finding that it is an additional insured to a stucco subcontractor’s policy and that the insurance company must defend the general contractor in a lawsuit brought by a homeowners association over alleged defects in the installation of the stucco.
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January 13, 2021
Kentucky Federal Judge Declines Jurisdiction Over Roof Repair Coverage Suit
LONDON, Ky. — A Kentucky federal judge declined jurisdiction on Dec. 30 over an insurer’s action against its insured regarding coverage for $876,700 in roof repair costs sought in an underlying action, holding that a variety of factors weighed in favor of allowing a state court to resolve the insurance coverage questions.
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January 13, 2021
Policy Does Not Cover ‘Soft Costs’ For Additional Insureds, Federal Judge Says
DENVER — The owners of a building whose construction was delayed by water damage were not entitled to coverage for “soft costs” as additional named insureds under a policy issued to the general contractor, a Colorado federal judge held Dec. 31, granting partial summary judgment to the insurer.
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January 13, 2021
Judge Says Evidence Supports Insurer’s Defense Regarding Pre-existing Roof Defects
FORT MYERS, Fla. — A federal judge in Florida on Dec. 18 denied in part a motion for partial summary judgment and to strike an insurance company’s affirmative defenses filed by the assignee of an insured who was denied coverage for damages stemming from Hurricane Irma, finding that the insurer provided sufficient evidence to support its defense that defects in repairs to a building’s roof may have been present before the storm.
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January 13, 2021
Plumbing Subcontractor Awarded Summary Judgment In Insurers’ Roof Collapse Suit
KANSAS CITY, Mo. — A federal judge in Missouri on Dec. 23 denied a plumbing subcontractor’s motion to reconsider his ruling denying its motion for summary judgment based on the waiver of subrogation clauses in lease agreements between a landlord and two tenants of a warehouse whose property was damaged as a result of a roof collapse but found that the subcontractor was entitled to summary judgment on claims brought by insurers that provided policies to the tenants based on the acceptance doctrine because the building’s owner approved of the plumbing subcontractor’s installation of the roof’s drainage system.
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January 13, 2021
Judge Orders Arbitration Of Payment Obligations For Defense In Defects Suit
NEW YORK — A federal judge in New York on Dec. 23 ordered Wynn Las Vegas LLC and a general contractor to arbitrate their payment obligations to Wynn’s insurer for the defense it provided in a lawsuit over an improperly installed sprinkler system, finding that the insurer’s request is subject to the arbitration provision in the policy’s payment agreement.
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January 13, 2021
Insurer Says Homeowners’ Claims Against Contractor Not Covered Under Policy
ALLENTOWN, Pa. — An insurer says in a lawsuit filed in the U.S. District Court for the Middle District of Pennsylvania on Dec. 31 and transferred to the Eastern District of Pennsylvania on Jan. 4 that it is not required to provide a defense to a contractor accused of construction defects, arguing that the claims arose before it issued a policy to the contractor and that the claims are precluded from coverage.
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January 12, 2021
Appeals Court Finds Faulty Workmanship Exclusion Unambiguous, Includes Process
MIAMI — A Florida appeals court on Dec. 23 affirmed a ruling awarding summary judgment to an insurance company in a dispute over its denial of coverage to a woman whose home was damaged when a contractor was remodeling the home, holding that the faulty workmanship exclusion in her all-risk insurance policy was unambiguous and included the process the contractor implemented when performing the work.
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January 11, 2021
Insurer Files Suit Saying It Has No Duty To Defend In Defects Suits
PHILADELPHIA — An insurer filed a declaratory judgment lawsuit in federal court in Pennsylvania on Jan. 6 seeking an order stating that it has no duty to defend parties involved in a construction defects lawsuit filed in New Jersey state court over damages resulting from the allegedly improper installation of stucco, explaining that the work was performed before it issued policies to the general contractor and that the claims are excluded from coverage based on language in the policies.
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January 11, 2021
Insurers Say Pollution Exclusions Bar Coverage For Fiberglass Insulation Dispersal
TULSA, Okla. — No coverage is owed for an underlying suit alleging that an insured’s negligent installation of a heating and air conditioning system caused fiberglass insulation to contaminate a home because the total pollution exclusion endorsements in the insured’s primary and umbrella insurance policies bar coverage, the insurers contend in a Jan. 8 complaint filed in Oklahoma federal court.
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January 11, 2021
Contractor’s Counterclaims Dismissed In Condo Suit By California Magistrate Judge
OAKLAND, Calif. — A California federal magistrate judge on Jan. 4 dismissed with leave to amend most of a general contractor’s counterclaims against an insurer in a coverage dispute over a condominium project. Dismissed without leave to amend were the counterclaims for breach of contract based on failure to indemnify and for violation of state insurance regulations.
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January 08, 2021
Insurer Says It Has No Duty To Defend Subcontractor Accused Of Substandard Work
EAST ST. LOUIS, Ill. — An insurer says in a declaratory judgment lawsuit filed in federal court in Illinois on Dec. 22 that it has no duty to defend a subcontractor accused of substandard work at a job in Missouri because the allegedly poor workmanship did not result in property damage.
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December 31, 2020
Insurer Says No Duty To Defend Contractor In Negligence Action
SIOUX FALLS, S.D. — In a complaint filed Dec. 22 in South Dakota federal court, an insurer seeks a declaratory judgment that it need not defend an insured accused of negligence in connection with a faulty drainage system that allegedly caused a homeowner $389,456.49 in damages.
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December 30, 2020
7th Circuit Overturns Ruling Finding Insurer Had No Duty To Defend Valve Installer
CHICAGO — The Seventh Circuit U.S. Court of Appeals on Dec. 22 overturned a ruling granting an insurer’s motion for judgment on the pleadings in a declaratory judgment lawsuit against the installer of valves that were defective, holding that the judge erred when cherry picking facts that were in documents the judge refused to admit to the record to support the decision to grant the motion (Federated Mutual Insurance Co. v. Coyle Mechanical Supply Inc., No. 20-1207, 7th Cir., 2020 U.S. App. LEXIS 40087).
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December 22, 2020
California Panel Says 2007 Lawsuit Over Defective Grading Related To 2003 Action
SANTA ANA, Calif. — A California appeals court on Dec. 18 affirmed a ruling finding that an insurer that issued a policy to a soil-grading subcontractor in 2007 is not required to pay a $3.2 million judgment to a developer or provide coverage for a consolidated lawsuit brought in 2007 by homeowners who allegedly sustained property damages as a result of the subcontractor’s work because the allegations in the homeowners’ lawsuit over the work were related to an earlier lawsuit that was covered by a policy issued by a different insurer in 2003 (D.R. Horton L.A. Holding Co. Inc. v. Certain Underwriters at Lloyd’s, No. G057467, Calif. App., 4th Dist., 3rd Div., 2020 Cal. App. Unpub. LEXIS 8422).
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December 07, 2020
Insolvent Insurer Owes $1M To Contractor For Breach Of Duty To Defend, Panel Says
HARRISBURG, Pa. — An insured contractor is entitled to $1,092,250.09 for an insolvent insurer’s breach of its duty to defend the insured against a defective work lawsuit and a resulting judgment, the Pennsylvania Commonwealth Court held Dec. 3 (Franjo Vernic v. Lincoln General Insurance Company, No. 4 LIN 2017, Pa. Cmwlth., 2020 Pa. Commw. LEXIS 755).
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December 07, 2020
Reconsideration In Water Damage Suit Denied; Damages Do Not Exceed Deductible
BALTIMORE — A federal judge in Maryland on Dec. 1 denied an insured hotel’s motion for reconsideration after determining that the insured failed to present any new evidence concerning its claim for water damage caused by a windstorm and said that the insurer is entitled to summary judgment because the insured conceded that the covered damages do not exceed the policy’s deductible (Bethany Boardwalk Group LLC v. Everest Security Insurance Company, No. 18-3918, D. Md., 2020 U.S. Dist. LEXIS 225178).