Lexis Legal News : Mealey's Construction Defects Insurance : Lawsuit Filings, Litigation, Settlements, Verdicts and Court News

Mealey's Construction Defects Insurance

September 04, 2019
Judge: No New Evidence To Reconsider In Coverage Dispute Over Defective Construction

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).
September 04, 2019
Earth Movement Exclusion Bars Coverage For Insured’s Damage, Federal Judge Says

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).
September 03, 2019
Insureds’ Claims Arising Out Of Crumbling Walls Survive Dismissal, Judge Says

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).
August 30, 2019
Judge Awards Prejudgment Interest, Denies Attorney Fees In Insurers’ Contribution Suit

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).
August 27, 2019
Judge: Exclusions Bar Coverage For Insured’s Faulty Roofing Work

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).
August 16, 2019
Judge Refuses To Dismiss Insurer’s Coverage Dispute Over Construction Defects

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).
August 15, 2019
Insurer Says No Duty To Defend, Indemnify Alleged Misrepresentations Of Defects

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).
August 14, 2019
Insurer Has No Duty To Indemnify For Costs To Replace Roofs, Judge Says

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).
August 08, 2019
Questions Of Fact Exist On Collapse Provision In Policy, Judge Says

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).
August 08, 2019
Insurer Seeks Declaration Of Duties As To Defective Restoration Work On Roof

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.).
August 07, 2019
Judge Refuses To Bar Expert Testimony In Insurance Case Over Water Damage Repairs

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).
August 06, 2019
Panel Upholds Denial Of Insurer’s Motion To Intervene In Construction Defects Case

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).
August 02, 2019
Judge: Ongoing Operations Exclusion Bars Insurance For Defects Arbitration Demand

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).
July 31, 2019
4th Circuit Remands Insurance Bad Faith Case In Light Of Discovery Ruling

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).
July 30, 2019
8th Circuit Denies Excess Insurer’s Request To Rehear Coverage Dispute Over Ducts

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).
July 25, 2019
Panel Reverses Ruling As To Faulty Workmanship Exclusion, Statutory Bad Faith

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).
July 25, 2019
Insurer: No Coverage For Construction Defect Case Under ‘Damage’ Exclusions

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).
July 23, 2019
Flood Damage To Other Property Is An ‘Occurrence’ Under Policy, Panel Says

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).
July 17, 2019
Judge Says Insurer Owes Defense For Defects Case But Stays Indemnity Issue

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).
July 08, 2019
COMMENTARY: The Surety Company’s Guide To Mitigating False Claims Act Risks

By David B. Robbins and Jason M. Crawford