DENVER — A 4-3 Colorado Supreme Court on May 24 affirmed a ruling denying an insurer’s motion to intervene in a construction defects suit, finding that the insurer could protect its interest against a stipulated judgment entered into between an owners’ association and a subcontractor in a subsequent declaratory judgment proceeding.
DENVER — A 10th Circuit U.S. Court of Appeals panel on June 1 affirmed a ruling that an insurance company had no duty to defend a developer in an underlying lawsuit brought by a homeowners’ association over a defectively built retaining wall, holding that exclusions in policies were applicable.
PITTSBURGH — A federal judge in Pennsylvania on May 20 refused to reconsider a ruling denying an insurer’s motion to dismiss a builder’s bad faith and breach of contract claims and denied certification of the decision for interlocutory appeal, finding that the insurer was unable to provide a conflicting precedent.
LOS ANGELES — A claims administration company and an adjuster accused by four homebuilders of failing to repay more than $10 million in self-insurance retention (SIR) payments made as part of homebuilder protection (HBP) policies say in a brief filed May 24 in federal court in California that the suit should not be remanded because the builders’ claims against the adjuster are subject to Illinois law, which requires them to show that any alleged misrepresentations he made about the SIR provision in the policies were material.
TACOMA, Wash. — A condominium owners’ association says in a lawsuit filed May 20 in federal court in Washington that its insurer wrongfully denied its claim for hidden damage to sheathing and framework because it had a duty to investigate whether it was the result of weather and construction defects.
LOS ANGELES — A California federal judge on May 4 granted summary judgment in favor of a property insurer after determining that the policy’s independent contractor exclusion bars coverage for an underlying suit arising out of excessive dust created by work completed at an insured property.
SAN DIEGO — A federal judge in California on May 12 ruled that a defendant insurer is not required to contribute the costs of defending and settling an underlying construction defects lawsuit between a builder and a property owner, holding that a breach of contract exclusion in a policy issued to the contractor after the project was completed does not require it to defend the contractor.
AUSTIN, Texas — A federal magistrate judge in Texas on May 20 recommended dismissing an insurer’s declaratory judgment suit for lack of jurisdiction after a roofing contractor that had a policy issued by the company withdrew its request for coverage in underlying suits saying its alleged negligent installation of a metal roof worsened the effects of a July 2018 apartment complex fire that killed five people and injured multiple occupants.
NASHVILLE, Tenn. — An insurer says in a complaint filed May 4 in federal court in Tennessee that it has no duty to defend or indemnify a contractor in an underlying suit over defects in the construction of a firearms store and shooting range’s concrete pad, arguing that misrepresentations in the policy application as well as exclusions in the policy warrant the requested relief
PITTSBURGH — An insurer says in a suit filed in federal court in Pennsylvania on April 30 that it has no duty to defend developers in an underlying action brought by a homeowners association over landslides that occurred in 2006, 2015 and 2017, arguing that the 2006 landslide was not an occurrence under the policy and that the later landslides are not covered because there was no active policy in place.
DALLAS — Claims in a property owner’s state court lawsuit against a contractor over alleged construction defects that have caused cracks in the interior floor slab and affected the structural integrity of the building are not covered by the builder’s policies, the contractor’s insurer says in a declaratory judgment lawsuit filed in federal court in Texas on May 5.
LAS CRUCES, N.M. — A roofing company’s suit against its insurer and a third-party administrator for breach of contract and bad faith over the insurer’s refusal to provide a defense in an underlying suit was sent back to state court on May 13 after a federal judge in New Mexico found that the removal of the suit was defective.
MOBILE, Ala. — A federal magistrate judge in Alabama on April 29 recommended dismissing without prejudice an insurer’s declaratory judgment suit seeking an order saying it has no duty to defend or indemnify a contractor in a state court suit accusing it of defective deck work at a conference center, finding that the federal court should abstain from jurisdiction over the suit because the state court action involves substantially the same parties and similar issues.
By Thomas F. Segalla, Michael T. Glascott, Ashlyn M. Capote, Adam R. Durst, Sean P. Hvisdas and Jason E. Rusche
CHICAGO — An Illinois state court judge’s rulings dismissing claims for breach of contract and negligence brought by the insurer of a building against contractors and subcontractors who allegedly performed defective work for tenants were affirmed April 27 by an Illinois appeals panel after the panel found that the owner was not a third-party beneficiary to the contracts and that its negligence claims were barred by the economic loss doctrine.
NASHVILLE, Tenn. — In answering one of three questions certified to it by a federal judge in Tennessee, the state’s high court held April 26 that a contractor has no private cause of action under state law against an insurer that failed to name it as a payee for work performed to repair storm damage at a property because while the contractor is an intended beneficiary of the statute, there was no legislative intent to provide it with a cause of action to file suit.
LOS ANGELES — KB Home Nevada Inc. and three of its affiliates on May 3 filed a motion in federal court in California saying that a lawsuit accusing two insurance companies and a man who claimed to be a claims adjuster and third-party administrator (TPA) of failing to repay more than $10 million in self-insurance retention (SIR) payments made as part of homebuilder protection (HBP) policies should be remanded, arguing that the man is not fraudulently joined because the complaint sufficiently pleads claims for negligent misrepresentation and intentional misrepresentation against him.
MACON, Ga. — No coverage is owed for an underlying lawsuit seeking damages caused by storm water runoff as a result of insureds’ property development activities because the policy’s pollution exclusion and the policy’s “your work” exclusion bar coverage for the underlying suit, an insurer asserts in an April 27 complaint filed in Georgia federal court.
MONTGOMERY, Ala. — A federal judge in Alabama on April 26 ruled that the court should preside over an insurance company’s declaratory judgment lawsuit against a homebuilder and its owner and five individuals involved in state court construction defects lawsuits against the builder, finding that dismissing or staying the case would be unproductive and waste judicial resources because the insurer’s suit over its duty to defend is related only to the state court actions.
LEXINGTON, Ky. — A general contractor that oversaw the construction of a six-story mixed-use building sued a subcontracting company and its owner in federal court in Kentucky on April 21, claiming that the subcontractor’s use of a chemical that was incompatible with the chlorinated polyvinyl chloride piping (CPVC) and fittings used in the building’s fire suppression system was negligent and caused cracks and water leaks.