Mealey's Construction Defects Insurance

  • November 30, 2020

    Judge: Fact Issues Remain On Insurer’s Breach Of Contract, Contractual Indemnity Claims

    JACKSON, Miss. — A Mississippi federal judge on Nov. 23 denied summary judgment to a subcontractor on an insurer’s contractual indemnity and breach of contract claims related to the settlement of a construction dispute involving 1,000 homes near an U.S. Air Force (USAF) base because genuine issues of material fact exist as to the insurer’s assignment of rights (Illinois Union Insurance Company v. Heil Builders, Inc., et al., No. 19-365, S.D. Miss., 2020 U.S. Dist. LEXIS 218956).

  • November 23, 2020

    Mold Exclusion Precludes Coverage For Damages Caused By Remediation Work

    SAN FRANCISCO — The Ninth U.S. Circuit Court of Appeals on Nov. 20 affirmed a district court’s ruling that no coverage is owed to an insured for damages arising out of its mold remediation work because a mold exclusion in the commercial general liability provision of the policy clearly precludes coverage (Rockhill Insurance Co. v. CSAA Insurance Exchange, et al., No. 19-16716, 9th Cir., 2020 U.S. App. LEXIS 36613).

  • November 20, 2020

    Magistrate Recommends Fees, Costs To Insurer Over Defense Of Negligence Suit

    MIAMI — A commercial general liability insurer was recommended an award of $48,239.53 in attorney fees and costs on Nov. 16 by a Florida federal magistrate judge after successfully obtaining summary judgment on its obligations to an insured in a suit alleging damages from faulty installation of a roofing sealant (Atlantic Casualty Insurance Company v. Legacy Roofing of Flahead General Contractors & Restoration, LLC, et al., No. 19-22043, S.D. Fla., 2020 U.S. Dist. LEXIS 215906).

  • November 18, 2020

    Magistrate Judge Dismisses Insurer’s Coverage Dispute Over Faulty HVAC System

    BIRMINGHAM, Ala. — There is no personal or subject matter jurisdiction to hear an insurance coverage dispute against a general contractor and a heating, ventilation and air conditioning (HVAC) subcontractor regarding claims arising out of allegedly defective HVAC installation work in a student housing complex, an Alabama federal magistrate judge said Nov. 17, dismissing the insurer’s case (Pennsylvania National Mutual Casualty Insurance Company v. 3D Air Services, Inc., et al., No. 20-43, N.D. Ala., 2020 U.S. Dist. LEXIS 214734).

  • November 17, 2020

    Judge Allows Insurer’s Coverage Dispute On Stucco Work Lawsuits To Proceed

    PHILADELPHIA — A Pennsylvania federal judge on Nov. 16 declined to dismiss an insurance coverage dispute over homeowners’ lawsuits alleging that contractors improperly installed stucco on their houses, causing water intrusions and other damage (Main Street America Assurance Company v. Connolly Contractors, Inc., et al., 19-4241, E.D. Pa., 2020 U.S. Dist. LEXIS 213229).

  • November 16, 2020

    Judge Says Underlying Claim Alleges Property Damage Caused By An Occurrence

    SAN DIEGO — A California federal judge on Nov. 12 denied a commercial property insurer’s motion to dismiss breach of contract and bad faith claims asserted by an insured after determining that an underlying dispute arising out of incomplete renovations to a leased property alleges property damage caused by an occurrence (La Roca Christian Communities International Inc. v. Church Mutual Insurance Co., No. 20-1324, S.D. Calif., 2020 U.S. Dist. LEXIS 211654).

  • November 16, 2020

    Excess Insurer Says Defects Coverage Dispute Should Proceed To Arbitration

    NEW YORK — An excess insurer claims in an Oct. 27 complaint filed in New York state court that an insured seeking coverage for underlying constructions defects claims should be ordered to arbitrate its claim for coverage pursuant to the policy’s terms (Lexington Insurance Co., et al. v. Lennar Corp., No. 655703/2020, N.Y. Sup.).

  • November 10, 2020

    Insurance Coverage Suit Stayed Pending Construction Defects Case’s Resolution

    NEW ORLEANS — A federal judge in Louisiana on Nov. 5 chose to stay rather than dismiss an insurance coverage dispute pending the resolution of an underlying lawsuit over alleged defects in a residential condominium building (HDI Global Specialty SE v. Lakeview Construction & Development, LLC, et al., No. 20-1670, E.D. La., 2020 U.S. Dist. LEXIS 206920).

  • November 09, 2020

    Pollution Endorsement Must Be Construed Against Professional Liability Insurer

    CINCINNATI — The Sixth Circuit U.S. Court of Appeals Nov. 5 affirmed a district court’s ruling that a pollution coverage endorsement in a professional liability insurer’s policy is ambiguous because there are the conflicts and inconsistencies in the endorsement that must be construed in the insured engineering and construction firm’s favor (Allied World Surplus Lines Insurance Company v. Richard Goettle Inc., Nos. 20-3339, 20-3394, 6th Cir., 2020 U.S. App. LEXIS 35147).

  • October 15, 2020

    COMMENTARY: Construction Defect Claims: A 2020 Update Part I

    By Thomas F. Segalla, Michael T. Glascott, Ashlyn M. Capote, Adam R. Durst, Sean P. Hvisdas and Jason E. Rusche

  • November 04, 2020

    Insurer:  No Coverage For $1.25M Damages From Mold Caused By Faulty Roof Work

    JACKSON, Miss. — There is no coverage for homeowners’ damages of $1.25 million caused by water damage and mold resulting from a faulty roof installation, an insurer alleges in an Oct. 30 complaint, citing various policy exclusions, including “expected or intended injury” and pollution (National Trust Insurance Company v. Reed’s Metals, Inc., et al., No. 20-204, S.D. Miss.).

  • November 04, 2020

    No Coverage For Faulty Work To French Drain System, Insurer Says

    PHILADELPHIA — Atain Insurance Co. filed a complaint on Oct. 30 in a Pennsylvania federal court alleging that it has no duty to defend or indemnify for damages in excess of $100,000 caused by an insured’s alleged defective workmanship in a new French drain system (Atain Insurance Company v. Basement Waterproofing Specialist Inc., No. 20-5440, E.D. Pa.).

  • November 03, 2020

    S.C. High Court Upholds Ruling Barring Insurers From Intervening In Defects Suits

    COLUMBIA, S.C. — The South Carolina Supreme Court on Oct. 21 sustained a trial court judge’s ruling denying a motion filed by nine insurance companies seeking to intervene in four construction defects lawsuits, finding that the companies have aright to contest coverage under commercial general liability policies issued to Centex Homes in subsequent declaratory judgment actions.

  • November 03, 2020

    Insurers:  Reimbursement Should Be Made For BP’s Faulty Pipe Suit Settlement

    LOS ANGELES — A commercial general liability insurer and an umbrella insurer filed suit  Nov. 2 in a California federal court seeking reimbursement from a pipe manufacturer for their settlement of BP America Production Co.’s defective pipe products lawsuit (American Home Assurance Company, et al. v. Ameron International Corporation, No. 20-10049, C.D. Calif.).

  • November 02, 2020

    Insurer Breached Duty To Defend Damages From Leaks, Federal Magistrate Judge Says

    OAKLAND, Calif. — A commercial general liability insurer breached its contractual duty to defend a window manufacturer regarding property damage caused by leaks from windows that were installed in a mixed-use residential community, a California federal magistrate judge held on Oct. 29 granting partial summary judgment to the manufacturer (Ply Gem Industries Inc. v. James River Insurance Company, No. 20-2475, N.D. Calif., 2020 U.S. Dist. LEXIS 203137).

  • October 29, 2020

    Hawaii Federal Judge:  No Insurance Coverage For Faulty Work To Pond, Residence

    HONOLULU — Allegations of a contractor’s faulty work on a pond and residential structures do not constitute an “occurrence” under a commercial general liability insurance policy, a Hawaii federal judge ruled Oct. 28, finding that the insurer owes no coverage (Nautilus Insurance Company v. RMB Enterprises, Inc., No. 19-00496, D. Hawaii, 2020 U.S. Dist. LEXIS 200468).

  • October 28, 2020

    No Coverage Owed For Water Damage Caused By Faulty Workmanship

    OKLAHOMA CITY — A homeowners insurer did not breach its contract or act in bad faith in denying a water damage claim caused by a leak in the heating, ventilation and air conditioning system’s condensate drainpipe because the policy’s exclusion for faulty workmanship or defective design applies as a bar to coverage, an Oklahoma federal judge said Oct. 23 (Tammy Covington, et al. v. CSAA Fire and Casualty Insurance Co., et al., No. 19-718, W.D. Okla., 2020 U.S. Dist. LEXIS 197486).

  • October 22, 2020

    Insurer Owes Coverage For Settlement Of Construction Defects Case, Panel Finds

    CHICAGO — An insurer of two subcontractors on a residential condominium complex project has a duty to defend and indemnify a general contractor and a developer’s insurer for settling a construction defects case, an Illinois appeals panel ruled Oct. 19, also finding that prejudgment interest was properly awarded (West Bend Mutual Insurance Company v. Trapani Construction Company, Inc., No. 1-19-1772, Ill. App., 1st Dist., Div. 1, 2020 Ill. App. Unpub. LEXIS 1783).

  • October 21, 2020

    Judge Compels Arbitration Of Rain-Damage Claims Under ‘Broad’ Clause

    NEW ORLEANS — A federal judge in Louisiana on Sept. 29 denied a construction company and property owner’s motions to remand a lawsuit seeking more than $1.3 million from their insurers to state court and granted the insurers’ motion to compel arbitration of the dispute, ruling that the “broad” language of the insurance coverage’s arbitration clause encompassed all of the insureds’ claims, including its bad faith state law claims (Woodward Design + Build, LLC, et al. v. Certain Underwriters At Lloyd's London, et al., No. 19-14017, E.D. La. 2020 U.S. Dist. LEXIS 178799).

  • October 20, 2020

    Insured’s Property Damage Suit Must Be Remanded To Oklahoma State Court

    TULSA, Okla. — An insured’s suit seeking coverage for storm-related damages and alleging claims for breach of contract and bad faith against two insurers must be remanded to Oklahoma state court because diversity of citizenship does not exist, an Oklahoma federal judge said Oct. 16 (Regent Preparatory School of Oklahoma v. Travelers Property Casualty Company of America, et al., No. 20-0512, N.D. Okla., 2020 U.S. Dist. LEXIS 192073).