Mealey's Construction Defects Insurance

  • June 02, 2021

    Split Colorado High Court Affirms Denial Of Insurer’s Intervention In Defects Suit

    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.

  • June 02, 2021

    10th Circuit Affirms Insurer’s Refusal To Defend Developer In Retaining Wall Suit

    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.

  • June 01, 2021

    Judge Refuses To Reconsider, Certify Ruling Allowing Builder’s Bad Faith Claim

    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.

  • June 01, 2021

    Claims Administrator: Builders’ Bad Faith Action Should Stay In Federal Court

    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.

  • June 01, 2021

    Association: Insurer Had Duty To Investigate Water Damage From Rain, Defects

    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.

  • June 01, 2021

    No Coverage Owed For Excessive Dust, Debris, Federal Judge Determines

    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.

  • May 27, 2021

    Judge: Breach Of Contract Exclusion Precludes Insurer From Defending Builder

    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.

  • May 25, 2021

    Magistrate: Roofer’s Withdrawal Of Defense Request Moots Insurer’s Suit

    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.

  • May 24, 2021

    Insurer Seeks To Unload Duty To Defend Contractor Over Firearms Store’s Defects

    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

  • May 24, 2021

    Insurer Says It Has No Duty To Defend Developers In Suit Over Landslides

    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.

  • May 21, 2021

    Subsequent Buyer’s Claims Over Faulty Floor Slab Not Covered, Insurer Says

    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.

  • May 18, 2021

    Roofing Company’s Suit Over Denied Defense Remanded Over Defective Removal

    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.

  • May 15, 2021

    Magistrate Says Court Should Abstain From Hearing Insurer’s Duty To Defend Suit

    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.

  • April 21, 2021

    COMMENTARY: Construction Defect Claims: A 2020 Update Part II

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

  • May 05, 2021

    Illinois Panel Upholds Dismissal Of Insurer’s Suit Over Defective Work

    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.

  • May 05, 2021

    Tennessee High Court: Contractor Cannot Pursue Claim Against Insurer

    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.

  • May 04, 2021

    Homebuilders Seek Remand Of Bad Faith Suit Over Insurers’ Failure To Repay

    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.

  • May 04, 2021

    Insurer Says Pollution Exclusion Bars Coverage For Storm Water Runoff Damage

    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.

  • April 28, 2021

    Judge Says Defects Suits Are Incongruent With Insurer’s Suit Against Homebuilder

    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.

  • April 27, 2021

    Contractor Sues Subcontractor, Insurers Over Cracking Of Fire Suppression Piping

    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.