Mealey's Construction Defects Insurance
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April 19, 2019
Insurer Sues Insured Over Defense, Indemnity Duties In Construction Defects Case
MOBILE, Ala. — A commercial general liability insurer in an April 16 complaint seeks a declaration from an Alabama federal court that it has no duty to defend or indemnify a construction defects case because faulty work claims do not constitute an “occurrence” and exclusions apply to preclude coverage (Axis Insurance Co. v. LT Maintenance Inc., No. 19-00196, S.D. Ala.).
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April 19, 2019
Insurer Granted Default Judgment On Duty To Defend, Indemnify For Defects Case
SEATTLE — A commercial general liability insurer has no duty to defend or indemnify a construction defects case, a Washington federal judge ruled April 16, granting in part a default judgment in favor of the insurer (Developers Surety and Indemnity Co. v. Woodland Park Townhomes LLC, No. 18-1206, W.D. Wash., 2019 U.S. Dist. LEXIS 65108).
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April 17, 2019
Judge: Residential Developments And Condominium Exclusion Bars Insurer’s Duty
SAN FRANCISCO — A residential developments and condominium exclusion relieves a commercial general liability insurer of any duty to defend to contractors in an underlying breach of contract dispute involving a condominium project, a California federal judge ruled April 15 (Colony Insurance Co. v. Mt. Hawley Insurance Co., et al., No. 18-00519, N.D. Calif., 2019 U.S. Dist. LEXIS 64407).
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April 16, 2019
8th Circuit Affirms $1M Judgment In Favor Of General Contractor’s Surety
ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on April 12 affirmed a lower federal court’s $1,020,000 judgment in favor of a general contractor’s surety for the full amount of a subcontractor’s surety performance bond in a dispute over costs arising from the subcontractor’s default in completing a federal government construction project (United States of America for the use of Wesco Distribution, Inc. v. Liberty Mutual Insurance Company, No. 18-1455, 8th Cir., 2019 U.S. App. LEXIS 10919).
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April 16, 2019
2nd Circuit Issues Amended Orders In Connecticut Collapse Coverage Suits
NEW YORK — The Second Circuit U.S. Court of Appeals on April 15 issued amended summary orders in two separate cases filed by homeowners who seek coverage for deteriorating and cracking basement walls in Connecticut homes, reiterating that the policies’ collapse provision does not provide coverage for the defective foundation walls because there was no sudden and accidental collapse as required by the policies (Glenn R. Carlson, et al. v. Allstate Insurance Co., No. 17-3501, 2019 U.S. App. LEXIS 10948; Alan D. Lees, et al. v. Allstate Insurance Co., No. 18-007, 2nd Cir., 2019 U.S. App. LEXIS 10949).
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April 16, 2019
Subcontractor Insurers Owe Defense To Contractor In Defects Dispute, Judge Says
RALEIGH, N.C. — Two subcontractor insurers owed a duty to defend a general contractor as an additional insured and as primary, noncontributory insurers in an underlying construction defects case, a North Carolina federal judge ruled April 11, granting summary judgment to the general contractor’s insurers (Westfield Insurance Co. v. Weaver Cooke Construction LLC, et al., No. 15-00169, E.D. N.C., 2019 U.S. Dist. LEXIS 62208).
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April 15, 2019
Panel: Insurance Policy’s ‘Your Work’ Exclusion Does Not Apply To Ongoing Operations
ATLANTA — Finding that the “your work” exclusion does not apply to property damage caused during ongoing operations, the 11th Circuit U.S. Court of Appeals on April 11 vacated and remanded a ruling that a commercial general liability insurer has no duty to defend or indemnify a construction defects case based on that exclusion (Southern-Owners Insurance Co. v. MAC Contractors of Florida LLC, et al., No. 18-13040, 11th Cir., 2019 U.S. App. LEXIS 10689).
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April 11, 2019
Insurer Sues Insurer Over Duty To Mutual Insured In Construction Defects Cases
HOUSTON — An insurer sued another insurer on April 10 in a Texas federal court, seeking a declaration of defense obligations for a mutual insured in underlying construction defects cases (Navigators Specialty Insurance Co. v. First Mercury Insurance Co., No. 19-1304, S.D. Texas).
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April 09, 2019
Not Just 1 Interpretation Of ‘Decay’ Under Insurance Policy, Appeals Panel Says
SEATTLE — A trial judge erred in concluding that the only reasonable interpretation of “decay” under an insurance policy is one that indicates some kind of decomposition of the material, a Washington appeals panel held April 8, reversing the entry of summary judgment to an insurer in a coverage dispute following a partial collapse of an insured’s building (Feenix Parkside LLC v. Berkley North Pacific, et al., No. 77303-8-I, Wash. App., Div. 1, 2019 Wash. App. LEXIS 823).
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April 08, 2019
Insurer’s Negligence, Breach Of Warranty Claims Survive Summary Judgment
BOSTON — Fact issues remain on a subrogated insurer’s negligence and breach of warranty claims based on an alleged manufacturing defect in a heating system, a Massachusetts federal judge ruled April 4, denying summary judgment on these claims (Arbella Mutual Insurance Co. v. Field Controls LLC, et al., No. 16-10656, D. Mass., 2019 U.S. Dist. LEXIS 58319).
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April 08, 2019
Subcontractor Insurers Have No Duty To Defend Faulty Work Claims, Judge Finds
PENSACOLA, Fla. — Two subcontractor insurers have no duty to defend a general contractor against defective work allegations, a Florida federal judge held March 30, addressing summary judgment motions raised by several insurers, including the subrogated insurer to the general contractor, over their liability (BITCO National Insurance Co. v. Old Dominion Insurance Co., et al., No. 17-262, BITCO National Insurance Co. v. Southern-Owners Insurance Co., et al., No. 17-326, N.D. Fla., 2019 U.S. Dist. LEXIS 54908).
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March 29, 2019
COMMENTARY: Construction Defect Claims: A 2018 Update — Part 2
By Thomas F. Segalla, Michael T. Glascott, Ashlyn M. Capote and Brandon D. Zeller
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April 03, 2019
2nd Circuit: No Coverage Owed Under Collapse Provision For Cracking
NEW YORK — The Second Circuit U.S. Court of Appeals on April 2 affirmed three district court rulings in favor of a homeowners insurer in three separate cases seeking coverage for deteriorating and cracking basement walls in Connecticut homes after determining that the policies’ collapse provision does not provide coverage for the defective foundation walls because there was no sudden and accidental collapse as required by the policies (William A. Valls et al., v. Allstate Insurance Co., No. 17-3495, 2019 U.S. App. LEXIS 9596; Glenn R. Carlson, et al., v. Allstate Insurance Co., No. 17-3501, 2019 U.S. App. LEXIS 9586; Alan D. Lees et al., v. Allstate Insurance Co., No. 18-007, 2nd Cir., 2019 U.S. App. LEXIS 9585).
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April 03, 2019
Excess Insurer Denied Summary Judgment In Remanded Defective Reactors Suit
KANSAS CITY, Kan. — Following a reversal and remand of an insurance coverage dispute from the 10th Circuit U.S. Court of Appeals, a Kansas federal judge on March 29 denied an excess insurer’s motion for summary judgment as to whether certain policy exclusions precluded coverage for defective jet bubble reactors (JBRs) that were constructed by subcontractors, with the judge finding many of the insurer’s arguments foreclosed by the appeals court’s ruling (Black & Veatch Corp. v. Aspen Insurance [UK] Ltd., et al., No. 2:12-cv-02350, D. Kan., 2019 U.S. Dist. LEXIS 54021).
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April 02, 2019
Judge Issues Expert, Evidentiary Rulings Ahead Of Construction Defect Trial
MIAMI — A federal judge in Florida issued a slew of evidentiary and expert witness rulings on March 29 as an insurer defends claims that it improperly failed to defend its insured from construction defect claims (MI Windows & Doors LLC, et al. v. Liberty Mutual Fire Insurance Co., No. 14-3139, M.D. Fla., 2019 U.S. Dist. LEXIS 54058).
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April 02, 2019
Insured’s Foundation Damage Is Barred By Policy Exclusion, Federal Judge Says
BOSTON — A Massachusetts federal judge on March 31 found that a commercial general liability insurer has no duty to defend its construction company insured against an underlying lawsuit, finding that the damage to the insured’s foundation, whether an accident or not, falls under the scope of a policy exclusion (Mills Construction Corporation, Inc., et al. v. Nautilus Insurance Company, No. 18-10549, D. Mass., 2019 U.S. Dist. LEXIS 55256).
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April 01, 2019
Judge Grants Default Judgment To Insurer In Defects Coverage Dispute
CHARLOTTE, N.C. — A commercial general liability insurer was granted a default judgment against its insureds on March 25 by a North Carolina federal judge in its declaratory judgment lawsuit regarding two construction defect cases (Pennsylvania National Mutual Casualty Insurance Co. v. Jose Castillo, et al., No. 18-00271, W.D. N.C., 2019 U.S. Dist. LEXIS 49319).
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April 01, 2019
Magistrate Judge: No ‘Occurrence’ For Insured’s Damage To Equipment
ROANOKE, Va. — Because there was no “occurrence,” a Virginia federal magistrate judge on March 29 found that an insurer has no duty to defend or indemnify its insured for any award over damage to a piece of equipment the insured provided for a construction project (Western World Insurance Co. v. Air Tech Inc., No. 17-518, W.D. Va., 2019 U.S. Dist. LEXIS 53683).
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April 01, 2019
No Coverage Owed Under 2 Homeowners Policies For Cracking In Basement Walls
NEW HAVEN, Conn. — No coverage is afforded under two homeowners policies for cracking and deteriorating basement walls caused by the use of defective concrete because one of the policies includes an exclusion for cracking caused by the use of defective construction materials and the other policy provides coverage only for sudden and abrupt collapses, a Connecticut federal judge said March 29 (Frank V. Huschle, et al. v. Allstate Insurance Co., et. al., No. 18-248, D. Conn., 2019 U.S. Dist. LEXIS 53978).
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April 01, 2019
Judge Says Insurer Owes No Defense, Indemnity For Costs As No ‘Suit’ Was Filed
SAN DIEGO — A commercial general liability insurer has no duty to defend or indemnify insureds for costs incurred to investigate and repair alleged defects at a military training facility, a California federal judge ruled March 28, finding that no “suit” had been filed (Harper Construction Company Inc., et al. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 18-00471, S.D. Calif., 2019 U.S. Dist. LEXIS 53183).