Mealey's Construction Defects Insurance
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February 17, 2022
Judge Won’t Reconsider Denial Of Summary Judgment In Concrete Slab Coverage Suit
DENVER — A federal judge in Colorado on Feb. 14 refused to reconsider her denial of an insurer’s motion for summary judgment in a breach of contract and bad faith case against it because there are disputed issues of material fact, including about what caused damage to a concrete slab at a condominium project and whether that cause falls within a policy exclusion, rejecting the insurer’s argument that she erred by “focusing on the concept of ‘cause.’”
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February 16, 2022
Magistrate: Attorney Fees Should Be Denied Absent Bad Faith Coverage Denial Acts
NEW YORK — A New York federal magistrate judge on Feb. 4 recommended denying a plaintiffs’ motion for attorney fees and costs, or a reduction in fees and costs if the court grants the motion, in an insurance coverage dispute related to an underlying construction defects suit over balconies at a 42-story condominium.
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February 16, 2022
Default Judgment Recommended For Insurer; No Duty To Defend In Water Damage Suit
MIAMI — Exclusions in a contractor’s primary commercial general liability policy and “material misrepresentations” in the policy application bar coverage for losses related to condominium roof repairs and alleged water intrusion damages, a Florida federal magistrate judge determined Feb. 7, issuing a recommendation to enter a default declaratory judgment that the insurer has no duty to defend or indemnify the insured in an underlying action for claims for negligence and breaches of contract, express and implied warranty.
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February 15, 2022
Texas High Court Finds Northfield Exception To 8-Corners Rule Is Permissible
AUSTIN, Texas — The exception to the “eight-corners rule” established by the Fifth Circuit U.S. Court of Appeals in Northfield Ins. Co. v. Loving Home Care, Inc. “is permissible under Texas law provided the extrinsic evidence (1) goes solely to the issue of coverage and does not overlap with the merits of liability, (2) does not contradict facts alleged in the pleading, and (3) conclusively establishes the coverage fact to be proved,” the Texas Supreme Court ruled Feb. 11, answering a certified question from the Fifth Circuit.
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February 15, 2022
Insured Contractor Claims Pollution Liability Insurer Breached Contract
NEW YORK — A construction manager claims in a Feb. 10 suit filed in New York court that its pollution liability insurer breached its contract and breached the implied duty of good faith and fair dealing by refusing to settle an underlying suit arising out of a release of asbestos-containing material.
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February 08, 2022
Judge Rules For Insurers In Subcontractor’s Coverage Suit Arising From Injuries
NEW YORK — A federal judge in New York on Feb. 3 found in favor of insurers in a subcontractor’s lawsuit seeking coverage for underlying claims that it caused underlying personal injuries at a construction site, finding that coverage is barred by a commercial general liability insurance policy’s unambiguous business risk and employer liability exclusions and a contractor's professional and pollution liability insurance policy’s nondisclosed known conditions and prior claims or incidents exclusions.
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February 03, 2022
Federal Judge: No Coverage Owed For Alleged Damage Occurring Before Policy Start
WEST PALM BEACH, Fla. — A federal judge in Florida on Jan. 19 granted an insurer’s summary judgment motion in a coverage dispute related to an underlying waterproofing construction defects action, finding that because the “occurrence” of the waterproofing company’s alleged defective work “was, at minimum, ‘in the process of occurring’ as of the start of the policy period, the consequent damage is plainly excluded from coverage under the Prior Occurrence and Pre-Existing Damage Exclusion.”
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February 03, 2022
Judge Says No Expert Witness Fees For Subcontractor In Construction Defects Suit
PORTLAND, Ore. — An Oregon federal judge on Jan. 10 granted a subcontractor’s supplemental motion for attorney fees and costs by adjusting the attorney fee award for duplicated work but declined to award expert witness fees in a dispute over coverage for construction defects in an apartment complex, finding that the subcontractor “established $138,210 of the requested $197,785 attorney fees was reasonably expended” and that the subcontractor failed to provide statutory authority for authorizing expert witness fees.
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February 02, 2022
Default Judgment Granted Over Contractor’s Insurance Application Misstatements
PITTSBURGH — A federal judge in Pennsylvania on Jan. 20 granted an insurer’s motion for default judgment in an insurance fraud dispute stemming from a contractor’s alleged material misrepresentations made in its application for insurance, ruling that the insurer has sufficiently pleaded that all necessary factors have been met in seeking such relief.
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January 31, 2022
COMMENTARY: When Does The Duty To Defend = The Duty To Indemnify?
By Robert M. Hall
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February 01, 2022
Judge Says Issues Of Fact Remain In Coverage Action Related To Tile Defects Suit
OAKLAND, Calif. — A California federal judge on Jan. 25 denied cross-motions for summary judgment in a breach of contract insurance action filed by an insurer against an additional insured subcontractor related to an underlying action against the subcontractor alleging defective tile installation at a housing development, finding that an issue of fact remains about whether the subcontractor violated the insurer’s “right to control the defense and thus breached the insurance policy.”
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February 01, 2022
Wisconsin Appeals Panel: Repose Statute Bars Negligent Home Construction Action
WAUSAU, Wis. — A Wisconsin appellate panel on Jan. 11 affirmed a circuit court’s order dismissing homeowners’ negligence and breach of contract claims in the homeowners’ action alleging improper installation of stone in their home’s original construction, finding that though claims arising from later repair work are not barred, the statute of repose bars negligence claims related to the original construction and the statute of limitations bars breach of contract claims related to the original construction.
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January 31, 2022
Judge Says Contractor Filing Tort Claims Indispensable In Related Coverage Action
ATLANTA — A Georgia federal judge on Jan. 18 denied a general contractor’s motion to dismiss in a declaratory judgment coverage action filed by an insurer seeking a determination that it owes no coverage in an underlying state court negligence suit related to alleged faulty exterior hotel construction, finding that the general contractor is an indispensable party in the declaratory judgment action because it brought tort claims against a subcontractor in the underlying suit.
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January 31, 2022
Editor’s Note
The journalists and staff of Mealey’s Litigation Reports are saddened by the passing of co-founder Michael P. Mealey. He was a respected member of the newsletter community, being named publisher of the year by the National Newsletter Association and president of the National Newsletter Association. Mike and Judy Mealey started Mealey Publications Inc. in 1984. As president, Mike grew the Mealey’s Litigation Report portfolio, introduced email news bulletins and electronic CD formats and launched a continuing legal education conference business. Mealey’s was sold to LexisNexis in 2000. We hope to carry on his journalistic curiosity and integrity in the titles we continue to publish today under his name.
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January 28, 2022
Trial Court Abused Discretion In Excluding Witness, Georgia Appeals Court Says
ATLANTA — A lower Georgia court erred in excluding an expert witness in a subrogation case in which an insurer is suing a construction company for gross negligence that led to a water damage claim that was settled for $1.3 million, a Georgia appeals court found Jan. 27, reversing summary judgment that was awarded to the construction company and its subcontractor.
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January 28, 2022
Magistrate OKs Deposition Topics Related To Overlooked Water Damage Exclusion
TACOMA, Wash. — Deposition topics related to a water damage exclusion that was inadvertently not included in a builders risk insurance policy are fair game, a Washington federal magistrate judge ruled Jan. 26, deeming the topics relevant to a contractor’s contractual and statutory claims over its insurer’s denial of claims related to damages sustained to two buildings under construction.
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January 27, 2022
Judge: Insurer Must Defend Sidewalk Contractor From Property Damage Claim
CHICAGO — A commercial general liability insurer must defend its sidewalk contractor insured against a construction company’s claims that its work in sealing a sidewalk damaged the sidewalk because the underlying complaint claims that the contractor caused damage to something other than its own work, a federal judge in Illinois ruled Jan. 24, granting summary judgment to the contractor.
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January 27, 2022
9th Circuit: Insurer Failed To Prove Exclusion Exception In Home Defects Suits
SAN FRANCISCO — In a pair of Jan. 20 rulings in related appeals over Ironshore Specialty Insurance Co.’s duty to defend in two construction defects lawsuits, the Ninth Circuit U.S. Court of Appeals reversed a district court’s final judgment in favor of Zurich American Insurance Co. and affirmed the court’s summary judgment ruling in favor of Ironshore, finding that Ironshore was entitled to final judgment and summary judgment because Zurich failed to prove the applicability of an exclusion exception.
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January 27, 2022
Glass Subcontractor, Condo Association Appeal Rulings, Judgment In Coverage Suit
DENVER — A glass subcontractor that installed allegedly faulty doors and windows at a condominium complex and the condo association on Jan. 13 indicated their intent to appeal to the 10th Circuit U.S. Court of Appeals various pretrial and trial rulings and the final judgment issued after a jury on Dec. 10 found that the subcontractor breached its duty to cooperate with the insurer.
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January 26, 2022
Colorado Federal Judge: Issues Of Fact Exist In Concrete Slab Coverage Suit
DENVER — A federal judge in Colorado on Jan. 24 denied an insurer’s motion for summary judgment in a breach of contract and bad faith case against it because there are disputed issues of material fact, including about what caused damage to a concrete slab at a condominium project and whether that cause falls within any exclusions in the insurance policy.