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Mealey's Construction Defects Insurance

  • July 27, 2018

    Subcontractor Denied Judgment On Retainage Claim By Federal Judge

    PHILADELPHIA — Regarding a contractor’s retainage claim against a subcontractor and its sureties on a delayed project, a Pennsylvania federal judge ruled July 24 that the subcontractor cannot rely on a pay-if-paid clause because the subcontractor prevented the occurrence of a condition precedent regardless of whether its actions were deliberate (Connelly Construction Corp. v. Travelers Casualty and Surety Company of America, et al., No. 16-555, E.D. Pa., 2018 U.S. Dist. LEXIS 123009).

  • July 25, 2018

    No Coverage Owed For Cracking Of Basement Walls, Federal Judge Says

    HARTFORD, Conn. — An insurer has no duty to provide coverage to its insureds for the cracking of the concrete used in the home’s basement walls because the insureds failed to allege that a sudden or abrupt collapse occurred as required by policy’s collapse provision, a Connecticut federal judge said July 24 in granting the insurer’s motion to dismiss (Kenneth Andrew, et al. v. Allstate Insurance Co., No. 17-1192, D. Conn., 2018 U.S. Dist. LEXIS 123328).

  • July 24, 2018

    Subcontractor Opposes U.S. High Court Question In Case Over Faulty Workmanship

    WASHINGTON, D.C. — A subcontractor argues to the U.S. Supreme Court in a July 10 brief that there is no split on how federal appellate courts predict how a state high court would rule over whether faulty work that caused damage to an insured’s own work can constitute an “occurrence” (Aspen Insurance [UK] Ltd, et al. v. Black & Veatch Corp., No. 17-1662, U.S. Sup.).

  • July 24, 2018

    9th Circuit Affirms Award For HOA, Holds Fees Were Covered By Policy

    HONOLULU — The Ninth Circuit U.S. Court of Appeals on July 20 affirmed a trial court’s award of fees to a homeowners association (HOA), holding that fees incurred by property owners seeking coverage for damage caused by water leaks were within the scope of the policy (Association of Apartment Owners of The Moorings Inc. v. Dongbu Insurance Co., Ltd., No. 16-16666, 9th Cir., 2018 U.S. App. LEXIS 20251).

  • July 23, 2018

    Panel: Insurers Have No Duty To Indemnify Subcontractor’s Negligence

    SAN FRANCISCO — An agreement was void insofar as it provided that insurers were required to indemnify a subcontractor for its negligence, the Ninth Circuit U.S. Court of Appeals ruled July 20, upholding the entry of summary judgment to insurers against a county as assignee of the subcontractor’s claims (First Mercury Insurance Co., et al. v. Westchester Surplus Line Insurance Co., et al., No. 16-35888, 9th Cir., 2018 U.S. App. LEXIS 20253).

  • July 20, 2018

    Panel Enters Judgment In Favor Of Insurer In Defects Coverage Dispute

    LAKE CHARLES, La. — Reversing and remanding a lower court’s ruling, a Louisiana appeals panel on July 18 entered summary judgment in favor of an insurer and dismissed a third-party demand for the insurer’s alleged failure to provide coverage for defect claims (Shane Pierce, et al. v. Irma M. Rodriguez, et al., No. 17-681, La. App., 3rd Cir., 2018 La. App. Unpub. LEXIS 214).

  • July 20, 2018

    Panel Reverses Arbitration Ruling In Contract Dispute Against Contractor, Surety

    LAKELAND, Fla. — In a breach of contract dispute involving a contractor, subcontractor and a surety, a Florida appeals panel on July 18 reversed an order finding that an arbitration clause in a subcontract is void and unenforceable because if the Federal Arbitration Act (FAA) applies, it preempts a Florida statute (Sacshe Construction and Development Corp. v. Affirmed Drywall Corp., et al., No. 2D17-4276, Fla. App., 2nd Dist., 2018 Fla. App. LEXIS 9998).

  • July 18, 2018

    Insurer Has Standing To Pursue Declaratory Judgment Claim, Judge Says

    ALBUQUERQUE, N.M — A commercial general liability insurer has standing to assert a declaratory judgment claim against a condominium association in a coverage dispute over an underlying construction defects action, a New Mexico federal judge ruled July 16 (United Fire and Casualty Co. v. Caskey Drywall NM LLC, et al., No. 17-1108, D. N.M., 2018 U.S. Dist. LEXIS 117982).

  • July 18, 2018

    Ohio High Court Hears Arguments In Insurance Defective Work Dispute

    COLUMBUS, Ohio — The Ohio Supreme Court heard oral arguments on June 12 in a dispute between a commercial general liability insurer, a contractor and a university over whether coverage exists for damages sustained in a construction project as a result of allegedly defective work caused by subcontractors (Ohio Northern University v. Charles Construction Services Inc. v. The Cincinnati Insurance Co., No. 2017-0514, Ohio Sup.).

  • July 17, 2018

    Federal Judge Stays Coverage Suit Over Claims Cell Phone Tower Damaged Building

    SEATTLE — Exercising inherent authority, a Washington federal judge on July 13 paused T-Mobile Northeast LLC’s lawsuit seeking coverage for alleged damage caused by a cell phone tower to allow two related lawsuits to proceed (T-Mobile Northeast LLC v. Selective Insurance Company of America, No. 17-1289, W.D. Wash., 2018 U.S. Dist. LEXIS 117694).

  • July 17, 2018

    Judge Says Only 1 Insurer May Have To Cover Claim For Foundation Deterioration

    ROCKVILLE, Conn. — A Connecticut state judge on June 28 determined that only one of five insurers may have to provide coverage to insureds for the deterioration of the insureds’ basement walls as a result of the oxidization of the concrete used to construct the basement’s walls (Richard N. Dino, et al. v. Safeco Insurance Company of America, et al., No. CV166010428S, Conn. Super., 2018 Conn. Super. LEXIS 1262).

  • July 13, 2018

    Judge Orders Review Of Insurer’s Documents In Water Damage, Mold Suit

    SEATTLE — In a water damage and mold coverage suit concerning an insurer’s denial of investigation costs, a Washington federal judge on July 12 ordered an in camera review of documents provided by the insurer to determine whether attorney-client privilege applies (Market Place North Condominium Association v. Affiliated FM Insurance Co., No. 17-625, W.D. Wash., 2018 U.S. Dist. LEXIS 116381).

  • July 11, 2018

    Insurer Has Duty To Defend Professional Negligence Claim, Judge Says

    HOUSTON — Under the eight-corners rule, a professional liability insurer has a duty to defend a monastery’s professional negligence claim against an insured contractor, a Texas federal judge ruled July 10, granting partial summary judgment to the contractor and the monastery (Everest National Insurance Co. v. Gessner Engineering LLC, et al., No. 17-2981, S.D. Texas, 2018 U.S. Dist. LEXIS 113849).

  • July 10, 2018

    District Court Erred In Finding For Excess Insurer In Chinese Drywall Suit, Contractor Says

    ATLANTA — The 11th Circuit U.S. Court of Appeals should reverse a district court’s ruling in favor of an excess insurer in a Chinese drywall coverage dispute because the district court failed to apply to correct standard of law in finding that the excess insurer has no duty to indemnify, a contractor argues in a July 9 brief (American Home Assurance Co. v. Gryphon Construction LLC et al., No. 18-12031, 11th Cir.).

  • July 6, 2018

    Judge Denies Insurer’s Default Judgment Request In Defects Coverage Case

    JACKSONVILLE, Fla. — A Florida federal judge on July 3 denied a commercial general liability insurer’s motions for default judgment against a subcontractor and condominium association in a coverage dispute regarding an underlying construction defects case (Auto-Owners Insurance Co. v. Environmental House Wrap Inc., et al., No. 17-817, M.D. Fla.).

  • July 2, 2018

    Panel Affirms Insurer Breached Duty To Defend Negligent Work Lawsuit

    CHICAGO — A commercial general liability insurer breached its duty to defend a negligent construction work case, an Illinois appeals panel held June 29, finding that the insurer was estopped from denying liability for a default judgment (Country Mutual Insurance Co. v. Badger Mutual Insurance Co., No. 1-17-1774, Ill. App., 1st Dist., 6th Div., 2018 Ill. App. Unpub. LEXIS 1118).

  • June 29, 2018

    Judge: Insurer Has No Duty To Defend Claims Against Insured’s Work

    NEW YORK — A construction contractor exception to a professional liability exclusion does not apply because an insured was not contracted to perform any construction work, a New York federal judge ruled June 27, finding that an insurer had no duty to defend a professional negligence claim (Liberty Insurance Corp. v. WSP USA Inc., No. 17-4398, S.D. N.Y., 2018 U.S. Dist. LEXIS 107896).

  • June 28, 2018

    9th Circuit: 3 Deductibles Apply To Insured’s Construction Defects Claims

    SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on June 25 that only three deductibles and not 636 deductibles applied to an insured for claims arising out of three construction defects lawsuits (ProBuilders Specialty Insurance Company, RRG v. Yarbrough Plastering Inc., et al., Nos. 16-16952 & 16-17141, 9th Cir., 2018 U.S. App. LEXIS 17226).

  • June 27, 2018

    Magistrate Judge Rejects Insurer’s Dismissal Of Fraud, Breach Of Contract Claims

    AUSTIN, Texas — In a dispute over a performance bond, a Texas federal magistrate judge on June 26 recommended that an insurer’s motion to dismiss fraud and breach of contract claims be denied (Hunt Construction Group Inc. v. Cobb Mechanical Contractors Inc., et al., No. 17-215, W.D. Texas, 2018 U.S. Dist. LEXIS 106080).

  • June 22, 2018

    Judge: ‘Damage To Your Work’ Exclusion Bars Coverage For Insured’s Defects

    FORT MYERS, Fla. — An insurer has no duty to defend or indemnify a general contractor in an underlying construction defects case, a Florida federal judge ruled June 21, finding that the “damage to your work” exclusion precludes coverage (Southern-Owners Insurance Co. v. MAC Contractors of Florida LLC, et al., No. 18-21, M.D. Fla., 2018 U.S. Dist. LEXIS 103659).