Mealey's Construction Defects Insurance

  • June 06, 2019

    Panel: Insurer Not Relieved Of Duty Based Upon Care, Custody, Control Exclusion

    SAN DIEGO — A California appeals panel on June 5 reversed a lower court’s ruling that an insurer had no duty to defend a general contractor in a construction defect case based upon the exclusion in an additional insured endorsement for damage to “property in the care, custody or control of the additional insured” (McMillin Homes Construction Inc. v. National Fire & Marine Insurance Co., No. D074219, Calif. App., 4th Dist., Div. 1, 2019 Cal. App. LEXIS 514).

  • June 05, 2019

    Federal Judge Dismisses Insurer’s Defects Coverage Case To Avoid Duplication

    PHOENIX — An Arizona federal judge on May 31 dismissed an insurer’s coverage dispute concerning defects in repair work to a deck for a condominium association because it “would avoid needless determination of state law issues” (Houston Specialty Insurance Co. v. Providence Builders Inc., et al., No. 18-01297, D. Ariz., 2019 U.S. Dist. LEXIS 92403).

  • June 04, 2019

    Claims, Counterclaims In Insurance Coverage Dispute Are Not Ripe, Judge Says

    DENVER — In a coverage dispute over a $2.4 million judgment in an underlying construction defects case, a Colorado federal judge on May 30 dismissed third-party statutory and common-law bad faith counterclaims against an insurer as well as the insurer’s declaratory relief claim because the underlying matter is not ripe for review (Auto-Owners Insurance Co. v. Bolt Factory Lofts Owners Association Inc., et al., No. 18-01725, D. Colo., 2019 U.S. Dist. LEXIS 90196).

  • May 30, 2019

    Panel: Insurance Policy Excludes Damage Caused By Faulty Workmanship

    TOPEKA, Kan. — Claims for damages caused by negligent wiring in a generator are not covered under a homeowners insurance policy, a Kansas appeals panel affirmed May 24, finding that the policy excludes faulty workmanship (Stephen M. Deters, et al. v. Nemaha-Marshall Electric Cooperative Association Inc., et al., No. 119,200, Kan. App., 2019 Kan. App. LEXIS 33).

  • May 30, 2019

    Judge:  Insurer Has Duty To Defend Engineering Firm Against Negligent Design Suit

    CINCINNATI — An Ohio federal judge on May 28 held that a professional liability insurer has a duty to defend its engineering and construction firm insured against an underlying lawsuit alleging negligent design, negligent construction and breach of contract but stayed the indemnification issue pending resolution of the underlying action (Allied World Surplus Lines Insurance Company v. Richard Goettle, Inc., No. 17-670, S.D. Ohio, 2019 U.S. Dist. LEXIS 88545).

  • May 29, 2019

    Panel Reverses $1.9M Judgment Against Insurer On Breach Of Contract Cross-Claim

    HARTFORD, Conn. — In an opinion officially released May 28, a Connecticut appeals court panel reversed and remanded a lower court’s $1.9 million judgment against an insurer, finding that the builder’s risk insurance policy’s "Defects, Errors, And Omissions" exclusion unambiguously bars coverage for the insured’s more than $4 million loss to replace approximately 1,800 windows that were damaged during a building renovation (Viking Construction, Inc. v. 777 Residential, LLC, et al., No. AC 41450, Conn. App., 2019 Conn. App. LEXIS 216).

  • May 29, 2019

    Judge Awards Default Judgment To Insurer In Defect Coverage Dispute

    CHARLOTTE, N.C. — Citing insureds’ failure to notify of construction defect cases, a federal judge in North Carolina on May 23 granted a default judgment to an insurer in its declaratory judgment action concerning coverage (Pennsylvania National Mutual Casualty Insurance Co. v. JJA Construction Inc., et al., No. 18-00266, W.D. N.C., 2019 U.S. Dist. LEXIS 86637).

  • May 28, 2019

    Alabama High Court:  No ‘Occurrence’ Caused By Insured’s Faulty Work

    MONTGOMERY,Ala. — An arbitrator did not find that homeowners suffered damages because of an “occurrence” caused by an insured’s faulty workmanship, the Alabama Supreme Court held May 24, reversing a lower court’s ruling that the insured was entitled to coverage and indemnification under a commercial general liability insurance policy (Nationwide Mutual FireInsuranceCo. v. The David Group Inc., No. 1170588, Ala. Sup., 2019 Ala. LEXIS 52).

  • May 23, 2019

    Judge Vacates Trial Date After Finding Insurer’s Expert’s Testimony Unreliable

    SOUTH BEND, Ind.— A federal judge in Indiana on May 20 vacated a trial in a suit brought by an insurance company against a subcontractor that installed furnaces in a building’s roof trusses shortly before the roof partially collapsed after finding that the testimony proffered by the company’s structural engineering expert was unreliable (Affinity Mutual Insurance v. Thacker Air Conditioning-Refrigeration-Heating Inc., No. 16-CV-279 JD, N.D. Ind., 2019 U.S. Dist. LEXIS 84713).

  • May 21, 2019

    Exclusions Serve To Bar Insurance Coverage For Pipeline Damage, Judge Says

    TUCSON, Ariz. — An insured contractor is not entitled to coverage for repairs to pipeline damage in a water main collector system, an Arizona federal judge ruled May 16, because exclusions combine to preclude coverage the property damage (Sunwestern Contractors Inc. v. Cincinnati Indemnity Co., No. 16-00649, D. Ariz., 2019 U.S. Dist. LEXIS 82642).

  • May 21, 2019

    2nd Circuit Upholds Dismissal Of Insureds’ Complaint In Defective Concrete Suit

    NEW YORK — The Second Circuit U.S. Court of Appeals on May 16 affirmed a district court’s dismissal of an amended complaint filed by insureds seeking damages as a result of defective concrete used in their home’s foundation because the insureds failed to carry their burden of proving that coverage is afforded under the policy and that the insurer acted in bad faith when it denied their claim (Joseph Mazzarella, et al. v. Amica Mutual Insurance Co., No. 18-1269, 2nd Cir., 2019 U.S. App. LEXIS 14719).

  • May 17, 2019

    No Defense, Indemnity Owed For Construction Defect Cases, Insurer Says

    BOSTON — Citing a “damage to your work” exclusion, an insurer seeks declarations on May 9 from a Massachusetts federal court that it has no duty to defend or indemnify two construction defect cases (Union Insurance Co. v. Gengel C & S Builders Inc., et al., No. 19-11075, D. Mass.).

  • May 13, 2019

    Judge Grants, Denies Motions To Dismiss Insurers’ Claims Over 52 Defects Lawsuits

    LOS ANGELES — Addressing whether claims meet the $75,000 amount-in-controversy requirement, a California federal judge on April 26 granted and denied in part motions to dismiss insurers’ claims for declaratory relief, equitable reimbursement and accounting relating to the cost of defending more than 52 construction defects cases (The Travelers Indemnity Company of Connecticut, et al. v. Pulte Group, Inc., et al., No. 18-08994, C.D. Calif., 2019 U.S. Dist. LEXIS 74861).

  • May 07, 2019

    Insurer Cites ‘Your Work’ Exclusion To Deny Coverage For Construction Defect Case

    TAMPA, Fla. — A commercial general liability insurer in an May 2 complaint seeks a declaratory judgment from a Florida federal court that it owes no coverage for an underlying construction defect action based upon the application of the “damage to property” and “your work” exclusions (Mt. Hawley Insurance Co. v. Adams Homes of Northwest Florida Inc., et al., No. 19-01069, M.D. Fla.).

  • May 06, 2019

    Panel Remands Question Over Broader Duty To Defend Homeowners Insurer

    ATLANTA — The 11th Circuit U.S. Court of Appeals on May 1 remanded to a trial court the question of whether a contractors policy or an umbrella policy imposed a broader duty to defend against claims seeking to hold a homeowners insurer liable for its own acts arising out of a contractor’s alleged errors in remediation work (Liberty Mutual Fire Insurance Co. v. State Farm Florida Insurance Co., No. 18-11652, 11th Cir., 2019 U.S. App. LEXIS 13161).

  • May 02, 2019

    West Virginia High Court: No Insurance Coverage Under Contractual Liability Exclusion

    CHARLESTON, W.Va. — Six commercial general liability insurers have no duty to defend or indemnify a builder with regard to alleged construction defects in a shopping center, the West Virginia Supreme Court of Appeals affirmed May 1, finding that the contractual liability exclusion precludes coverage (J.A. Street & Associates Inc. v. Bitco General Insurance Corp., et al., No. 17-0079, W.Va. Sup., 2019 W. Va. LEXIS 205).

  • May 01, 2019

    Majority Upholds Rulings In Favor Of 5 Excess Insurers In Construction Defect Dispute

    BATON ROUGE, La. — A Louisiana appeals court majority on April 29 affirmed and amended in part a lower court’s rulings favorable to five excess insurers with respect to an underlying construction defect dispute, finding that an arbitration award and prior settlements were admissible as evidence for purposes of determining the insurers’ liability (M&R Drywall Inc. v. MAPP Construction LLC, et al., No. 2017 CA 0186 c/w No. 2017 CA 0187 c/w No. 2017 CA 0188, La. App., 1st Cir., 2019 La. App. LEXIS 762).

  • April 30, 2019

    Judge Declines To Dismiss Insurer’s Coverage Dispute Over Water Damage

    TAMPA, Fla. — A Florida federal judge on April 26 denied motions by three insurers to dismiss an insurance coverage action regarding a determination on the priority of coverage for water damage sustained as a result of alleged construction defects (Amerisure Insurance Co., et al., v. FCCI Insurance Co., et al., No. 18-3042, M.D. Fla., 2019 U.S. Dist. LEXIS 70460).

  • April 29, 2019

    Judge Realigns Insureds As Plaintiffs In Coverage Case Over Defect Claims

    CHARLESTON, S.C. — A South Carolina federal judge on April 22 granted an insurer’s motion to realign its insureds and additional insureds as plaintiffs in a homeowners association’s declaratory judgment action concerning coverage for an underlying construction defect case (Fenwick Commons Homeowners Association Inc. v. Pennsylvania National Mutual Casualty Insurance Co., et al., No. 19-00057, D. S.C., 2019 U.S. Dist. LEXIS 67580).

  • April 22, 2019

    Judge: Insured’s Failure To Resolve Construction Defects Was Not An ‘Occurrence’

    HANNIBAL, Mo. — Because the ability to resolve alleged construction defects was within an insured’s control, a Missouri federal judge ruled April 17 that the failure to fix the defects was not an “occurrence” under an insurance policy (American Family Mutual Insurance Co. v. Mid-American Grain Distributors LLC, et al., No. 18-51, E.D. Mo., 2019 U.S. Dist. LEXIS 66633).