Mealey's Construction Defects Insurance
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June 22, 2018
‘Damage To Your Work’ Exclusion Does Not Relieve Insurer’s Duty, Judge Says
SEATTLE — A commercial general liability insurer has a duty to defend insureds in a construction defects lawsuit, a Washington federal judge ruled June 21, finding that the “damage to your work” exclusion does not apply (The Cincinnati Specialty Underwriters Insurance Co. v. Milionis Construction Inc., et al., No. 17-00341, E.D. Wash., 2018 U.S. Dist. LEXIS 104182).
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June 21, 2018
Coverage May Exist; Policy Covers Collapse Caused By Hidden Decay, Judge Says
BRIDGEPORT, Conn. — An insurer’s motion to dismiss a complaint filed by insureds seeking coverage for their cracking foundation walls caused by a chemical reaction in the concrete must be denied because a possibility for coverage exists as the policy at issue provides coverage for collapse caused by hidden decay and defective construction materials, a Connecticut federal judge said June 20 (Mark C. Maki, et al. v. Allstate Insurance Co., No. 17-1219, D. Conn., 2018 U.S. Dist. LEXIS 102708).
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June 21, 2018
Faulty Work Exclusion Does Not Apply To Insured’s Loss, Magistrate Judge Says
BOISE, Idaho — A faulty workmanship exclusion does not preclude coverage for an insured’s repair costs, an Idaho federal magistrate judge ruled June 18, granting summary judgment to an insured on its breach of contract claim and awarding it $177,431.99 (Engineered Structures Inc. v. Travelers Property Casualty Company of America, No. 16-00516, D. Idaho, 2018 U.S. Dist. LEXIS 102822).
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June 20, 2018
Insurer Appeals Ruling On Duty To Indemnify Default Judgment For Defects
LOS ANGELES — In a dispute between two insurers over the duty to indemnify a default judgment in a construction defects case against an insured, one insurer argues to a California appeals court in a May 25 brief that the other cannot prevail against it in a direct action because the default judgment is void and not covered (The Insurance Company of the State of Pennsylvania v. American Safety Indemnity Co., No. B283684, Calif. App., 2nd Dist., Div. 8).
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June 20, 2018
Native Alaskan Village Sues Contractor Over Work Done On Hydroelectric Plant
ANCHORAGE, Alaska — A Native Alaskan village and its council say in a June 18 federal court lawsuit that a construction company owes the village $450,000 for shoddy work done and then left unrepaired on the village’s hydroelectric plant (Native Village of Chignik Lagoon v. Orion Marine Contractors, Inc., et al., No. 3:18-cv-00140, D. Alaska).
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June 20, 2018
‘Your Product’ Exclusion Bars Coverage For Costs To Repair Insured’s Units
MINNEAPOLIS — Costs to repair and replace an insured’s insulating glass units (IGUs) are precluded by the “your product” exclusion, a Minnesota federal judge ruled June 18, granting and denying in part summary judgment to an insurer (National Union Fire Insurance Company of Pittsburgh, PA v. Viracon Inc., No. 16-482, D. Minn., 2018 U.S. Dist. LEXIS 101449).
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June 20, 2018
Insurers Allege Equitable Contribution Claim For 7 Construction Defects Cases
LOS ANGELES — Four insurers filed an equitable contribution complaint on June 13 in a California federal court against another insurer for coverage of seven underlying construction defects cases (Travelers Property Casualty Company of America, et al. v. Lexington Insurance Co., No. 18-05232, C.D. Calif.).
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June 20, 2018
Judge: Couple Can Pursue Contract Claim Against Insurer Over Cracked Concrete
NEW HAVEN, Conn. — A couple can pursue a claim for breach of contract against their insurer for its denial of coverage to repair cracks in the concrete of the basement walls of their home, a federal judge in Connecticut ruled June 6, finding that the damage to the plaintiffs’ home could have arose before 2006 when their policy provided coverage for losses stemming from the collapse of a building (Stephen Rosenberger, et al. v. Amica Mutual Insurance Co., No. 17-cv-612, D. Conn., 2018 U.S. Dist. LEXIS 95345).
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June 19, 2018
Judge: No Coverage For Insured’s Costs From Nondefective Repairs
SALT LAKE CITY — Two insurers owe no coverage to an insured contractor for costs incurred from repairing nondefective parts of construction projects as a result of the process to remove and replace a subcontractor’s nonconforming lumber, a Utah federal judge ruled June 18 (Big-D Construction Midwest LLC v. Zurich American Insurance Co., No. 16-952, D. Utah).
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June 19, 2018
Insurers Ask U.S. High Court Question In Dispute Over Faulty Workmanship
WASHINGTON, D.C. — Insurers petitioned the U.S. Supreme Court on June 6 to answer a question in a dispute in which a federal appellate court predicted how a state high court would rule over whether a subcontractor’s 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., 2018 U.S. S. Ct. Briefs LEXIS 2279).
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June 18, 2018
Contractual Liability Exclusion Does Not Bar Coverage, Arizona High Court Affirms
PHOENIX— The Arizona Supreme Court on June 14 found that a homeowners insurance policy’s “contractual liability” exclusion does relieve an insurer of its duty to defend its builder-vendor insured against an underlying negligent excavation claim arising from rockslide damage, finding that the negligence allegation arises from the common-law duty to construct a home as a reasonable builder would (Dennis E. Teufel v. American Family Mutual Insurance Company, et al., No. CV-17-0190-PR, Ariz. Sup., 2018 Ariz. LEXIS 187).
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June 18, 2018
Judge Certifies Question On Collapse In Insureds’ Breach Of Contract Suit
HARTFORD, Conn. — In a breach of contract dispute over coverage for cracking in a basement, a Connecticut federal judge certified on June 15 a question to the state’s high court on what constitutes “substantial impairment of structural integrity” for purposes of applying a collapse provision in a homeowners insurance policy (Steven L. Vera, et al. v. Liberty Mutual Fire Insurance Co., No. 16-72, D. Conn., 2018 U.S. Dist. LEXIS 100548).
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June 11, 2018
3rd Circuit: Insurer Has No Duty To Defend, Indemnify Faulty Workmanship Claim
PHILADELPHIA — A commercial general liability insurer has no duty to defend or indemnify faulty workmanship allegations against an insured subcontractor for problems experienced by a condominium development, the Third Circuit U.S. Court of Appeals ruled June 6, because the faulty work is not covered as an “occurrence” (Lenick Construction Inc. v. Selective Way Insurance, 16-1891, 3rd Cir., 2018 U.S. App. LEXIS 15197).
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June 6, 2018
Insureds, Insurer Accuse Contractor Of Faulty Work On Solar Panel System
WILMINGTON, Del. — Homeowners and their insurer filed an amended complaint on June 1 in a Delaware trial court against a general contractor allegedly responsible for the defective installation of a solar panel system for their home (Domenic P. DiStefano, et al. v. KW Solar Solutions Inc., et al., No. N16C-11-015, Del. Super.).
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June 6, 2018
Judge Stays Association’s Suit To Appraise Damage Caused By Burst Sprinkler
MIAMI — A condominium association’s lawsuit against its insurer seeking to recover the full cost of damages it claimed resulted from a sprinkler pipe rupture was stayed by a federal judge in Florida on May 24, finding that a provision in the policy allows for the damage to be appraised (Almeria Park Condominium Association Inc. v. Empire Indemnity Insurance Co., No. 18-20609-CIV-ALTONAGA/Goodman, S.D. Fla., 2018 U.S. Dist. LEXIS 88260).
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June 5, 2018
Iowa High Court Reverses Rejection Of $1.4M Appraisal Award In Hailstorm Dispute
DES MOINES, Iowa —The Iowa Supreme Court on June 1 reversed a lower court’s judgment that rejected a $1.4 million appraisal award in favor of a townhome association insured for its hailstorm damage, remanding for the lower court to address the extent of pre-existing shingle damage excluded from coverage through the insurance policy's anti-concurrent-cause provision (Walnut Creek Townhome Association v. Depositors Insurance Company, No. 16-0121, Iowa Sup., 2018 Iowa Sup. LEXIS 57).
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June 5, 2018
Texas High Court Declines To Hear Case Over Insurer’s Judgment For Water Damage
AUSTIN, Texas — The Texas Supreme Court on June 1 refused to rehear its denial of a petition to review a lower court’s reversal of an insurer’s take-nothing judgment in a homeowners’ action seeking coverage for damages to their home’s foundation and in directing a verdict on their breach of contract claim (State Farm Lloyds v. Charles R. Allen, et al., No. 17-0912, Texas Sup.).
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June 5, 2018
Judge Finds Fact Issues In Excess Coverage Dispute Over $9M Defects Judgment
DENVER — Genuine issues of material fact exist on whether an excess insurance policy covers a $9 million construction defects judgment, a Colorado federal judge ruled June 1, denying summary judgment on breach of contract and bad faith claims (Hansen Construction Inc., et al. v. Everest National Insurance Co., No. 16-02902, D. Colo., 2018 U.S. Dist. LEXIS 92944).
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June 1, 2018
No Coverage Owed For Suit Over Subdivision, California Panel Affirms
SAN DIEGO — A California appeals panel on May 29 affirmed a lower court’s ruling that an insurer has no duty to defend or indemnify its general contractor insured against an underlying lawsuit arising from the unsuccessful development of a 16-home residential subdivision (THV Investments, LLC v. Certain Underwriters at Lloyds of London, et al., No. D073601, Calif. App., 4th Dist., Div. 1, 2018 Cal. App. Unpub. LEXIS 3671).
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May 31, 2018
Judge: Exclusions Do Not Apply To Bar Man’s Bad Faith, Contract Claims
PITTSBURGH — An insurance company’s request for summary judgment on a man’s claims for breach of contract and bad faith was denied by a federal judge in Pennsylvania May 11 after the judge found that exclusions in the man’s commercial line policy were inapplicable and the claim adjuster did not know Pennsylvania law when denying the claim (Jim Burgunder v. United Specialty Insurance Co., No. 17-1295, W.D. Pa., 2018 U.S. Dist. LEXIS 79477).