Mealey's Construction Defects Insurance
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February 25, 2022
Ruling For Insurer Stands In Damaged Roofs Suit, But Counterclaims To Proceed
DENVER — A federal magistrate judge in Colorado on Feb. 22 issued an order denying additional relief to a general contractor in an insurance dispute after previously vacating judgment to allow the contractor’s counterclaims to proceed and amended a December opinion and order to clarify that the grant of summary judgment for the insurer based on the determination that it has no duty to defend or indemnify the contractor related to claims based on damaged roofs “does not terminate the case.”
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February 24, 2022
North Dakota High Court: Damage To Insured’s Work Covered; Other Damage Not
BISMARCK, N.D. — A commercial general liability insurer must cover the cost of repairing and replacing a floor drain that was damaged when its insured improperly installed a concrete floor, but the policy does not cover the cost of replacing the floor or an in-floor heating system installed by another subcontractor, the North Dakota Supreme Court ruled Feb. 18, partly affirming and partly reversing a judgment ordering the insurer to pay the property owner $214,045.55.
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February 24, 2022
Parties Stipulate To Dismissal Of Iowa Water Damage Indemnification Suit
DES MOINES, Iowa — A contractor and its insurer on Feb. 18 stipulated to dismissal with prejudice of all claims in a federal dispute over coverage for $2 million in damages caused by faulty waterproofing at an Iowa inn and conference center after settling the matter.
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February 23, 2022
Federal Judge: Construction Defects Claims Are Not Covered ‘Occurrences’
PHILADELPHIA — A federal judge in Pennsylvania on Feb. 22 entered judgment for an insurer after finding that homeowners claims in three different matters of issues with their homes were claims for construction defects and were not “occurrences” covered by the subcontractor’s commercial general liability policy.
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February 22, 2022
Judge: Policy Exclusions Bar Coverage In Hotel Construction Contract Suit
SEATTLE — Exclusions in a contractor’s primary commercial general liability policy bar coverage for losses related to hotel construction delays and alleged water intrusion damages, and an umbrella policy does not apply, a Washington federal judge held Feb. 4, denying a project owner’s continuance motion and granting summary judgment to insurers.
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February 22, 2022
Federal Judge: Insurer Has Duty To Defend In Fire Mitigation System Defects Suit
SEATTLE — A commercial general liability insurer for a manufacturer of fire and explosion mitigation systems has a duty to defend its insured in an underlying action for alleged defective flame arresters, a Washington federal judge held Feb. 9, granting partial summary judgment for the insured and denying the insurer’s partial summary judgment motion.
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February 22, 2022
Judge Deems Some Documents Privileged In Coverage Row Over Bridge Defects
WASHINGTON, D.C. — Partly granting a motion to compel, a District of Columbia federal judge on Feb. 14 ruled that while many of the documents sought by a construction firm in an insurance coverage dispute constituted legal advice subject to attorney-client privilege, some documents withheld by the defendant insurer were nonprivileged facts or had been subject to a waiver of any privilege due to being shared with parties not connected with the coverage decision.
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February 18, 2022
Fact Issues Remain On Cause Of Damage To Supporting Beams, Judge Determines
SAN FRANCISCO — A California federal judge on Feb. 15 denied a motion for summary judgment filed by a builders risk insurer in a dispute over coverage for the cost of repairing fractured support beams after determining that questions of fact exist as to whether construction or design defects caused the fractures.
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February 18, 2022
Judge Dismisses Intervening Insurer’s Complaint Against Subcontractors’ Insurers
LEXINGTON, Ky. — The insurer of a general contractor lacks standing to bring an intervening complaint against the insurers of two subcontractors that the general contractor claims used a chemically incompatible cleaner on the chlorinated polyvinyl chloride piping (CPVC) of a mixed-use building during construction, causing leaks in the building’s sprinkler suppression and fire suppression systems, because “Kentucky is not a ‘direct action’ jurisdiction,” a federal judge in the commonwealth ruled Feb. 15, granting the subcontractors’ insurers’ motion to dismiss the intervening complaint against them.
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February 18, 2022
Judge: Lighting Manufacturer Can’t File Third-Party Complaint Against Contractor
BOSTON — The manufacturer of rope lighting that allegedly caused a fire in a home cannot file a third-party complaint against the contractor that initially installed the lighting and, later, performed renovations on the property in a homeowners insurer’s negligence and breach of warranty action against it because the claims are time-barred by the statute of repose and the manufacturer failed to allege that the contractor’s later work on the home is connected to the lighting that caused the fire, a federal judge in Massachusetts ruled Feb. 15.
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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