Mealey's Construction Defects Insurance

  • August 27, 2020

    Judge:  No Covered Property Damage From Insured's Faulty Work For Nightclub

    LAS VEGAS — A contractor failed to allege property damage from negligent remodeling work at a Las Vegas nightclub that triggered an "occurrence," a Nevada federal judge ruled Aug. 25, dismissing breach of contract and bad faith claims against an insurer (Arizona Civil Constructors, Inc. v. Colony Insurance Company, et al., No. 20-10, D. Nev., 2020 U.S. Dist. LEXIS 154467).

  • August 25, 2020

    Insured Seeks Reversal Of Rulings In Construction Defects Coverage Dispute

    SANTA ANA, Calif. — An insured recently asked a California appeals court to reverse two summary judgments rulings in favor of a commercial general liability insurer and an insurance broker, arguing that the insurer failed to present compelling evidence or eliminate triable issues of material fact regarding whether rescission of the policy was warranted in a coverage dispute arising from a construction defects lawsuit (Michael Favreau v. Navigators Insurance Company, et al., Nos. G056718 and G056938, Calif. App., 4th Dist.).

  • August 25, 2020

    Insurers Breached Contract, Acted In Bad Faith Over 13 Defect Claims, Builders Say

    PHOENIX — Homebuilders sued three subcontractor insurers in Arizona federal court on Aug. 21 for breach of contract and bad faith for refusing to defend 13 construction defect claims and causing them to incur $542,000 in out-of-pocket defense costs (Centex Real Estate Construction Company, et al. v. Clarendon National Insurance Company, et al., No. 20-1640, D. Ariz.).

  • August 24, 2020

    10th Circuit:  Insurer's Claim Is Ripe Over $2.4M Judgment In Defects Case

    DENVER — The 10th Circuit U.S. Court of Appeals on Aug. 20 reversed the dismissal of an insurer's coverage dispute against an insured subcontractor and a condominium association regarding a $2.4 million judgment in a construction defects case because the insurer is entitled to a judicial determination (Auto-Owners Insurance Company v. Bolt Factory Lofts Owners Association, Inc., et al., Nos. 19-1233 and 19-1310, 10th Cir., 2020 U.S. App. LEXIS 26478).

  • August 18, 2020

    9th Circuit Reverses Ruling As To Application Of Faulty Workmanship Exclusion

    PORTLAND, Ore. — The Ninth Circuit U.S. Court of Appeals held Aug. 17 that a federal court erred in finding that a faulty workmanship exclusion does not preclude coverage for an insured's repair costs, finding that an ambiguity in the exclusion warrants reversal and remand (Engineered Structures, Inc. v. Travelers Property Casualty Company, No. 18-35588, 9th Cir., 2020 U.S. App. LEXIS 25994).

  • August 14, 2020

    Insurer's Case Over $4.7M Consent Decree For Home Defects Allowed To Proceed

    TALLAHASSEE, Fla. — A Florida federal judge on Aug. 12 refused to dismiss an insurer's case against a builder and homeowners concerning a $4.7 million consent decree over defects in hundreds of homes because demand letters and the consent decree "create an issue ripe for adjudication" (Kinsale Insurance Company v. PulteGroup, Inc., et al., No. 19-544, N.D. Fla.).

  • August 12, 2020

    Insurer:  No Coverage For Homeowner's Suit Over Swimming Pool Damage

    PHILADELPHIA — There is no duty to defend or indemnify a homeowner's breach of contract suit concerning the installation of an inground swimming pool because there is no "occurrence," an insurer alleges in an Aug. 10 complaint, also citing various business risk exclusions (Acuity v. Pools by Snyder, LLC, et al., No. 20-03888, E.D. Pa.).

  • August 11, 2020

    Insurer: No Coverage Exists Under 'Earth Movement' Exclusion

    BILLINGS, Mont. — Relying on an "earth movement" exclusion, Employers Mutual Casualty Co. (EMC) alleges in an Aug. 7 complaint in Montana federal court that it has no duty to defend or indemnify property damage caused by settlement of subsurface soils under a home (Employers Mutual Casualty Company v. S.D. Helgeson, Inc., et al., No. 20-123, D. Mont.).

  • August 10, 2020

    Insurer Has $250,000 Final Judgment Vacated Based On Incorrect Legal Standard

    ATLANTA — A lower court applied an incorrect legal standard in denying a subcontractor insurer's request to bar evidence of when damages to a home manifested based on the doctrine of issue preclusion, the 11th Circuit U.S. Court of Appeals held Aug. 7, vacating a $250,000 final judgment in a construction defects coverage dispute (Ronald Sellers v. Nationwide Mutual Fire Insurance Company, No. 18-15276, 11th Cir., 2020 U.S. App. LEXIS 24902).

  • August 07, 2020

    Insurer Seeks Reimbursement From Liberty Mutual For Defending HVAC Subcontractor

    NEWARK, N.J. — Charter Oak Fire Insurance Co. filed a declaratory judgment lawsuit against Liberty Mutual Fire Insurance Co. on Aug. 6 in federal court in New Jersey, saying the defendant insurer should reimburse it for the costs it spent on defending a subcontractor that worked on a building's allegedly faulty heating, ventilating and air conditioning (HVAC) system because it was covered under a policy issued to the general contractor that provided coverage to the subcontractor (Charter Oak Fire Insurance Co. v. Liberty Mutual Fire Insurance Co., No. 20-10105, D. N.J.).

  • August 07, 2020

    Judge Issues Judgment To Insured On Exclusions But Not 'Occurrence' Issue

    PRESCOTT, Ariz. — Genuine issues of material fact exist on whether an insured's claims are covered "occurrences" as damages resulting from subcontractor faulty workmanship, an Arizona federal judge ruled Aug. 4, but an insured is entitled to summary judgment with regard to application of four business risk exclusions relied upon by the insurer (United Specialty Insurance Company v. Dorn Homes Inc., No. 18-08092, D. Ariz., 2020 U.S. Dist. LEXIS 138431).

  • August 05, 2020

    5th Circuit:  Faulty Work Exclusion Bars Insurance For Window Damages

    NEW ORLEANS — An insurer owes no coverage for $686,976.88 in damages to the exterior glass of a Houston skyscraper because the claim falls within a faulty workmanship exclusion, the Fifth Circuit U.S. Court of Appeals ruled Aug. 3 (Balfour Beatty Construction, L.L.C., et al. v. Liberty Mutual Fire Insurance Company, No. 19-20216, 5th Cir., 2020 U.S. App. LEXIS 24544).

  • August 04, 2020

    Judge:  Insurer Fails To Allege Claim Against Another Insurer Over Defense Costs

    LOS ANGELES — A federal judge in California on July 30 dismissed, without leave to amend and with prejudice, The Travelers Indemnity Company of America's lawsuit against another insurer seeking to recover $159,876.20 in defense costs of a mutual insured against allegations that the insured negligently designed support piers for a building (The Travelers Indemnity Company v. The Hanover Insurance Company, No. 20-3513, C.D. Calif., 2020 U.S. Dist. LEXIS 136704).

  • August 03, 2020

    Insurer: No Coverage For $1.59M Arbitration Over Construction Defects

    LOS ANGELES — In a July 28 complaint, an insurer seeks a declaration from a California federal court of its obligations toward a $1.59 million underlying construction defects arbitration (Kinsale Insurance Company v. Josh D. Moorvitch, et al., No. 20-6750, C.D. Calif.).

  • July 30, 2020

    Judge Dismisses In Part Negligent Construction Insurance Coverage Case

    JASPER, Ala. — A federal judge in Alabama on July 29 dismissed as unripe an insurer's declaratory judgment claim on its duty to indemnify a negligent construction action but allowed the insurer to proceed on a similar claim regarding its duty to defend (Country Mutual Insurance Company v. James Gardner, et al., No. 20-23, N.D. Ala., 2020 U.S. Dist. LEXIS 134330).

  • July 29, 2020

    Builder:  Insurer Owed Coverage For $17.8M Judgment Over Defects

    LAS VEGAS — A subcontractor's insurer breached its contract and acted in bad faith by refusing to defend and indemnify allegations over defective home installation of eaves and soffits that resulted in a $17.8 million judgment, a homebuilder says in a July 24 complaint filed in a Nevada federal court (PN II, Inc. v. National Fire & Marine Insurance Company, No. 20-1383, D. Nev.).

  • July 29, 2020

    Magistrate:  No Insurance Coverage Owed For Faulty Roofing Sealant Installation

    MIAMI — A commercial general liability insurer has no duty to defend or indemnify an insured against a lawsuit seeking damages resulting from allegedly faulty installation of a roofing sealant, a Florida federal magistrate judge found July 27, recommending that summary judgment be entered in favor of the insurer (Atlantic Casualty Insurance Company v. Legacy Roofing of Flahead General Contractors & Restoration, LLC, et al., No. 19-22043, S.D. Fla., 2020 U.S. Dist. LEXIS 133700).

  • July 28, 2020

    Judge Finds No Damages Exist To Support Bad Faith Claim Against Excess Insurer

    CHARLESTON, S.C. — After previously finding no duty to defend or indemnify a $9 million construction defects settlement, a federal judge in South Carolina on July 27 ruled that an insured and a condominium association failed to show that they suffered consequential damages from an excess insurer's alleged breach of its duties of good faith and fair dealing (ContraVest Inc., et al. v. Mt. Hawley Insurance Company, No. 15-304, D. S.C., 2020 U.S. Dist. LEXIS 132495).

  • July 27, 2020

    Magistrate Judge Dismisses Subrogated Insurer's Suit Over Water Leak Damages

    BURLINGTON, Vt. — A Vermont federal magistrate judge on July 24 dismissed a subrogated insurer's negligence, breach of contract and breach of implied warranties suit against a property management company over water leaks in a condominium building (Country Mutual Insurance Company v. Altisource Online Auction, Inc., No. 19-74, D. Vt., 2020 U.S. Dist. LEXIS 131766).

  • July 24, 2020

    Magistrate Dismisses Bad Faith, Contract Counterclaims In Insurance Coverage Case

    OAKLAND, Calif. — A general contractor failed to allege breach of contract and bad faith counterclaims against its insurer in their coverage dispute over a condominium unit remodel project, a California federal magistrate judge held July 20 (Colony Insurance Company v. Glenn E. Newcomer Construction, No. 20-480, N.D. Calif., 2020 U.S. Dist. LEXIS 127448).