Mealey's Construction Defects Insurance
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February 03, 2021
Judge Dismisses Insurer’s Suit Over Coverage For Construction Defects
GULFPORT, Miss. — A federal judge in Mississippi on Feb. 1 dismissed without prejudice an insurer’s declaratory judgment lawsuit against a contractor and a couple accusing the contractor of construction defects, finding that the court should abstain from presiding over the case after the homeowners amended a state court lawsuit to assert claims against the insurer.
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February 01, 2021
Developer Dropped From Insurer’s Suit Over Duty To Defend Against Builder’s Suit
PHOENIX — A federal judge in Arizona on Jan. 19 dismissed without prejudice a defendant developer in a declaratory judgment lawsuit brought by its insurer and allowed a homebuilder to file a third-party complaint against the developer’s insurance carriers.
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February 01, 2021
Insurers’ Duty To Defend Contractor Can Be Determined In State Court, Judge Says
KANSAS CITY, Kan. — A declaratory judgment lawsuit brought by two insurance companies seeking an order that they are not required to provide a defense to a contractor accused of defective work and breach of contract was dismissed by a federal judge in Kansas on Jan. 27 after he found that the dispute can be resolved in a garnishment petition filed by the defendant and counterclaimant contractor in Missouri state court.
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February 01, 2021
Insurer Has No Duty To Indemnify Roofer For Improperly Installed Roof
WILLIAMSPORT, Pa. — A federal judge in Pennsylvania on Jan. 25 granted an insurance company’s motion for judgment on the pleadings after finding that it has no duty to indemnify a roofing company for a $492,023.40 judgment entered against the roofer in a homeowner’s action over the improper installation of a roof, holding that the claim was subject to a policy issued in 2012, when the roof began leaking after the work, and that the damages did not constitute an occurrence under the policy because the work was performed by a subcontractor.
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January 28, 2021
11th Circuit: Insurer Not Required To Pay Contractor For Estimated Repairs
ATLANTA — The 11th Circuit U.S. Court of Appeals on Jan. 26 affirmed rulings awarding summary judgment to an insurer and denying a contractor’s motion to stay the lawsuit pending the appraisal of Hurricane Irma damage to an apartment complex, finding that the insurer was not required under a policy issued to a homeowners association to pay the contractor the estimated $4.9 million it would cost to replace the buildings because the contractor did not complete repairs and waived its request for an appraisal.
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January 28, 2021
Insurer Sues Carpentry Subcontractor Over Loss Of Use, Defective Work
BURBANK. Calif. — A subrogee insurer for a construction contractor on Jan. 20 filed a lawsuit in California state court against a carpentry subcontractor, claiming that the subcontractor’s defective work at a mixed-used commercial/residential building and inability to complete the work it was hired to do at a mixed use commercial/residential project resulted in more than $3 million in damages from loss of use.
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January 28, 2021
Magistrate Recommends Denying Insurer’s ‘Premature’ Motion For Default Judgment
AUSTIN, Texas — A federal magistrate in Texas on Jan. 15 recommended denying without prejudice English underwriters’ motion for a default judgment against their insured in their lawsuit disputing coverage for an underlying action and a separate arbitration proceeding seeking more than $1 million in damages from alleged defects in a gated community of 300 detached condominiums, finding that a default judgment would prejudice another insurer and could result in inconsistent judgments.
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January 25, 2021
Judge: Insured Unable To Show Building Damage Was Solely Caused By Hurricane
HOUSTON — A federal judge in Texas on Jan. 19 awarded summary judgment to an insurer that denied a company’s claim for damages that allegedly resulted from Hurricane Harvey, finding that the insured failed to provide any evidence showing that defects in the construction and repair of the building’s roof were not the actual cause for water intrusion .
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January 14, 2021
Federal Judge Grants Subcontractor Default Judgment Against Insurer
ALBUQUERQUE, N.M. — A New Mexico federal judge granted an insured subcontractor’s motion for a default judgment on Jan. 8, holding that the subcontractor was entitled to a declaratory judgment that its insurer has a duty to defend it in underlying litigation over alleged construction defects in a courthouse building.
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January 14, 2021
Insurer Granted Ruling In Overflowing Toilet Damage Dispute By New York Justice
NEW YORK — Coverage for water damage from an overflowing toilet was barred by a policy’s water exclusion endorsement, as well as the insured building owner’s failure to preserve the water-damaged sheetrock and flooring, a New York justice held Dec. 10 in granting summary judgment to the insurer.
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January 14, 2021
Judge: Builder Is Additional Insured; Insurer Must Defend It In Stucco Suit
ORLANDO, Fla. — In an order filed Dec. 12, a federal judge in Florida awarded summary judgment to KB Home Orlando LLC (KB Orlando), finding that it is an additional insured to a stucco subcontractor’s policy and that the insurance company must defend the general contractor in a lawsuit brought by a homeowners association over alleged defects in the installation of the stucco.
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January 13, 2021
Kentucky Federal Judge Declines Jurisdiction Over Roof Repair Coverage Suit
LONDON, Ky. — A Kentucky federal judge declined jurisdiction on Dec. 30 over an insurer’s action against its insured regarding coverage for $876,700 in roof repair costs sought in an underlying action, holding that a variety of factors weighed in favor of allowing a state court to resolve the insurance coverage questions.
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January 13, 2021
Policy Does Not Cover ‘Soft Costs’ For Additional Insureds, Federal Judge Says
DENVER — The owners of a building whose construction was delayed by water damage were not entitled to coverage for “soft costs” as additional named insureds under a policy issued to the general contractor, a Colorado federal judge held Dec. 31, granting partial summary judgment to the insurer.
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January 13, 2021
Judge Says Evidence Supports Insurer’s Defense Regarding Pre-existing Roof Defects
FORT MYERS, Fla. — A federal judge in Florida on Dec. 18 denied in part a motion for partial summary judgment and to strike an insurance company’s affirmative defenses filed by the assignee of an insured who was denied coverage for damages stemming from Hurricane Irma, finding that the insurer provided sufficient evidence to support its defense that defects in repairs to a building’s roof may have been present before the storm.
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January 13, 2021
Plumbing Subcontractor Awarded Summary Judgment In Insurers’ Roof Collapse Suit
KANSAS CITY, Mo. — A federal judge in Missouri on Dec. 23 denied a plumbing subcontractor’s motion to reconsider his ruling denying its motion for summary judgment based on the waiver of subrogation clauses in lease agreements between a landlord and two tenants of a warehouse whose property was damaged as a result of a roof collapse but found that the subcontractor was entitled to summary judgment on claims brought by insurers that provided policies to the tenants based on the acceptance doctrine because the building’s owner approved of the plumbing subcontractor’s installation of the roof’s drainage system.
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January 13, 2021
Judge Orders Arbitration Of Payment Obligations For Defense In Defects Suit
NEW YORK — A federal judge in New York on Dec. 23 ordered Wynn Las Vegas LLC and a general contractor to arbitrate their payment obligations to Wynn’s insurer for the defense it provided in a lawsuit over an improperly installed sprinkler system, finding that the insurer’s request is subject to the arbitration provision in the policy’s payment agreement.
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January 13, 2021
Insurer Says Homeowners’ Claims Against Contractor Not Covered Under Policy
ALLENTOWN, Pa. — An insurer says in a lawsuit filed in the U.S. District Court for the Middle District of Pennsylvania on Dec. 31 and transferred to the Eastern District of Pennsylvania on Jan. 4 that it is not required to provide a defense to a contractor accused of construction defects, arguing that the claims arose before it issued a policy to the contractor and that the claims are precluded from coverage.
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January 12, 2021
Appeals Court Finds Faulty Workmanship Exclusion Unambiguous, Includes Process
MIAMI — A Florida appeals court on Dec. 23 affirmed a ruling awarding summary judgment to an insurance company in a dispute over its denial of coverage to a woman whose home was damaged when a contractor was remodeling the home, holding that the faulty workmanship exclusion in her all-risk insurance policy was unambiguous and included the process the contractor implemented when performing the work.
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January 11, 2021
Insurer Files Suit Saying It Has No Duty To Defend In Defects Suits
PHILADELPHIA — An insurer filed a declaratory judgment lawsuit in federal court in Pennsylvania on Jan. 6 seeking an order stating that it has no duty to defend parties involved in a construction defects lawsuit filed in New Jersey state court over damages resulting from the allegedly improper installation of stucco, explaining that the work was performed before it issued policies to the general contractor and that the claims are excluded from coverage based on language in the policies.
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January 11, 2021
Insurers Say Pollution Exclusions Bar Coverage For Fiberglass Insulation Dispersal
TULSA, Okla. — No coverage is owed for an underlying suit alleging that an insured’s negligent installation of a heating and air conditioning system caused fiberglass insulation to contaminate a home because the total pollution exclusion endorsements in the insured’s primary and umbrella insurance policies bar coverage, the insurers contend in a Jan. 8 complaint filed in Oklahoma federal court.