Lexis Legal News : Mealey's Construction Defects Insurance : Lawsuit Filings, Litigation, Settlements, Verdicts and Court News

Mealey's Construction Defects Insurance

March 01, 2019
Agreement Forecloses Insurer’s Negligence Claim Against Developer, Judge Rules

BOSTON — A Massachusetts federal judge on Feb. 26 held that a purchase and sale agreement for a 24-unit residential apartment building is enforceable and forecloses an insurer’s negligence claim against the property’s developer, granting the developer’s motion for summary judgment in the insurer’s subrogation lawsuit seeking recovery for the amount it paid for a water damage claim (Aspen American Insurance Company v. Covenant Fire Protection Inc., et al., No. 17-10221, D. Mass., 2019 U.S. Dist. LEXIS 29981).
February 28, 2019
Bad Faith Claim Cannot Be Alleged Against Insurers In Defective Concrete Dispute

BRIDGEPORT, Conn. — A Connecticut federal judge on Feb. 26 denied a motion to amend a complaint to add a bad faith claim against two homeowners insurers that denied the insureds’ coverage claim arising out of cracking in their basement walls caused by the use of defective concrete because Connecticut state courts have rejected bad faith claims against insurers who have denied coverage in similar suits (Dennis and Erica Moura v. Harleysville Preferred Insurance Co., et al., No. 18-422, D. Conn., 2019 U.S. Dist. LEXIS 29848).
February 27, 2019
Professional Liability Endorsement Covers Entire Judgment, Panel Says In Reversal

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Feb. 26 found that a commercial general liability insurance policy’s Professional Liability Endorsement (PLE) covers an entire underlying $1.6 million judgment against a contractor insured, reversing a lower court in part (Mid-Continent Casualty Company v. Petroleum Solutions, Incorporated, No. 17-20652, 5th Cir., 2019 U.S. App. LEXIS 5688).
February 26, 2019
1st Circuit: Policy’s Failure To Define Decay Warrants Coverage

BOSTON — A First Circuit U.S. Court of Appeals panel on Feb. 22 upheld a federal magistrate judge in Massachusetts’ ruling awarding summary judgment to an insured in a suit seeking a declaration that its insurer wrongfully denied coverage for damages resulting from a ceiling collapse, finding that ambiguity in the policy regarding the definition of the word “decay” warranted a finding in favor of the insured (Easthampton Congregational Church v. Church Mutual Insurance Co., No. 18-1881, 1st Cir., 2019 U.S. App. LEXIS 5273).
February 22, 2019
Judge: Ensuing Loss Clause Restores Coverage For Insureds’ Indemnity Claim

WILLIAMSPORT, Pa. — Under a builder’s “all-risk” insurance policy, an ensuing loss clause restores coverage to insureds’ indemnification claim despite a faulty workmanship exclusion, a Pennsylvania federal judge ruled Feb. 21 (Griggs Road, L.P., et al. v. Selective Way Insurance Company of America, No. 17-00214, M.D. Pa., 2019 U.S. Dist. LEXIS 27170).
February 20, 2019
Judge Grants Insurer’s Motion; Duty To Defend Damage Owed By Different Insurer

JACKSONVILLE, Fla. — A federal judge in Florida on Feb. 14 ruled in favor of Amerisure Insurance Co. in its declaratory judgment action against Landmark American Insurance Co. regarding the duty to defend a claim for damage from water intrusion on a construction project, ruling that the damage was an occurrence that took place when Landmark was the primary insurer (Amerisure Insurance Company v. The Auchter Company, et al., No. 15-235, M.D. Fla.).
February 20, 2019
Judge Dismisses Declaratory Judgment, Reformation Claims Against Insurers

CHARLESTON, S.C. — A South Carolina federal judge on Feb. 19 dismissed claims for declaratory judgment for unreasonable failure to settle, a violation of the South Carolina Unfair Trade Practices Act (SCUTPA) and reformation against insurers in a dispute over coverage for an underlying $33.8 million construction defects judgment (Church Creek Construction LLC, et al. v. Mt. Hawley Insurance Co., et al., No. 17-1339, D. S.C., 2019 U.S. Dist. LEXIS 25711).
February 14, 2019
No Indemnity Owed For $1.1M Arbitration Award For Defects, Insurer Says

AUSTIN, Texas — An insurer alleges in a Feb. 4 complaint filed in a Texas federal court that it does not owe an insured complete indemnity for an underlying $1.1 million arbitration award regarding damages from the insured’s construction work to a custom home (Mid-Continent Casualty Co. v. Zbranek & Holt Custom Homes Ltd., No. 19-00083, W.D. Texas).
February 14, 2019
No Coverage Owed For Mold Found In Attic Insulation, Insurer Says In Complaint

SALT LAKE CITY — No coverage is owed to an insured for an underlying claim alleging that the insured’s installation of attic insulation caused mold to develop in attics of condominium buildings because the policy’s fungi or bacteria exclusion clearly precludes coverage, the insurer says in a Feb. 7 complaint filed in Utah federal court (Cincinnati Specialty Underwriters Insurance Co. v. Green Property Solutions LLC, et al., No. 19-100, C.D. Utah).
February 13, 2019
Judge Declines To Resolve Arbitration Umpire Dispute Between Insurers, Insured

NEW YORK — A New York federal judge on Feb. 6 denied insurers’ request to appoint a neutral umpire and an insured’s request to disqualify two candidates as umpires in a coverage dispute concerning water damage to a Florida condominium building (Certain Underwriters at Lloyd’s, London, et al. v. Vintage Grand Condominium Association Inc., No. 18-10382, S.D. N.Y., 2019 U.S. Dist. LEXIS 22709).
February 11, 2019
Judge Denies Insurer’s Judgment Motion Based On Wrap-Up Exclusion

OAKLAND, Calif. — Because a subcontractor was not enrolled in a general contractor’s wrap-up policy, a California federal judge on Feb. 7 denied summary judgment to the subcontractor’s insurer on its duty to defend or indemnify the subcontractor against the contractor’s breach of contract claims concerning water damage to a project (Employers Mutual Casualty Co. v. Fast Wrap Reno One LLC, et al., No. 17-03837, N.D. Calif., 2019 U.S. Dist. LEXIS 20298).
February 08, 2019
Subcontractor Insurer’s Defense Of Defects Barred Under Exclusion, Judge Says

MIAMI — In a coverage dispute between a contractor’s insurer and a subcontractor’s insurer over the duty to defend a construction defects lawsuit on a primary and noncontributory basis, a Florida federal judge on Feb. 5 ruled that the subcontractor insurer’s policy precludes additional insured coverage under the completed-operations hazard exclusion (Scottsdale Insurance Co. v. Granada Insurance Co., No. 18-21207, S.D. Fla., 2019 U.S. Dist. LEXIS 19240).
February 07, 2019
No Duty To Defend Or Indemnify Construction Defects Case, Insurer Says

PHILADELPHIA — A commercial general liability insurer alleges in a Jan. 24 complaint filed in a Pennsylvania federal court that it has no duty to defend or indemnify a contractor and subcontractor in an underlying construction defects case (Seneca Specialty Insurance Co. v. Top Class Construction Inc., et al., No. 19-363, E.D. Pa.).
February 05, 2019
Judge Declines To Dismiss Subcontractor From Insurer’s Coverage Case Over Defects

ST. LOUIS — A Missouri federal judge on Feb. 1 denied an insured subcontractor’s motion to dismiss its insurer’s dispute regarding coverage for an underlying breach of contract and breach of express warranty case brought by homeowners (Great Lakes Insurance SE v. AMCO Insurance Co., et al., No. 18-631, E.D. Mo., 2019 U.S. Dist. LEXIS 16040).
February 04, 2019
Insured Must Reimburse Deductibles For Settlement Of Defects Suits, Panel Says

SAN DIEGO — A commercial general liability insurer showed that its insured must reimburse it $50,000 in deductibles for payments it made in settlement of two construction defects actions, a California appeals panel held Jan. 31 (Lexington Insurance Co. v. Timber Ridge Framing Inc., No. D073412, Calif. App., 4th Dist. Div. 1, 2019 Cal. App. Unpub. LEXIS 802).
February 01, 2019
Insured: Coverage Owed For Defective Concrete At 2 New Jersey Projects

NEWARK, N.J. — A commercial general liability insurer is responsible for paying damages for defective concrete delivered to two New Jersey projects, a concrete producer claims in its Jan. 30 complaint filed in New Jersey federal court (County Concrete Corp. v. Greenwich Insurance Co., No. 19-03449, D. N.J.).
February 01, 2019
Pennsylvania Federal Judge: Insurer Owes Defense For Products-Related Tort Claims

PHILADELPHIA — An insurer has a duty to defend two construction defect actions because there are sufficient allegations of products-related tort claims such that there may have been an “occurrence,” a Pennsylvania federal judge ruled Jan. 30 (Nautilus Insurance Co. v. 200 Christian Street Partners LLC, et al., Nos. 18-1364 & 18-1545, E.D. Pa., 2019 U.S. Dist. LEXIS 15060).
January 31, 2019
Oklahoma High Court Majority: Insured’s Water Damage Is Covered

OKLAHOMA CITY — An insurance policy covers damage to a school caused by the rupture of a water pipe beneath the school, a majority of the Oklahoma Supreme Court held Jan. 29, reversing the entry of summary judgment to an insurer (Oklahoma Schools Risk Management Trust v. McAlester Public Schools, No. 114553, Okla. Sup., 2019 Okla. LEXIS 2).
January 30, 2019
Subrogated Insurer Files Breach Of Contract Case, Seeks Defense Costs

DALLAS — A subrogated insurer sued another insurer on Jan. 7 in a Texas federal court asserting breach of contract and declaratory judgment claims and seeking recovery of costs in the defense of a mutual insured in an underlying construction defects lawsuit (Employers Mutual Casualty Co. v. Philadelphia Indemnity Insurance Co., No. 19-32, N.D. Texas).
January 30, 2019
Texas High Court Refuses To Review Coverage Suit Over Defective HVAC Units

AUSTIN, Texas — According to its Jan. 25 orders pronounced, the Texas Supreme Court denied an insurer’s petition for writ of mandamus seeking to clarify a party's right to object to an assigned judge when the party first learns of the assignment the day of the first hearing or trial, also lifting the stay of the coverage lawsuit over the installation of defective heating ventilation and air conditioning units (In re Union Insurance Co., No. 18-0353, Texas Sup.).