JACKSONVILLE, Fla. — A commercial general liability insurer has a duty to defend an additional insured in a construction defects case, a Florida federal judge ruled July 12; however, the judge stayed the issue of the insurer’s duty to indemnify (Auto-Owners Insurance Co. v. Environmental House Wrap Inc., et al., No. 17-817, M.D. Fla., 2019 U.S. Dist. LEXIS 115898).
By David B. Robbins and Jason M. Crawford
HOUSTON — In a dispute over the construction of a public library, a Texas federal judge held July 12 that commercial general liability insurance policies cover only an arbitration award for the costs of repairing or replacing ceiling tiles, not for repairing or replacing a roof or exterior stucco and, thus, granted in part summary judgment to the insurer (Liberty Surplus Insurance Corp. v. Century Surety Co., et al., No. 18-1444, S.D. Texas, 2019 U.S. Dist. LEXIS 116093).
OKLAHOMA CITY — An insurer is not entitled to summary judgment on the issue of coverage and fails to establish that any policy exclusions preclude coverage for an underlying construction defects case, an Oklahoma federal judge ruled July 12, also denying summary judgment to the insurer on an insured’s bad faith counterclaim (Country MutualInsuranceCo. v. AAA Construction LLC, No. 17-486, W.D. Okla., 2019 U.S. Dist. LEXIS 115935).
NEW ORLEANS — In an unpublished per curiam opinion, a Fifth Circuit U.S. Court of Appeals panel on July 9 ruled that a federal district court did not err in dismissing a third-party claimant’s insurance bad faith lawsuit against an insurer because the claimant was not an insured under a professional liability policy (Team Contractors LLC v. Waypoint Nola LLC v. Catlin Insurance Co. Inc., No. 18-30419, 5th Cir., 2019 U.S. App. LEXIS 20317).
JACKSONVILLE, Fla. — A subcontractor’s commercial general liability insurer failed to establish that the amount-in-controversy requirement has been met, a Florida federal judge held July 8, dismissing the insurer’s declaratory judgment lawsuit against its insured, a contractor and homeowners regarding coverage for stucco damages (Southern-Owners Insurance Co. v. Maronda Homes Inc. of Florida, et al., No. 18-1305, M.D. Fla., 2019 U.S. Dist. LEXIS 112528).
LOS ANGELES — An insurer alleges in a July 3 complaint filed in a California federal court that a consulting group and others are responsible for a retail mall project’s property damages arising out of soil settlement caused by their faulty workmanship (Ironshore Specialty Insurance Co. v. Kling Consulting Group Inc., No. 19-05787, C.D. Calif.).
CHARLESTON, S.C. — In a July 3 complaint, a commercial general liability insurer seeks a declaration from a South Carolina federal court that it has no duty to defend or indemnify claims arising out of construction defects because the “property damage” fell outside the policy period or is excluded (Main Street America Assurance Co. v. Orellana Stucco Contractor LLC, et al., No. 19-1906, D. S.C.).
ROCKVILLE, Conn. — A Connecticut judge on May 31 denied a homeowners insurer’s motion to strike bad faith and unfair settlement practices claims after determining that the insureds, who are seeking coverage for the deterioration of their home’s foundation walls, stated sufficient facts in support of the claims (Rhonda Prucker, et al. v. American Economy Insurance Co., et al., No. CV186013630S, Conn. Super., Tolland Jud. Dist., 2019 Conn. Super. LEXIS 1530).
CHICAGO — The Seventh Circuit U.S. Court of Appeals on June 27 affirmed a lower federal court’s ruling that a professional liability insurer has no duty to indemnify an insured for a $1.3 million default judgment entered in favor of a condominium association in an underlying construction defects lawsuit (Essex Insurance Company v. Blue Moon Lofts Condominium Association, et al., Nos. 18-3443 and 18-3530, 7th Cir., 2019 U.S. App. LEXIS 19174).
PORTLAND, Ore. — An insurer filed a complaint on June 26 in an Oregon federal court, seeking a declaration that it has no duty to defend or indemnify an underlying arbitration demand arising out of deficiencies in repair work performed by an insured (Allied World Surplus Lines Insurance Co. v. NW Building Forensics LLC, et al., No. 19-01001, D. Ore.).
BOISE, Idaho — A contractor filed a declaratory judgment action on June 25 in an Idaho federal court, seeking coverage as an additional insured under commercial general liability insurance policies issued to subcontractors for an underlying case alleging water intrusion to an apartment building (Steed Construction Inc. v. Auto-Owners Insurance Co., No. 19-00238, D. Idaho).
MIAMI — Insurers owed no duty to defend an insured for underlying suits stemming from the collapse of a pedestrian bridge because the policies’ professional service exclusion clearly bars coverage for the claims arising out of the insured's work on the pedestrian bridge, a Florida federal judge said June 24 (The Travelers Indemnity Co., et al. v. FIGG Bridge Engineers Inc., et al., No. 18-22585, S.D. Fla., 2019 U.S. Dist. LEXIS 106116).
MISSOULA, Mont. — An insurer has a duty to defend underlying claims under the mixed action rule, a Montana federal judge held June 20; however, it has no duty to indemnify for liquidated damages, breach of warranty, Montana Consumer Protection Act and emotional distress claims because factual issues bar summary judgment on the duty to indemnify (Atlantic Casualty Insurance Co. v. Peggy Quinn, et al., No. 18-76, D. Mont., 2019 U.S. Dist. LEXIS 103566).
LAS VEGAS — A developer sued 11 commercial general liability insurers on June 17 in a Nevada federal court, asserting breach of contract and bad faith claims for their failure to defend it as an additional insured in two underlying construction defect cases (Centex Homes v. Financial Pacific Insurance Co., et al., No. 19-01034, D. Nev.).
VERNON, Conn. — A Connecticut judge on May 30 determined that no coverage is afforded under three homeowners policies for the cracking of the insured’s basement walls as a result of the use of defective concrete; however, the judge said a question of fact exists as to whether coverage is afforded under a fourth homeowners policy (Joseph Dinardo, et al. v. Pacific Indemnity Co., et al., No. CV-16-6010979-S, Conn. Super., Tolland Jud. Dist., 2019 Conn. Super. LEXIS 1206).
SAN ANTONIO — Reconsidering a prior ruling in favor of coverage, a Texas federal judge on June 13 ruled that an insurer has no duty to defend a contractor against allegations arising from cracking in a swimming pool because a breach of contract exclusion applies to both the contract and negligence claims asserted against insureds (Mt. Hawley Insurance Co. v. Slay Engineering/Texas Multi-Chem/Huser Construction, No. 18-00252, W.D. Texas).
LOS ANGELES — A general contractor’s insurer sued a subcontractor’s insurer on June 14 in a California federal court, asserting claims for declaratory relief and equitable contribution regarding coverage for an underlying construction defect case against the general contractor and subcontractor (Kinsale Insurance Co. v. HDI Global Specialty SE, No. 19-05219, C.D. Calif.).
ST. LOUIS — A majority of the Eighth Circuit U.S. Court of Appeals on June 14 affirmed a lower federal court’s ruling that an excess insurer owes a designer and manufacturer insured $2.76 million for an underlying $6 million settlement of an underlying product liability lawsuit involving defective air ducts, rejecting the excess insurer’s argument that the lower court improperly interpreted the batch clause endorsement (National Union Fire Insurance Company of Pittsburgh, PA, et al. v. Donaldson Company Inc. v. Federal Insurance Co., No. 18-1063, 8th Cir., 2019 U.S. App. LEXIS 17897).
COLUMBIA, S.C. — Addressing a certified question in an insurance bad faith action against an insurer for its failure to defend an insured in a construction defect action, the South Carolina Supreme Court on June 12 answered in the negative and held that “denying liability and/or asserting good faith in the answer does not, standing alone,” waive the attorney-client privilege for claim files (Mt. Hawley Insurance Co. v. ContraVest Inc., et al., No. 2018-001170, S.C. Sup., 2019 S.C. LEXIS 53).