Mealey's Construction Defects Insurance
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January 13, 2022
2nd Circuit: N.J. Law Estops Insurer From Denying Professional Liability Coverage
NEW YORK — The Second Circuit U.S. Court of Appeals on Jan. 12 affirmed a lower federal court’s summary judgment ruling in favor of an insured in its lawsuit seeking professional liability insurance coverage for two underlying lawsuits arising from a New York city construction project, finding that the lower court properly applied the domicile-as-proxy rule finding that New Jersey law applied to the dispute.
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January 11, 2022
No Coverage Owed For Cracks Discovered In Basement Walls, Panel Says
HARTFORD, Conn. — A trial court did not err in granting summary judgment in favor of a homeowners insurer in a suit seeking coverage for cracks and foundation damage in a home’s basement walls caused by the use of defective concrete because there was no caving in or sudden falling in of the basement walls as required for coverage to exist under the policy’s collapse provision, a panel of the Connecticut Appellate Court said Dec. 28.
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January 11, 2022
No Coverage For Interior Water Damage; Insurer Granted Summary Judgment
DALLAS — No coverage is afforded under a commercial property insurance policy for interior water damage sustained at two apartment buildings as a result of inadequate tarping of the roofs that were being replaced because the policy clearly excludes coverage for interior water damage and faulty workmanship, a Texas federal judge said Dec. 29.
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January 07, 2022
Magistrate Recommends Partial Dismissal In Bad Faith Insurance Coverage Action
GALVESTON, Texas — A Texas federal magistrate judge on Dec. 21 recommended granting in part and denying in part an insurer’s motion for judgment on the pleadings in a breach of contract, breach of duty of good faith and fair dealing and Texas Insurance Code violations suit filed by a contractor seeking coverage for state court claims against it related to alleged defective condominium repairs, finding that Texas law provides no duty of good faith and fair dealing in third-party claims and that it is “premature” to dismiss the alleged Texas Code violation related to reasonable claim investigation.
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January 05, 2022
Judge: Prejudgment Interest Supported, No Self-Insured Retention In Defect Suit
SAN DIEGO — A California federal judge on Dec. 17 found that self-insured retentions (SIRs) do not apply to a general contractor’s recovery and that under Georgia law, prejudgment interest accrued from the due date of invoices, granting partial summary judgment to the general contractor in an insurance coverage action related to alleged defective home construction in underlying state court cases.
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January 05, 2022
Contract Breach Claim In Construction Defects Coverage Suit Survives Dismissal
LOS ANGELES — Finding it a “plausible factual allegation” that a subcontractor named in a construction defects action was a named insured under a developer’s wrap policy, a federal judge in California on Dec. 8 denied an insurer’s motion to dismiss a breach of contract claim filed against it by an assignee for the subcontractor.
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January 05, 2022
Federal Judge Realigns Subcontractors As Plaintiffs In Defects Coverage Suit
SPARTANBURG, S.C. — A South Carolina federal judge on Dec. 17 granted an insurer’s motion to realign subcontractor defendants as plaintiffs in a declaratory judgment action arising out of a construction defects suit, finding that “the Subcontractor defendants have the same interest” as the general contractor. The judge also denied the general contractor’s motion to remand to state court, finding that “the facts and circumstances of the case” weigh in favor of the federal court exercising jurisdiction.
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December 22, 2021
5th Circuit Panel: Insurer Has Duty To Defend Highway Project General Contractor
NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Dec. 14 reversed a district court’s judgment in a construction defects suit related to a highway construction project, finding that the subcontractor’s insurer owes a duty to defend the general contractor in its underlying litigation with the developer because “[t]he Developer’s claims against the Project’s general contractor implicate defective construction of the Project’s drainage systems.”
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December 22, 2021
Insurer Says Judge Correctly Held No Duty To Defend Against Third-Party Claims
SAN FRANCISCO — A district court correctly dismissed a breach of contract and bad faith suit related to alleged defective glass because the insurer had no duty to defend as the policy requires the insurer to defend only “suits,” not “non-litigated third-party claims” such as the claims in this case, the insurer says in a Dec. 8 answering brief in the Ninth Circuit U.S. Court of Appeals.
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December 20, 2021
No Coverage Owed For Release Of Asbestos, Federal Judge Determines
SEATTLE — No coverage is owed for asbestos contamination caused by a subcontractor’s work in an elementary school because the damages caused by the release of asbestos-containing materials are clearly precluded by an asbestos exclusion in the insurers’ policies, a Washington federal judge said Dec. 14 in granting the insurers’ motion for partial summary judgment.
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December 16, 2021
Colorado Federal Judge Grants Insurer Summary Judgment In Insurance Coverage Suit
DENVER — A Colorado federal magistrate judge on Dec. 2 granted an insurer’s motion for summary judgment and issued a final judgment on Dec. 3 in an insurance coverage suit filed against a general contractor seeking coverage for damaged roofs, finding that the insurer did not have a duty to defend or indemnify because a demand letter sent by the owner of the buildings with damaged roofs to the general contractor did not constitute a suit under the insurance policy.
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December 16, 2021
Federal Judge Grants Summary Judgment In Negligence Suit Against Home Manufacturer
BOSTON — A Massachusetts federal judge on Dec. 3 granted summary judgment to a mobile home manufacturer in a negligence suit filed by a homeowner’s insurer and subrogee following a fire originating in a mobile home’s electrical wiring, finding that the statute of repose applies because the manufacturer’s construction of the home was considered “an improvement to real property” and that the insurer’s contention that the manufacturer was “a mere supplier of electrical connector devices is without merit."
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December 14, 2021
Court Dismisses Professional Liability Coverage Dispute After Settlement Announced
PORTLAND — In a Dec. 8 docket entry, a federal court in Oregon dismissed an insured’s breach of contract and bad faith lawsuit seeking professional liability insurance coverage for an underlying negligence lawsuit arising from the insured’s architectural designs for a psychiatric hospital after the parties announced that they had reached a settlement.
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December 14, 2021
Colo. Federal Jury Says Glass Subcontractor Breached Duty To Cooperate With Insurer
DENVER — A federal jury in Colorado on Dec. 10 found that a glass subcontractor breached its duty to cooperate with its insurer in an underlying case alleging that it installed faulty doors and windows at a condominium complex, finding that the insurer proved its affirmative defense by a preponderance of the evidence.
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December 14, 2021
Insured Not Entitled To Documents From Consultant Hired By Builder’s Risk Insurer
DENVER — A Colorado federal court special master assigned to a breach of contract and bad faith suit arising out of a construction defects claim on Dec. 9 affirmed a ruling that an insured is not entitled to discovery of documents produced by a consulting expert hired by the builders risk insurer because the expert was retained in anticipation of litigation and there is no evidence that the insurer relied on any work by the consultant before it denied the insured’s claim for damage to a concrete slab at a condominium project.
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December 14, 2021
Environmental Liability Insurer Has Duty To Defend Developers, Judge Says
HONOLULU — An environmental liability insurer has a duty to defend insured developers for water damages in condominium units caused by pump lines in the air conditioning system that were clogged with algae because the developers met their burden of showing that a possibility of coverage exists for a pollution incident under the policy, a Hawaii judge said Nov. 4.
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December 13, 2021
Federal Judge Denies Insurer’s Motion To Intervene In Construction Defects Suit
PORTLAND, Maine — A Maine federal judge on Nov. 29 denied a homeowners insurer’s motion to intervene as a subrogee in the homeowners’ suit against contractors and subcontractors related to faulty windows in the construction of a new home that resulted in water damage, finding that the insurer’s motion was untimely and the “lack of diligence in pursuing intervention makes it inequitable to permit” intervention after the parties voluntarily dismissed their claims.
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December 10, 2021
Insured Seeks Judgment, Citing Policy Exclusions, Contractor’s Misrepresentations
NASHVILLE, Tenn. — An insurer on Dec. 8 urged a federal court in Tennessee to award it summary judgment in its suit seeking a declaration that it has no duty to defend or indemnify a contractor insured in an underlying suit over defects in the construction of a firearms store and shooting range’s concrete pad, arguing that the contractor provided incorrect information in his application for a commercial general liability insurance policy and that the “unambiguous” language of the policy precludes coverage.
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December 03, 2021
Judge Approves Settlement Between Receiver, Insurer In Surfside Collapse Suit
MIAMI — A Florida judge on Dec. 1 granted a joint motion to approve a confidential settlement between the receiver for the Champlain Towers South Condominium Association and an insurer in a negligence lawsuit arising from the Surfside, Fla., condominium collapse.
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December 02, 2021
Trial Gets Under Way In Coverage Case Over Faulty Windows, Doors
DENVER — Jury selection was completed and opening statements were given Nov. 29 in a trial to determine whether an insurer has a duty to defend and indemnify underlying claims alleging that a glass subcontractor installed faulty doors and windows at a condominium complex.