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

Mealey's Construction Defects Insurance

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.).
January 29, 2019
Insured’s Property Damage Occurred Outside Policy Period, 8th Circuit Finds

ST. LOUIS — An insurer has no duty to defend or indemnify allegations that defective construction caused water infiltration in condominium units, the Eighth Circuit U.S. Court of Appeals held Jan. 28, because the property damage occurred outside the policy period (Clarke Company Ltd. v. American Family Mutual Insurance Co., No. 17-2418, 8th Cir., 2019 U.S. App. LEXIS 2760).
January 28, 2019
Insurer Argues It Has No Duty To Defend Defect Case Against Builder

TAMPA, Fla. — An insurer on Jan. 7 sued a home builder and the owners of the property in a Florida federal court, seeking a declaration that it has no duty to defend or indemnify them in relation to an underlying lawsuit in which the owners allege the property contains defects (Southern-Owners Insurance Co. v. Russ Building Concepts, et al., No. 19-00042, M.D. Fla.).
January 28, 2019
Wisconsin High Court Majority Says Costs Must Be Allocated Between 2 Insurers

MADISON, Wis. — The Wisconsin Supreme Court majority on Jan. 25 determined that a pollution liability insurer breached its duty to defend an additional insured for underlying property damage claims arising out of a sewage backup and said that the additional insured’s defense costs, which were paid by another insurer, must be allocated on a pro rata basis between the two insurers (Steadfast Insurance Co. v. Greenwich Insurance Co., No. 2016AP1631, Wis. Sup., 2019 Wisc. LEXIS 9).
January 25, 2019
Judge Denies Insurer’s Bid For Reconsideration Of Orders In Defects Coverage Dispute

SAN FRANCISCO — A California federal judge on Jan. 22 addressed the change in a cited case as it pertains to four orders issued in an insurance coverage lawsuit concerning underlying construction defects lawsuits and denied the insurer’s motion for leave to file motions for reconsideration (Travelers Property Casualty Company of America, et al. v. Centex Homes, No. 11-03638, Related Case Nos. 12-00371 & 13-00088, N.D. Calif., 2019 U.S. Dist. LEXIS 10261).
January 22, 2019
Insureds File Notice Of Appeal In Suit Seeking Coverage For Cracking Walls

ROCKVILLE, Conn. — Insureds seeking coverage for the cracking of their home’s foundation walls filed a notice of appeal on Jan. 3 to the Connecticut Appellate Court following a Connecticut state judge’s finding that no coverage is afforded for the cracking foundation walls because there was no abrupt collapse of the home’s walls, as required by two of the applicable policies, and because the loss was caused by cracking, an excluded cause of loss under another of the policies (Michael Willenborg, et al. v. Unitrin Preferred Ins. Co., et al., No. 166010936S, Conn. Super.).
January 18, 2019
Defective Pool Work Is Not ‘Property Damage’ Under Insurance Policy

SAVANNAH, Ga. — Claims that work on a pool resulted in a faulty and unusable pool are not claims for covered “property damage,” a Georgia federal judge ruled Jan. 17, granting summary judgment to an insurer on declaratory judgment, breach of contract and bad faith claims (Delma Cowart v. Nautilus Insurance Co., NO. 17-142, S.D. Ga., 2019 U.S. Dist. LEXIS 8531).
January 11, 2019
New Mexico Federal Judge Grants Summary Judgment To Insurer On Negligence Claim

ALBUQUERQUE, N.M. — In a dispute over coverage for water damage, a New Mexico federal judge on Jan. 8 denied summary judgment to a homeowners insurer on statutory claims and negligence asserted under the New Mexico Unfair Practices Act and the New Mexico Unfair Insurance Practices Act but granted summary judgment on a negligence claim (Hector Fava, et al. v. Liberty Mutual Insurance Corp., No. 17-456, D. N.M., 2019 U.S. Dist. LEXIS 4158).
January 10, 2019
Insured’s Claim For Concrete Flooring ‘Pop-Outs’ Is Not Covered ‘Property Damage’

DENVER — “Pop-outs” in a concrete floor “did not physically injure or damage any tangible property other than the floor” and, thus, did not constitute “property damage” under a commercial general liability insurance policy, a Colorado federal judge held Jan. 8 (Kalman Floor Co. v. Old Republic General Insurance Corp., No. 17- 01703, D. Colo., 2019 U.S. Dist. LEXIS 3319).
January 10, 2019
Federal Judge: Leaks Not Covered ‘Property Damage’ Under Insurance Policy

BOSTON — Leaks in a condominium unit were not “property damage” that occurred during a policy period, a Massachusetts federal judge held Jan. 8, granting summary judgment to an insurer on another insurer’s breach of contract claim (Clarendon National Insurance Co. v. Philadelphia Indemnity Insurance Co., No. 17-12541, D. Mass., 2019 U.S. Dist. LEXIS 3322).
January 09, 2019
Fact Issues Exist On Bad Faith Claim Alleged Against Insurer In Water Damage Suit

ALBUQUERQUE, N.M. — An insurer is not entitled to summary judgment on a bad faith claim alleged by insureds who maintain that they are entitled to coverage for water damage because the insureds presented sufficient facts from which a jury could find that the insurer’s coverage denial was made in bad faith, a New Mexico federal judge said Dec. 20 (Hector Fava, et al. v. Liberty Mutual Insurance Corp., No. 17-456, D. N.M., 2018 U.S. Dist. LEXIS 215009).
January 07, 2019
Judge: Contract Liability Exclusion Bars Coverage For Repairs To Faulty Work

BOSTON — A contract liability exclusion precludes coverage for any work assumed by a general contractor to repair a subcontractor’s defective work in a gymnasium floor, a Massachusetts federal judge ruled Jan. 4, granting summary judgment to an insurer on breach of contract and declaratory judgment claims (Lee Kennedy Co. Inc. v. Arch Insurance Co., No. 17-10698, D. Mass., 2019 U.S. Dist. LEXIS 1448).
January 02, 2019
Defects, Errors, Omissions Exclusion Bars Insurance Claim, Federal Judge Says

HOUSTON — A defects, errors and omissions clause excludes coverage for a claim regarding damage to windows during a construction project, a Texas federal judge ruled Dec. 28, finding that an exception does not reinstate coverage (Balfour Beatty Construction LLC v. Liberty Mutual Insurance Co., No. 17- 02477, S.D. Texas, 2018 U.S. Dist. LEXIS 217565).
December 21, 2018
Insurer Files Suit Over Duty To Defend, Indemnify Construction Defects Verdict

DALLAS — A commercial general liability insurer filed a declaratory judgment action on Dec. 11 in a Texas federal court arguing that it has no duty to defend or indemnify a verdict in a construction defects lawsuit over water damage to a homeowner’s property (Mid-Continent Casualty Co. v. English Heritage Homes of Texas Inc., et al., No. 18-3255, N.D. Texas).
December 19, 2018
Judge: Insurer Owes Defense As Damage To Your Work; Stucco Exclusions Do Not Apply

TAMPA, Fla. — A commercial general liability insurer has a duty to defend an insured against breach of contract and warranty claims arising out of construction defects in a condominium project, a Florida federal judge ruled Dec. 18, finding that damage to your work and exterior insulation finishing system (EIFS) and stucco exclusions do not bar coverage (Southern Owners Insurance Co. v. Gallo Building Services Inc., et al., No. 15-01440, M.D. Fla., 2018 U.S. Dist. LEXIS 212961).
December 14, 2018
Lack Of Notice Prejudiced Insurer, New Hampshire Federal Judge Concludes

CONCORD, N.H. — A commercial general liability insurer established that an insured contractor breached its duty to notify the insurer of dissatisfaction in its work and an eventual lawsuit that resulted in a default judgment against it, a New Hampshire federal judge ruled Dec. 11, finding that the breach precludes coverage for the insured (Nautilus Insurance Co. v. Gwinn Design and Build LLC, et al., No. 18-633, D. N.H., 2018 U.S. Dist. LEXIS 208437).
December 13, 2018
Insurer Fails To Show ‘Work Product’ Exclusions Bar Construction Defects

NEW ORLEANS — A commercial general liability insurer failed to establish that “damage to property,” “damage to your product” and “damage to your work” exclusions preclude coverage for alleged defects in the construction of residential property, a Louisiana federal judge ruled Dec. 10, denying summary judgment to the insurer (Starr Surplus Lines Insurance Co. v. Banner Property Management Co., et al., No. 18-5635, E.D. La., 2018 U.S. Dist. LEXIS 207808).
December 13, 2018
Panel Affirms, Reverses Insurance Coverage Rulings In Construction Defects Case

SEATTLE — In a dispute over coverage for construction defects to a mixed-use condominium building, a Washington appeals panel on Dec. 10 reversed dismissal of an additional insured’s duty to defend and bad faith claims against one commercial general liability insurer but affirmed dismissal of the same claims against two other CGL insurers (Zurich American Insurance Co. v. Ledcor Industries [USA] Inc., et al., No. 76405-5-I, Wash. App., Div. 1, 2018 Wash. App. LEXIS 2769).
December 07, 2018
Coverage Owed For $910,148 Default Judgment, Appellant Argues To 4th Circuit

RICHMOND, Va. — The obtainer of a $910,148 default judgment entered against a design company in a negligent design dispute recently asked the Fourth Circuit U.S. Court of Appeals to hold the design company’s insurer responsible for the judgment, $22,210 in attorney fees and $370 in court costs (Gateway Residences at Exchange, LLC v. Illinois Union Insurance Company, No. 18-1491, 4th Cir.).