Mealey's Construction Defects Insurance

  • October 20, 2020

    Insured’s Property Damage Suit Must Be Remanded To Oklahoma State Court

    TULSA, Okla. — An insured’s suit seeking coverage for storm-related damages and alleging claims for breach of contract and bad faith against two insurers must be remanded to Oklahoma state court because diversity of citizenship does not exist, an Oklahoma federal judge said Oct. 16 (Regent Preparatory School of Oklahoma v. Travelers Property Casualty Company of America, et al., No. 20-0512, N.D. Okla., 2020 U.S. Dist. LEXIS 192073).

  • October 15, 2020

    Exclusions Relieve Insurer Of Coverage For $1.5M In Repair Costs, Judge Finds

    CHARLESTON, S.C. — A commercial general liability insurance policy precludes coverage for $1.5 million in repair costs to an insured’s defective stucco work, a South Carolina federal judge ruled Oct. 13, granting summary judgment to the insurer (The Cincinnati Insurance Company v. Charlotte Paint Company, Inc., et al., No. 18-657, D. S.C., 2020 U.S. Dist. LEXIS 188710).

  • October 14, 2020

    Entry In Insurer’s Claims Notes Does Not Have To Be Produced, Judge Says

    PHOENIX — An entry in an insurer’s redacted claims notes pertaining to underlying construction defects lawsuits does not have to be produced because the entry is protected by the attorney-client privilege as it pertains to legal advice and not an adjustment of the claim, an Arizona federal judge said Sept. 30 in partially granting the insurer’s motion for reconsideration (Centex Homes, et al. v. NGM Insurance Co., No. 19-1392, D. Ariz., 2020 U.S. Dist. LEXIS 181204).

  • October 14, 2020

    Contractor Claims Defense Against Arbitration Owed, Says Insurer Breached Contract

    LOS ANGELES — A general contractor claims in an Oct. 9 complaint filed in California federal court that an insurer breached its contract and acted in bad faith by refusing to defend the contractor in an arbitration arising out of a construction defects dispute (Tutor Perini Building Corp. v. First Mercury Insurance Co. et al., No. 20-9329, C.D. Calif.)

  • October 12, 2020

    Additional Defendants Added In Construction Defects, Collapse Dispute

    BALTIMORE — A Maryland federal judge on Oct. 2 partially granted an insurer’s motion to amend its complaint to add three additional defendants who were directly involved in a renovation project that resulted in the collapse of the insured’s roof because none of the three additional proposed defendants objected to the addition (Arch Insurance Co. v. Costello Construction of Maryland Inc., et al., No. 19-1167, D. Md., 2020 U.S. Dist. LEXIS 183451).

  • October 12, 2020

    Defense Owed To Insured Over Alleged Defectively Installed Pipes, Judge Says

    SEATTLE — An insurer’s duty to defend was triggered for $1.4 million in damages for allegedly defectively installed piping in a construction project, a Washington federal judge ruled Oct. 9, granting partial summary judgment to an insured (The Phoenix Insurance Company v. Diamond Plastics Corporation, No. 19-1983, W.D. Wash., 2020 U.S. Dist. LEXIS 188222).

  • October 12, 2020

    Counterclaims Against Construction Company To Proceed, Federal Judge Says

    CENTRAL ISLIP, N.Y. — A New York federal judge on Sept. 29 denied a construction company’s motion to dismiss counterclaims asserted against it by a general contractor and a subcontractor after determining that an arbitration award entered in favor of the construction company and against an insurer did not resolve the counterclaims because the general contractor and subcontractor were not a party to the arbitration (Catlin Syndicate 2003, et al. v. Traditional Air Conditioning Inc., et al., No. 17-2406, E.D. N.Y., 2020 U.S. Dist. LEXIS 178829).

  • October 12, 2020

    Suit Seeking To Collect Judgment From Insurer Transferred To North Carolina

    CHARLESTON, S.C. — A South Carolina federal judge on Sept. 30 transferred a suit arising out of coverage for a judgment entered against an insured in a construction defects lawsuit to North Carolina federal court after determining that the interest of justice favors the transfer as the insurer filed a similar suit in the North Carolina federal court (Summer Wood Property Owners Association Inc. v. Pennsylvania National Mutual Casualty Insurance Co., No. 19-3548, D. S.C., 2020 U.S. Dist. LEXIS 179766).

  • October 09, 2020

    Insurers Say No Further Coverage Owed For Construction Defects Suit

    KANSAS CITY, Mo. — Primary and umbrella liability insurers filed suit on Oct. 5 in Kansas federal court against their insured contractor, seeking a declaration that no further coverage is owed for an underlying judgment entered against the insured contractor in a construction defects dispute (Continental Casualty Co., et al. v. Complete Construction LLC, et al., No. 20-2493, D. Kan.).

  • October 08, 2020

    Oregon Federal Magistrate Judge Says Policies’ Use Of Term ‘Occurred’ Is Ambiguous

    PORTLAND, Ore. — An Oregon federal magistrate judge on Oct. 5 denied an insurer’s motion for summary judgment in a coverage dispute over when hidden property damage to a townhome development occurred after determining that a ruling could not be made on whether the policies’ two-year suit limitations provision applies because the term “occurred” as used in the policies is ambiguous (Silver Ridge Homeowners’ Association Inc. v. State Farm Fire and Casualty Co., No. 19-01218, D. Ore., 2020 U.S. Dist. LEXIS 184205).

  • October 08, 2020

    Magistrate Judge Recommends No Dismissal Of Coverage Case Over Construction Defects

    MIAMI — Insurers can proceed with a coverage dispute over alleged defects in a fire protection system in a luxury condominium building, a federal magistrate judge in Florida said Oct. 5, recommending denial of motions to dismiss because a determination on the duty to defend and indemnify can ignore any extrinsic facts (Westchester Surplus Lines Insurance Company, et al. v. Summers Fire Sprinklers, Inc., et al., No. 20-21770, S.D. Fla., 2020 U.S. Dist. LEXIS 186159).

  • October 08, 2020

    Issues Of Fact Exist As To Reasonableness Of Settlements In Defective Stucco Suit

    TRENTON, N.J. — The New Jersey Superior Court Appellate Division on Oct. 5 affirmed a trial court’s ruling that material issues of fact exist as to the reasonableness of an insured general contractor’s settlements with homeowners whose homes sustained water damage as the result of the use of defective stucco (Bob Meyer Communities Inc. v. Ohio Casualty Insurance Co., et al., No. A-4526-18T3, N.J. Super., App. Div., 2020 N.J. Super. Unpub. LEXIS 1873).

  • October 08, 2020

    Insurer’s Settlement Over Defects Coverage Was Made In Good Faith, Judge Says

    LAS VEGAS — A subcontractor’s insurer’s $45,000 settlement was made in good faith with Centex Homes, as an additional insured, over breach of contract and bad faith claims for failure to defend two construction defect cases, a Nevada federal judge ruled Oct. 7 (Centex Homes v. Financial Pacific Insurance Co., et al., No. 19-1034, D. Nev., 2020 U.S. Dist. LEXIS 185953).

  • October 07, 2020

    Insurer Seeks Indemnity, Equitable Contribution From Subcontractors' Insurers

    DENVER — An insurer of a developer of a home that was uninhabitable as a result of numerous construction defects claims in an Oct. 2 complaint filed in Colorado federal court that the insurers of each of the subcontractors involved with the construction of the home must indemnify the insurer for the loss sustained by the developer based on the subcontractors' agreements with the developer (AmTrust International Underwriters DAC v. Builders Insurance Group, et al., No. 20-2977, D. Colo.).

  • October 06, 2020

    Insurer Files Suit, Says No Coverage Owed For Defective Stucco Installation

    BEAUFORT, S.C. — A commercial general liability insurer contends that no coverage is owed for defective stucco installed at a residence because the policies' exclusions for "prior work" and "your work" bar coverage, the insurer contends in an Oct. 2 complaint filed in South Carolina federal court (Atain Specialty Insurance Co. v. HJ Stucco LLC, et al., No. 20-3498, D. S.C.).

  • October 05, 2020

    Insurer Has No Duty To Defend, Indemnify $3.9M Construction Defects Case

    CHARLESTON, S.C. — A continuous and progressive injury limitation endorsement (CPIL) relieves an insurer from a duty to defend or indemnify a $3.9 million construction defects case against a contractor because the "property damage" was first known after the policy's expiration, a South Carolina federal judge held Oct. 2 (Atain Specialty Insurance Company v. Carolina Professional Builders, LLC, et al., No. 18-2352, D. S.C., 2020 U.S. Dist. LEXIS 183205).

  • September 30, 2020

    Contractor Sues 3 Insurers Over Coverage For Defects In Fire Sprinkler System

    SAN FRANCISCO — A general contractor accuses three insurers in a Sept. 25 complaint filed in a California federal court of breaching their contract and acting in bad faith in denying a defense for claims of alleged damages related to a fire sprinkler system caused by allegedly defective construction (Build Group, Inc. v. Rockhill Insurance Company, et al., No. 20-6728, N.D. Calif.).

  • September 29, 2020

    Allstate Acted In Bad Faith In Denying Water Damage Claim, Insured Alleges

    SEATTLE — A condominium association sued its property insurer in federal court in Washington on Sept. 24, alleging that the insurer breached the terms of its insurance policy and acted in bad faith in denying full coverage for water damage uncovered on buildings owned by the association (La Reve Condominium Association v. Allstate Insurance Co., No. 20-1425, W.D. Wash.).

  • September 28, 2020

    No Duty To Defend Insured In Water Damage Suit; 'Your Work' Exclusion Bars Coverage

    DALLAS — A commercial general liability insurer has no duty to defend or indemnify its insured for an underlying suit arising out of water damage to a high school as a result of an allegedly defective roofing system manufactured by the insured because the policies' your work or your product exclusions clearly bar coverage, a Texas federal judge said Sept. 25 (Siplast Inc. v. Employers Mutual Casualty Co., No. 19-1320, N.D. Texas, 2020 U.S. Dist. LEXIS 176539).

  • September 24, 2020

    Judge Dismisses Dispute Over Coverage For 600 Construction Defect Claims

    FRESNO, Calif. — A federal judge in California on Sept. 22 dismissed a contribution and subrogation lawsuit brought by two insurers against Clarendon National Insurance Co. concerning coverage for 600 underlying construction defect claims and suits because there is a lack of subject matter jurisdiction (United Specialty Insurance Company, et al. v. Clarendon National Insurance Company, No. 19-1715, E.D. Calif., 2020 U.S. Dist. LEXIS 174054).