Mealey's Construction Defects Insurance : Mealey's : Legal News & Analysis

Mealey's Construction Defects Insurance

February 07, 2023
Trial Court Erred In Granting Summary Judgment In Insurer Contribution Suit

ANNAPOLIS, Md. — Although a nonsettling insurer may not ultimately prevail on its claim for equitable contribution against settling insurers in a lawsuit brought seeking to hold the settling insurers liable for contribution to defense costs and attorney fees in a construction defects lawsuit, a Maryland trial court erred in granting the settling insurers’ summary judgment motion on the grounds for which it did, a Maryland Appellate Court panel ruled in reversing and remanding.
February 07, 2023
Insurer’s Negligence Claims Against Architect Lack Factual Foundation

NEW YORK — A New York justice ruled that dismissal of negligence claims against an architect in a coverage lawsuit stemming from its role in a faulty HVAC system installation as part of an apartment renovation project is necessary because while the claims against the architect are timely, the allegations made by the insurer that brought the claims “lack the foundation needed” to survive dismissal under the heightened pleading standard of Civil Practice Law and Rule Section 3211(h).
February 03, 2023
Insurer Lacked Ability To Sue Contractors Under Contract’s Subrogation Waiver

HOUSTON — A Texas court did not err in granting summary judgment to contractors in an insurer’s lawsuit stemming from a fire that damaged the property on which the contractors were working because no issue of material fact exists showing the contractors were entitled to such relief based on their affirmative defense of waiver, a Texas appellate court ruled Feb. 2 in affirming.
February 02, 2023
Protective Order Issued In Coverage Dispute Over Sewer Pipe Break

SEATTLE — A federal magistrate judge in Washington granted a stipulated protective order designating certain materials to be submitted as confidential in a coverage dispute stemming from a contractor’s faulty construction of a conveyance pipe for a sewer overflow control project because the coverage suit is proceeding simultaneously with the underlying construction defects lawsuit.
February 02, 2023
Architect Appeals Summary Judgment Ruling In Chimney Fire Suit

NEW YORK — An architect will appeal a New York County Supreme Court justice’s ruling denying his motion for summary judgment on third-party claims brought against him in a subrogation lawsuit filed by an insurer stemming from damage caused by an improperly constructed chimney as part of a home renovation, according to a notice of appeal filed in New York state court.
February 01, 2023
Fire Damage Coverage Suit Remanded Due To Improper 'Snap Removal'

BAY CITY, Mich. — A federal judge in Michigan remanded an insurer’s lawsuit against a contractor and manufacturers of an electric heater that, due to its allegedly faulty manufacturing and installation, caused a fire that damaged an insured’s property, ruling that one of the defendants in the action had improperly engaged in a “snap removal."
January 31, 2023
Subrogation Waivers Bar Majority Of Insurers’ Claims In Gas Explosion Lawsuit

DETROIT — An engineering firm and contractor are entitled to summary judgment on a majority of claims filed against them by subrogee insurers in a lawsuit stemming from a gas explosion at a facility where the defendants were involved in a renovation project because subrogation waivers included in contracts the defendants signed with the building owner apply, barring each of the insurers’ claims, except their claims for gross negligence, a federal judge in Michigan ruled Jan. 30 in granting the motions.
January 31, 2023
Jury Placed Too Much Weight On Scant Late Notice Defense, Condo Owners Argue

CINCINNATI — A condominium’s apartment owners association moved for a new trial in Washington federal court in a coverage dispute with its insurers over water intrusion damage caused by defects in the construction of the property, arguing that a jury verdict improperly found in favor of insurers because the insurers’ “‘late notice’ defense is ‘contrary to the weight of the evidence’” and the jury, thus, failed to reach other issues in rendering the verdict.
January 30, 2023
Pollution Exclusion Is Ambiguous As To Whether Home Heating Oil Is A Pollutant

PROVIDENCE, R.I. — The Rhode Island Supreme Court on Jan. 27 vacated and remanded a trial court’s ruling entered in favor of an insurer in an insured’s suit seeking coverage for an underlying suit arising out of a home heating oil spill because the policy’s pollution exclusion is ambiguous as to whether home heating oil qualifies as a pollutant.
January 30, 2023
Insurer Off The Hook For Builder’s Alleged Damages Under Manifestation Theory

LAFAYETTE, La. — A general liability insurer is entitled to summary judgment on its cross-claims against its insured contractor in a coverage dispute stemming from the contractor’s faulty workmanship in the construction of a hotel because under the manifestation theory, alleged damages caused by the contractor were not discovered during the policy periods, a federal judge in Louisiana ruled in granting the insurer’s motion.
January 27, 2023
Policy Language Required Subcontractor’s Work To Be Done During Policy Period

LOS ANGELES — An insurer had no duty to defend a subcontractor in a construction defects action because the products-completed operations hazard language in a wrap policy the insurer provided to a developer required work to be completed during the policy period, which the subcontractor did not do, a federal judge in California ruled in denying a motion for summary judgment filed by an assignee of the subcontractor and granting a summary judgment motion filed by the insurer.
January 26, 2023
Contractor’s Claims In ‘Complicated’ Water Intrusion Coverage Suit Timely

DENVER — A federal magistrate judge in Colorado recommended that a contractor’s third-party claims in a coverage suit brought by an insurer over the contractor’s alleged construction defects in the building of a commercial and residential development not be dismissed because “the complicated history of how the Project’s alleged construction defects were pursued” allows the derivative claims to remain timely.
January 25, 2023
Claims Against Several More Insurers In Defective Work Coverage Suit Dismissed

ALBUQUERQUE, N.M. — Without providing detail, a federal judge in New Mexico on Jan. 24 issued a pair of orders dismissing with prejudice claims brought by a contractor against commercial general liability insurers in a coverage dispute stemming from allegedly defective work performed by insured subcontractors on a residential subdivision.
January 25, 2023
Indemnification Claim Survives Dismissal Bid In Suit Over Garage Collapse

LEXINGTON, Ky. — A federal judge in Kentucky ruled that partial dismissal of a third-party complaint filed in a lawsuit brought by an insurer alleging that a contractor and inspector were negligent in their repair of a parking garage, which led to the garage’s collapse, is warranted because although the third-party plaintiffs have sufficiently pleaded their indemnification claim, they have failed to do so regarding their claim for contribution.
January 25, 2023
Insurer Has Duty To Defend Contractor In Underlying Faulty Workmanship Suit

BOSTON — An insurer had a duty to defend its insured contractor in an underlying lawsuit alleging that faulty workmanship on the part of the contractor and others in the renovation of a building led to the building’s collapse, causing over $1 million in damage, because the claims made against the contractor allege “‘property damage,’ caused by an ‘occurrence,” a federal judge in Massachusetts ruled Jan. 24 in granting the contractor’s motion for partial summary judgment in part and denying the insurer’s motion.
January 24, 2023
Policy Language Bars Coverage To Engineering Firm In Highway Construction Suit

AUSTIN, Texas — A federal magistrate judge in Texas recommended that an excess insurer’s motion for summary judgment in its coverage dispute with its insured engineering firm stemming from claims made against the insurer an others over a faulty highway construction project because the insurer has sufficiently shown that the plain language of the policies at issue precludes coverage.
January 24, 2023
Subcontractor Fails To Show That Cross-Claim Is Barred By Statute Of Limitations

LAS VEGAS — A federal judge in Nevada denied a subcontractor’s motion to dismiss a cross-claim for equitable subrogation filed by an insurer in a coverage dispute stemming from mold and moisture-related damages on three construction projects, ruling that the cross-claim is not barred by the statute of limitations and is sufficiently related to the original claim.
January 23, 2023
Contractor’s Amended Reformation Counterclaim Survives Dismissal Bid

WEST PALM BEACH, Fla. — A federal judge in Florida declined to dismiss a contractor’s counterclaim for reformation against a commercial general liability (CGL) insurer in the insurer’s declaratory relief lawsuit stemming from a subcontractor’s alleged faulty installation of cladding and glazing systems in a construction project, ruling that the contractor’s counterclaim provides “more than sufficient notice” to the insurer and has been properly pleaded.
January 23, 2023
Insurer’s Denial Of Defense To Developer In Defects Suit Was Not In Bad Faith

SAN DIEGO — A California appellate court panel ruled that a trial court did not err in granting summary adjudication in favor of an insurer on a bad faith claim in a coverage dispute stemming from the insurer’s failure to defend a developer and contractor in a construction defects lawsuit because a genuine dispute existed between the parties at the time the developer and contractor made their request to the insurer to contribute to their defense costs.
January 23, 2023
Insurer Gets Claim Against It Severed From Defects Coverage Suit

TACOMA, Wash. — A federal judge in Washington granted an insurer’s motion to bifurcate brought by homeowners in a coverage dispute stemming from a construction defects lawsuit over the construction of homes in a housing development, ruling that both convenience and prejudice concerns and judicial economy favor bifurcation.
January 19, 2023
Exclusion Removed Insurers’ Duty To Indemnify Developer In Water Damage Suit

PASADENA, Calif. — A federal district court did nor err in ruling that insurers had no duty to indemnify a home remodeler in a lawsuit brought by a homeowner in a water damage lawsuit stemming from the installation of a faulty fire suppression system because damage caused after the system unexpectedly activated was excluded under a policy provision, a Ninth Circuit U.S. Court of Appeals panel affirmed Jan. 18.
January 18, 2023
Subrogee Insurer Realigned As Plaintiff In Window Damage Coverage Suit

BIRMINGHAM, Ala. — A federal judge in Alabama realigned parties in a declaratory judgment action against a general contractor, subcontractor and the general contractor’s insurer stemming from allegedly defective window painting work performed on a home, naming the insurer as plaintiff in the action and requiring the insurer to file an amended complaint in which it states that jurisdiction in the district court exists.
January 11, 2023
Subcontractor’s Appeal In Coverage Suit Over Faulty Welding Work Dismissed

ATLANTA — The 11th Circuit U.S. Court of Appeals dismissed an appeal brought by an insured subcontractor in a coverage dispute stemming from a lawsuit filed against the subcontractor related to faulty welding performed at a construction project after the parties in the litigation agreed to settle their claims.
January 10, 2023
Failure To Plead Estoppel Doomed Couple’s Claims In Faulty Work Coverage Suit

ATLANTA — A federal district court did not err in ruling that a general contractor’s insurer was not required to pay $900,000 to a couple for claims of negligence and wantonness brought against the contractor for defective construction of their home because the couple failed to meet their burden of proving estoppel and failed to meet their burden to establish that coverage applied, an 11th Circuit U.S. Court of Appeals panel affirmed Jan. 9 in a per curiam opinion.
January 09, 2023
Faulty Workmanship Exclusion Barred Coverage For Ceiling Collapse Damages

BATON ROUGE, La. — In a divided opinion, a Louisiana appellate panel affirmed a state trial court’s grant of summary judgment in a lawsuit brought by homeowners stemming from their insurer’s denial of a claim for damages resulting from a ceiling collapse in their home, ruling that the trial court properly determined that a policy exclusion for faulty workmanship barred coverage for the homeowners’ claim.