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

Mealey's Construction Defects Insurance

May 15, 2023
Guaranty Association Must Defend Insured Drywaller In Underlying Row, Insurer Says

JACKSONVILLE, Fla. — A New Mexico commercial general liability insurer defending its insured drywall company in a construction defects action filed a contribution suit in a Florida federal court against the Florida Insurance Guaranty Association (FIGA), as successor in interest to a now-insolvent Florida commercial liability insurer of the drywaller, asserting that FIGA is liable for defense costs and indemnity in the underlying action.
May 09, 2023
Split Panel: Attorney Fees Properly Denied In Defective Stucco Coverage Suit

ATLANTA — A federal district court did not err in determining that it lacked subject matter jurisdiction to award attorney fees under a Florida statute to a homebuilder and a subcontractor in a coverage dispute stemming from the subcontractor’s alleged faulty exterior stucco work because, under 11th Circuit U.S. Court of Appeals precedent, attorney fees under the statute are “integral to the merits,” and, therefore, the lower court lacked the necessary jurisdiction to award such fees, a divided 11th Circuit panel ruled in affirming in an unpublished opinion.
May 05, 2023
Attorney Fees Ruling Delay Would Harm Contractor In Coverage Dispute, Judge Told

FORT MYERS, Fla. — A federal judge in Florida should not deter ruling on a contractor’s pending motions miscellaneous relief pending appeal in a coverage dispute over an insurer’s duty to defend the contractor in an underlying construction defects lawsuit because granting such relief would harm the contractor, the contractor argues in an opposition brief filed in Florida federal court.
May 05, 2023
Washington Appellate Panel Denies Rehearing In Faulty Work Coverage Suit

SEATTLE — A Washington appellant panel declined to rehear its ruling reversing a trial court’s dismissal of a restaurant insurer’s damages claims against a contractor over the contractor’s faulty workmanship in installing flooring in the restaurant based on the contractor’s filing of a motion to dismiss that did not comply with statutory requirements.
May 05, 2023
Parties Agree To Dismiss With Prejudice Fire Damage Subrogation Suit

BOSTON — Parties in a subrogation action brought in Massachusetts federal court by a homeowners insurer alleging that the manufacturer of rope lighting that allegedly caused a fire in a home have stipulated that the action be dismissed with prejudice and all rights of appeal be waived.
May 05, 2023
Amended Order In Faulty Welds Coverage Suit Issued At Request Of 7th Circuit

CHICAGO — Following an order issued by a Seventh Circuit U.S. Court of Appeals judge, a federal judge in Illinois issued an order and amended final judgment, ruling that insurers do not owe a general contractor a defense or indemnification as an additional insured in a coverage dispute stemming from a subcontractor’s defective welding work at O’Hare International Airport.
May 05, 2023
60-Day Dismissal Order Issued In Builders’ Coverage Suit While Deal Finalized

DALLAS — A federal judge in Texas issued a 60-day dismissal order in a lawsuit brought by Pulte Homes of Texas LP and Centex Homes alleging that insurers for subcontractors the builders retained for a construction project were required to defend and indemnify the builders as additional insureds in an underlying construction defects lawsuit after the parties notified the court that they had agreed to settle all claims.
May 04, 2023
Building Owner Appeals Faulty Design Coverage Suit Dismissal To 10th Circuit

DENVER — The 10th Circuit U.S. Court of Appeals has been asked to review a federal judge in Wyoming’s ruling that a building owner failed to show that an insurer and its claims service manager were the cause of its filing of a breach of contract claim in a coverage suit stemming from the building’s faulty design and construction outside the two-year statute of limitations based on their delay in ultimately denying the claim.
May 04, 2023
Insurer’s Declaratory Relief Suit Over Building Collapse Coverage Dismissed

ALEXANDRIA, La. — Ruling only that he concurred with a federal magistrate judge’s recommendation, a federal judge in Louisiana issued a judgment dismissing an insurer’s declaratory relief action against its insured contractor and a property owner in a coverage dispute stemming from the collapse of the property owner’s building during renovation work.
May 04, 2023
Summary Judgment Ruling In Leaky Roof Coverage Suit Appealed To 2nd Circuit

ROCHESTER, N.Y. — Former homeowners have appealed to the Second Circuit U.S. Court of Appeals a New York federal magistrate judge’s finding that insurers owe no duty to defend the former homeowners in a lawsuit stemming from their alleged failure to disclose structural and environmental issues in connection with a home they sold.
May 04, 2023
Judgment Entered Ending Faulty Concrete Work Damages Coverage Suit

CONCORD N.H. — A coverage lawsuit in which a contractor sought to recover property damages that occurred during the pendency of a stop-work order imposed due to faulty concrete work performed by a subcontractor has been brought to a close after the parties agreed to dismiss the lawsuit with prejudice, according to a judgment filed in New Hampshire federal court.
May 04, 2023
Flawed Painting Work Coverage Suit Closed After Remaining Parties Settle

BIRMINGHAM, Ala. — A declaratory judgment action against a general contractor and subcontractor stemming from allegedly defective window painting work performed on a home has been dismissed after the general contractor, subcontractor and the general contractor’s insurer agreed to settle their claims, according to a minute entry dismissal filed in Alabama federal court.
May 04, 2023
Homeowners Seek 9th Circuit Review Of Dismissal Of Defects Coverage Claims

SAN FRANCISCO — Homeowners have appealed to the Ninth Circuit U.S. Court of Appeals the dismissal of their claims against an insurer for failure to properly prosecute the claims in a coverage dispute stemming from a construction defects lawsuit over the construction of homes in a housing development.
May 04, 2023
Defendants In Roof Collapse Coverage Suit Considering Settlement

NASHVILLE, Tenn. — Parties in a coverage dispute over a roof collapse that occurred at a vehicle manufacturer’s assembly plant during a re-roofing project tell a federal magistrate judge in Tennessee that a contractor and its subcontractors are considering a settlement demand made by the plaintiffs and working on a date to begin mediation to potentially resolve the action, according to a joint status report requested by the court following the denial of the defendants’ motions to dismiss and for judgment on the pleadings.
May 04, 2023
Church Seeks Costs After $170,000 Verdict In Water Damage Coverage Suit

MOBILE, Ala. — On the heels of a nearly $170,000 judgment entered in its favor in an insurance dispute over an insurer’s handling of a property damage claim after Hurricane Sally, a church is seeking an additional $7,998.74 in costs litigating the action, according to a bill of costs the church submitted in Alabama federal court.
May 04, 2023
Contractor’s Lack Of Standing Dooms Counterclaims In Faulty Work Coverage Suit

LAS VEGAS — A painting contractor lacks standing to pursue counterclaims against its insurer in a coverage dispute stemming from an arbitration award issued in favor of a homeowners association (HOA) stemming from the contractor’s faulty work because the contractor assigned its claims to the HOA after arbitration, a federal judge in Nevada ruled in granting the insurer’s motion for judgment on the pleadings.
May 03, 2023
Subcontractor Awarded $521,169.43 In Attorney Fees In Defects Coverage Suit

PORTLAND, Ore. — A federal judge in Oregon issued an order awarding a construction subcontractor a total of $521,169.43 in attorney fees in a coverage dispute with its insurer stemming from an underlying construction defects lawsuit, finding that a federal magistrate judge who recommended the amount committed no “clear error” in issuing the recommendation.
May 03, 2023
Dismissal Of Faulty Stucco Coverage Suit Appeal Sought After Settlement Reached

ATLANTA — A contractor and its insurer asked the 11th Circuit U.S. Court of Appeals to dismiss with prejudice the insurer’s appeal of a federal district court’s issuance of a reduced attorney fee award in a coverage lawsuit stemming from the law firm’s representation of the contractor in an underlying lawsuit over a subcontractor’s alleged defective stucco work on several homes in a subdivision, stating that the parties have reached “a full and final settlement of the dispute between them.”
May 03, 2023
Insurer Says District Court Correctly Found No Coverage For Mold, Water Damage

ATLANTA — The 11th Circuit U.S. Court of Appeals should affirm a district court’s ruling that no coverage is owed for mold damage discovered in an insured hotel because the hotel has a long and documented history of water leaks and mold growth due to faulty construction that incepted prior to the applicable policy period, the insurer says in its appellee brief.
May 03, 2023
Contractor Appeals Summary Judgment In Rain Damage Coverage Suit To 9th Circuit

SAN FRANCISCO — A contractor has appealed to the Ninth Circuit U.S. Court of Appeals a federal judge in Washington’s grant of summary judgment in favor of insurers in a coverage dispute stemming from water intrusion damages caused by snow and rainfall during the construction process after ruling that the insurers’ denial of the claim was proper based on the policies’ rain exclusion.
May 01, 2023
Welding Coverage Suit Axed After Subcontractor Withdraws Defense Demand

ATLANTA — Without providing detail, a federal judge in Georgia issued an order dismissing a coverage dispute stemming from a lawsuit filed against a subcontractor related to faulty welding work performed at a construction project (Middlesex Insurance Co. v. Dixie Mechanical Inc., et al., No. 20-4971, N.D. Ga.).
April 28, 2023
Court Lacks Jurisdiction To Hear Suit Against Contractor In Attorney Fees Suit

BIRMINGHAM, Ala. — A federal district court lacks the necessary jurisdiction to hear an insurer’s lawsuit seeking reimbursement of attorney fees and costs associated with representing a contractor in an underlying construction defects lawsuit because the insurer has failed to show that while none of the parties resides within the state of Alabama, the court still has jurisdiction to hear the insurer’s claims, a federal judge in Alabama ruled in dismissing without prejudice.
April 27, 2023
Contractor’s Defective Work Coverage Suit Dismissed After All Parties Settle

ALBUQUERQUE, N.M. — A federal judge in New Mexico brought an end to a contractor’s lawsuit against commercial general liability insurers in a coverage dispute stemming from allegedly defective work performed by insured subcontractors on a residential subdivision, dismissing the action with prejudice after the contractor notified the court that it had settled its claims with all remaining defendants.
April 27, 2023
Judge: Direct Action Statute Bars Insurer’s Damages Claim In Water Damage Suit

NEW ORLEANS — An insurer proceeding as subrogee of its insured contractor cannot sue a subcontractor’s insurer to recover damages the subrogee insurer paid stemming from water damage caused by the subcontractor’s negligence in performing work on a home’s roof because, under Louisiana’s Direct Action Statute, neither the subrogee insurer nor the contractor is a tort victim, a federal judge in Louisiana ruled in dismissing the insurer’s suit.
April 26, 2023
Court Erred In Rejecting Concurrent Cause Argument, Subrogee Insurer Argues

ATLANTA — The 11th Circuit U.S. Court of Appeals should reverse a federal district court’s grant of summary judgment in favor of an insurer in a coverage dispute over payment of policy claims made by a joint venture that oversaw a construction project at a water reclamation facility because a subrogee insurer is seeking to recover damages not solely for design defects, but for damages caused by a combination of policy-excluded design defects and “covered hydrostatic pressure,” the subrogee insurer argues in a reply brief filed in the appellate court.