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

Mealey's Construction Defects Insurance

April 21, 2023
Lack Of Notice, Policy Exclusions Bar Coverage For Builder’s Faulty Work

BALTIMORE — An insurer owes no damages to homeowners for a judgment issued against its contractor, based on the contractor’s faulty workmanship in the construction of a home, because the insurer failed to provide adequate notice of the homeowners’ claims against it and because the damages were barred under the policy’s “your work” exclusions, a federal judge in Maryland ruled in granting the insurer’s motion for summary judgment and denying a cross-motion filed by the homeowners.
April 20, 2023
Judge: Homeowner’s Personal Injuries Excluded Under Contractor’s Policy

PHILADELPHIA — An insurer does not owe coverage to homeowners under the terms of a policy it provided to a contractor for personal injuries one of the homeowners sustained as a result of mold infestation caused by the contractor’s negligent workmanship because the injuries are excluded under at least one of the policy’s exclusions, a federal judge in Pennsylvania ruled.
April 18, 2023
Judge Sets Aside Default Entry Against Contractor In Defects Coverage Suit

GREENVILLE, Tenn. — A federal judge in Tennessee adopted a magistrate judge’s recommendation that a subcontractor’s motion to set aside an entry of default in a coverage dispute stemming from a construction defects lawsuit be granted, ruling that the report and recommendation “properly analyzes the issues presented."
April 17, 2023
Remaining Claims In Home Construction Defects Coverage Suit Dismissed

SEATTLE — A federal judge in Washington dismissed all remaining claims and counterclaims in a coverage suit stemming from an insurer’s denial of a defense to its insured subcontractor in an underlying construction defects lawsuit brought by homeowners after the parties moved to dismiss those claims in light of the homeowners’ filing of a notice of appeal to the Ninth Circuit U.S. Court of Appeals.
April 12, 2023
Washington Panel Reverses Spoliation Sanction In Design Defect Coverage Dispute

SEATTLE— A Washington appeals court held that although an insured owed a contractual duty to the Washington State Department of Transportation to preserve evidence relating to a change order request, it had no duty to its builders risk insurers and, therefore, the insurers are not entitled to an adverse inference jury instruction as a sanction in a coverage lawsuit stemming from damage to a tunnel boring machine used in the construction of the State Route 99 tunnel.
April 07, 2023
Settlement Leads To Dismissal Of Coverage Suit Against Hotel Developer

SEATTLE — Without providing further detail, a federal judge in Washington dismissed an insurer’s coverage lawsuit against a hotel developer stemming from losses related to construction delays and water intrusion damages after the parties filed a stipulated motion to dismiss.
April 07, 2023
Policy Breach, Bad Faith Claims Dismissed In Building Roof Coverage Lawsuit

CHEYENNE, Wyo. — A federal judge in Wyoming ruled that an insurer and its claims service manager are entitled to summary judgment on a building owner’s breach of contract claim in a coverage suit stemming from a building’s faulty design and construction because the building owner failed to show that the defendants were the cause of its filing of the claim outside the two-year statute of limitations period.
April 07, 2023
Cross-Appeals In Condo Water Intrusion Damage Coverage Suit Dismissed

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals dismissed a pair of appeals in an insurance dispute in which a condominium’s apartment owners association sought coverage for water intrusion damages caused by construction defects during the construction of the condominiums after the parties agreed to not pursue their appeals any further.
April 06, 2023
Masonry Contractor’s Coverage Suit Dismissed After Parties Agree To Settlement

SAN FRANCISCO — A federal judge in California dismissed a construction defects insurance coverage dispute stemming from faulty masonry and waterproofing work on a retail shopping center after the parties agreed to dismiss the action with prejudice after reaching a settlement.
April 06, 2023
6th Circuit Dismisses Church’s Appeal Over Water Damage No-Coverage Ruling

CINCINNATI — The Sixth Circuit U.S. Court of Appeals granted a stipulated motion to dismiss with prejudice filed by parties in an appeal of a federal district court’s finding that an insurer did not breach its contract with a church by failing to provide coverage for water damage stemming from a leaky roof based on the policy’s negligent work exclusion, which bars coverage for the claim.
April 06, 2023
Ruling Freeing Insurer Of Duty To Defend In Defects Suit Appealed To 9th Circuit

SEATTLE — Homeowners will appeal a federal judge’s ruling that an insurer did not breach its duty to defend a subcontractor in an underlying construction defects lawsuit based on a policy exclusion that barred coverage for the damages the homeowners sought in bringing the suit under a series of new construction exclusions, the homeowners stated in a notice of appeal filed in Washington federal court.
April 06, 2023
Builder Failed To Show Insurer Lacked Diligence In Defective Wall Investigation

GREENBELT, Md. — A federal judge in Maryland granted an insurer’s motion for dismissal of statutory and common-law bad faith claims brought by a general contractor in a coverage dispute over a faulty wall system installed in a construction project, ruling that the contractor failed to show that the insurer failed to provide the necessary diligence in investigating and, ultimately, denying the claim.
April 06, 2023
Parking Garage Owner Appeals Ruling In Design Defects Suit To D.C. Circuit

WASHINGTON, D.C. — A business appealed a grant of summary judgment in favor of commercial general liability (CGL) insurers in a coverage lawsuit stemming from crack repairs the business was required to make on structural supports in a parking garage based on faulty design and construction of the garage, according to a notice of appeal the business filed in District of Columbia federal court.
April 06, 2023
Suit Seeking Coverage For Alleged Negligent Installation Of Sewage Pipeline Stayed

SEATTLE — A Washington federal judge granted a joint motion to stay a coverage dispute arising out of an insured’s alleged negligent installation of a sewage pipeline until the underlying suit filed against the insured by an individual who was injured as a result of contact with raw sewage from the pipeline is resolved.
April 06, 2023
Excess Insurer Granted Summary Judgment In Highway Construction Coverage Suit

AUSTIN, Texas — A federal judge in Texas issued an order adopting a magistrate judge’s report and recommendation 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 and others over a faulty highway construction project be granted, ruling that he found “no clear error” in the recommendation.
April 06, 2023
Insurer Makes No Showing Why Default Should Be Overturned, Contractor Says

FLORENCE, S.C. — A South Carolina federal judge should deny a motion for relief from default judgment and to set aside entry of default filed by an insurer in a contractor’s coverage dispute stemming from water intrusion and other construction defect issues at a mixed-use development project because the insurer failed to provide a “satisfactory explanation for the default much less establish the ‘mistake, inadvertence, excusable neglect, or surprise’” as required, the contractor argues in an opposition brief.
April 05, 2023
Jury Awards Developer More Than $2.5M In Damages In Concrete Slab Coverage Suit

DENVER — A federal jury in Colorado on April 4 found that a real estate developer proved by a preponderance of the evidence that its insurer breached the terms of a builders risk policy in denying coverage for a cracked concrete slab at a condominium project and awarded the developer $2,541,218 based on three categories of asserted damages.
April 03, 2023
CGL Insurer Properly Pleaded Jurisdiction Over Claims In Defects Coverage Suit

LOUISVILLE, Ky. — Dismissal of a commercial general liability (CGL) insurer’s claims in a declaratory relief lawsuit against its insureds stemming from the insurer’s providing of a defense to the insureds in four separate construction defects lawsuits is not warranted because the insurer has sufficiently pleaded facts showing that a federal district court has personal jurisdiction over the claims asserted, a federal judge in Kentucky ruled.
April 03, 2023
Policy Exclusions Do Not Preclude CGL Coverage For Contractor In Defects Suit

FORT MYERS, Fla. — A federal judge in Florida granted summary judgment in favor of a contractor in a coverage dispute with its commercial general liability (CGL) insurer over the insurer’s duty to defend the contractor in an underlying construction defects lawsuit, ruling that policy exclusions cited by the insurer in denying the contractor a defense in the underlying action do not apply.
April 03, 2023
Stucco Exclusion Does Not Bar Coverage In Construction Defects Suit, Judge Rules

JACKSONVILLE, Fla. — An insurer is not entitled to summary judgment on its claim seeking a declaration that it owes no duty to defend a subcontractor in an underlying lawsuit alleging that the subcontractor installed defective stucco in the construction of a resort because a stucco exclusion contained in the insurer’s policies does not apply to all of the claims made against the subcontractor, a federal judge in Florida ruled.
March 31, 2023
Policy’s Ensuing Loss Exception Applies To Water Damage Claim

ROCHESTER, N.Y. — A New York trial court erred in denying partial summary judgment on the issue of liability in favor of homeowners in a coverage dispute against their insurer over water damage claims resulting from faulty plumbing work done on their home during a bathroom renovation because the water damage claim was covered under an ensuing loss exception to the policy’s faulty workmanship exclusion, a New York appellate panel ruled in reversing.
March 28, 2023
Court Lacks Jurisdiction Over Insurer’s Coverage Claims Against Roofer

PHILADELPHIA — A federal judge in Pennsylvania dismissed an insurer’s declaratory relief action stemming from an underlying faulty workmanship lawsuit against a roofing contractor, ruling that he lacks subject matter jurisdiction to hear the action under the Declaratory Judgment Act (DJA).
March 28, 2023
General Liability Insurer Dismissed From Mold Coverage Dispute

LAS VEGAS — Without providing further detail, a federal judge in Nevada dismissed a professional liability insurer’s claims against a contractor’s general liability insurer in a mold and moisture damage coverage dispute.
March 23, 2023
Judge: Defective IGUs Caused No Injuries, Property Damage To Condo Project

SAN DIEGO — An insurer is entitled to summary judgment on claims brought by a subcontractor stemming from defective window-wall systems furnished by the subcontractor and installed in a condominium tower project because the issues with defective insulated-glass units (IGUs) in the window-wall system did not involve any injury or property damage to anything other than the IGUs, a federal judge in California ruled.
March 23, 2023
Claims In Negligent Floor Painting Work Coverage Suit Pass Early Dismissal Test

LITTLE ROCK, Ark. — A federal judge in Arkansas denied an insurer’s motion to dismiss in a coverage dispute stemming from a painter’s negligent graphic and line painting work on a newly installed vinyl gym floor, ruling that a subcontractor plausibly stated its declaratory judgment and breach of contract claims.