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

Mealey's Construction Defects Insurance

August 25, 2023
Contractor Appeals Rulings In Faulty Work Coverage Suit To 11th Circuit

WEST PALM BEACH, Fla. — A contractor has appealed to the 11th Circuit U.S. Court of Appeals a Florida federal court’s rulings granting summary judgment to its commercial general liability insurer, denying summary judgment to the contractor on its counterclaim for reformation and dismissing the claim and awarding the insurer final judgment in the insurer’s declaratory judgment suit stemming from a subcontractor’s alleged faulty installation of cladding and glazing systems in a construction project.
August 25, 2023
Insurer, Paver Settle Faulty Asphalt Installation Coverage Suit

NEW HAVEN, Conn. — A paving company and its insurer have stipulated in Connecticut federal court to the dismissal of the insured’s declaratory judgment suit against the insurer relating to coverage for an underlying construction defects lawsuit stemming from the insured’s allegedly faulty paving work in a parking lot after reaching a settlement.
August 25, 2023
Washington Panel Affirms Ruling For Insurer In Shower Leak Coverage Suit

SEATTLE — A homeowners insurer provided sufficient evidence that rot damage from a leaking shower was caused by construction defects and, therefore, not covered, a Washington appellate panel found in affirming a trial court’s summary judgment ruling and findings of fact and conclusions of law following a bench trial.
August 22, 2023
Mold Exclusion Bars Coverage For Negligence Suit Filed Against Plumber, Judge Says

TAMPA, Fla. — An insurer has no duty to defend its insured in an underlying suit alleging that the insured’s negligence in performing plumbing services caused a water leak that resulted in mold growth in the underlying plaintiff’s home because a mold exclusion in the insurer’s policies clearly bars coverage for the underlying suit, a Florida federal judge said.
August 22, 2023
Rescission Row Stayed Pending Resolution Of Underlying Suit Against Contractor

SAN FRANCISCO — A California federal judge granted a painting contractor’s motion for a stay in an insurer’s suit against the contractor seeking rescission of the contractor’s insurance policy and a declaratory judgment that it is not required to provide coverage to the contractor in an underlying breach of contract case, finding that a stay pending resolution of the underlying case is warranted in part due to the overlap between the cases such that issuing a stay “increases judicial efficiency.”
August 21, 2023
Judge Orders Insurer To Join Contractor, Subcontractor To Declaratory Suit

MIAMI — A federal judge in Florida on Aug. 18 ordered a commercial general liability insurer to join a general contractor and a subcontractor to its declaratory action against the subcontractor’s CGL insurers related to the defense and indemnification of the general contractor in an underlying construction defects suit, agreeing with a magistrate judge that they are indispensable parties and should be joined to the action.
August 21, 2023
Stucco Subcontractor Appeals Faulty Workmanship Coverage Ruling To 3rd Circuit

PHILADELPHIA — An insured stucco subcontractor has appealed to the Third Circuit U.S. Court of Appeals a ruling by a Pennsylvania federal judge granting judgment on the pleadings to two insurers that sought a declaration that they do not have to defend the insured against underlying litigation over water damage to homes in a residential community because the damages are alleged to have been caused by faulty workmanship and not an “occurrence.”
August 21, 2023
Parties In Roof Collapse Coverage Suit Agree To Dismissal After Reaching Settlement

NASHVILLE, Tenn. — The parties in a coverage dispute over a roof collapse that occurred at a vehicle manufacturer’s assembly plant during a re-roofing project have stipulated to the dismissal of the suit with prejudice after reaching a settlement.
August 17, 2023
Subcontractor, Insurer Precluded From Mentioning Alternative Insurance Sources

LAKE CHARLES, La. — Less than a month after denying summary judgment to a subcontractor’s commercial general liability insurer in a general contractor’s breach of contract and negligence suit stemming from the subcontractor’s allegedly faulty work, a federal judge in Louisiana granted the general contractor’s motion to exclude any mention of potential alternative sources of insurance during the trial, which is scheduled to begin Sept. 18.
August 15, 2023
All-Risk Policies Provide Coverage For Wind-Driven Rain, Federal Judge Says

SEATTLE — A Washington federal judge granted an insured condominium association’s motion for summary judgment in a coverage dispute over millions of dollars of hidden water damage sustained by the association’s buildings by wind-driven rain after determining that coverage is owed under two sets of policies for wind-driven rain when interpreting the policies’ language based on an ensuing loss provision and the efficient proximate rule.
August 15, 2023
Insurer Says District Court’s Ruling On Misrepresentations Must Be Reversed

ATLANTA — A district court’s ruling that an insurer could not demonstrate reliance upon its insureds’ fraudulent misrepresentations regarding mold damage in an insured hotel must be reversed because the district court failed to view the evidence in the insurer’s favor as the nonmoving party, an insurer argues in a cross-appeal reply brief filed in the 11th Circuit U.S. Court of Appeals.
August 10, 2023
Judge Dismisses Suit Over Fire Suppression Leak Coverage After Notice Of Settlement

TAMPA, Fla. — A federal judge in Florida has dismissed without prejudice a property owner and its general contractor’s suit seeking coverage for the repair of leaks in a fire suppression system installed in a mixed-use building and the resulting water damage after the parties indicated that they had reached a settlement.
August 10, 2023
Insurer’s Coverage Suit, Contractor’s Third-Party Claims Dismissed After Settlement

DENVER — A federal judge in Colorado has terminated an excess insurer’s contribution suit against a general contractor and others stemming from the settlement of an underlying arbitration arising from the alleged negligent design and construction of a residential and commercial building and the contractor’s third-party claims against its subcontractors after the parties notified the court that they had reached a global settlement.
August 10, 2023
3rd Circuit Dismisses Glass Installer’s Appeal Of Ruling For CGL, Umbrella Insurers

PHILADELPHIA — The Third Circuit U.S. Court of Appeals ordered the dismissal of a glass installer’s appeal of a June ruling that its commercial general liability and umbrella insurers are not liable to cover defense and indemnity costs it incurred in settling an underlying action alleging that a glass curtain wall it installed became visibly obstructed by a dark “dripping” material because there was no property damage caused by an occurrence during the policy periods.
August 10, 2023
Judge Grants Insurer’s Motion To Set Aside Default In Contractor’s Coverage Suit

FLORENCE, S.C. — Noting, among other things, that the South Carolina Department of Insurance, which accepted service on behalf of an insurer, has no confirmation that it received the complaint and summons, a federal judge in the state on Aug. 9 granted the insurer’s motion to set aside a default entered against it in a contractor’s coverage suit stemming from water intrusion and other construction defect issues at a mixed-use development project.
August 10, 2023
California Panel Reverses Ruling For Insurer In Builder’s SIR Refund Action

LOS ANGELES — Finding it unclear when a homebuilder exceeded the self-insured retention (SIR) amounts in homebuilders protective policies covering homes in several states, a California appellate panel reversed the trial court’s order sustaining its insurer’s demurrer on statute of limitations grounds of the builder’s suit seeking a refund for excess amounts it paid under the policies.
August 08, 2023
Subcontractor’s Appeal Of Faulty Workmanship Coverage Ruling Dismissed By 9th Circuit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals has granted a subcontractor’s motion to voluntarily dismiss its appeal of a lower court’s dismissal of its coverage dispute with its commercial general liability insurer stemming from the faulty installation of a foundation system for a new airport concourse and related improvements at Los Angeles International Airport (LAX).
August 08, 2023
Magistrate: Contractor, Subcontractor Must Be Joined To Insurer’s Declaratory Suit

MIAMI — A general contractor and a subcontractor are indispensable parties in a commercial general liability insurer’s declaratory action against the subcontractor’s CGL insurers related to the defense and indemnification of the general contractor in an underlying construction defects suit and, therefore, should be joined to the action, a federal magistrate judge in Florida recommended.
August 08, 2023
Pennsylvania Judge: Defective Work Claims Are Not An Occurrence To Trigger Coverage

STROUDSBURG, Pa. — A Pennsylvania judge found that faulty workmanship claims against an insured are not an occurrence to trigger coverage under its policy, granting the insurer’s motion for summary judgment on its counterclaim that it has no duty to defend or indemnify.
August 07, 2023
10th Circuit Finds No Coverage For Contractor Under CGL Policy, Reverses

DENVER — A contractor’s failure to install fire sprinklers when adding living quarters to a barn constituted property damage, but that damage was not caused by an “occurrence”; therefore, the contractor’s commercial general liability insurer owes no duty to defend it against an underlying lawsuit, the 10th Circuit U.S. Court of Appeals ruled Aug. 4, reversing a lower court’s grant of judgment on the pleadings in favor of the contractor.
August 03, 2023
Judge Denies Insurer JMOL Or New Trial, Insured Interest After Water Damage Verdict

MOBILE, Ala. — A federal judge in Alabama on Aug. 2 denied an insurer’s renewed motion for judgment as a matter of law or a new trial following a nearly $170,000 verdict against it in an insurance dispute over the handling of a property damage claim after Hurricane Sally, adopting as its own the insured church’s argument that it proved through expert testimony that its claimed losses were covered under the policy and that the jury was properly instructed as to causation.
July 27, 2023
2nd Circuit Issues Mandate After Parties In Roof Coverage Suit Withdraw Appeal

NEW YORK — The Second Circuit U.S. Court of Appeals on July 26 issued a mandate ordering the withdrawal of former homeowners’ appeal of a New York federal magistrate judge’s finding that insurers owe no duty to defend them in a lawsuit stemming from their alleged failure to disclose structural and environmental issues in connection with a home they sold.
July 27, 2023
Louisiana Federal Judge Denies Contractor’s Insurer New Trial In Water Intrusion Suit

NEW ORLEANS — A subcontractor’s insurer’s answer to a contractor’s insurer’s amended complaint filed after it moved for dismissal of the original complaint “did not moot its pending motion to dismiss,” a federal judge in Louisiana ruled July 26 in denying a motion for a new trial or reconsideration of the ruling dismissing its suit to recover damages it paid stemming from water damage caused by the subcontractor’s negligence in performing work on a home’s roof.
July 26, 2023
Damage Caused By Insured’s Fracking Work Is Not Occurrence, Panel Reiterates

PHILADELPHIA — Following a panel rehearing, a Third Circuit U.S. Court of Appeals panel on July 25 reiterated that an insurer owes no coverage to its insured for damages to natural gas wells caused by the insured’s fracking work because neither faulty workmanship nor failure to perform a contract in a workmanlike manner can be construed as an occurrence as required by the policy.
July 25, 2023
Farmers Cooperative Appeals Rulings In Defective Silo Construction Coverage Case

LAREDO, Texas — A farmers cooperative has appealed to the Fifth Circuit U.S. Court of Appeals a Texas federal judge’s June ruling that the insurer of a contractor it hired to build two grain silos has no duty to indemnify the contractor in the cooperative’s underlying lawsuit alleging that the construction was defective because the cooperative did not incur any “property” damage to trigger coverage and the policy exclusions bar coverage even if the underlying damages were deemed “loss of use” property damage.