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

Mealey's Construction Defects Insurance

November 05, 2024
Insurer Voluntarily Dismisses Remaining Defendants In Faulty Construction Coverage Suit

DENVER — A plaintiff insurer asked a Colorado federal court to dismiss the remaining defendants in a dispute over coverage for a construction company accused of causing damages to homes through faulty construction following settlements reached by the plaintiff insurer and defendant insurers.
November 04, 2024
Kentucky Panel Affirms No Coverage Ruling In Insurer’s Dispute With Contractor

FRANKFORT, Ky. — A Kentucky appeals court on Nov. 1 affirmed a lower court’s grant of a commercial general liability insurer’s motion for summary judgment in its declaratory judgment lawsuit disputing coverage for an underlying action brought against its general contractor insured, finding if the insured’s faulty workmanship is the cause of damage to a swimming pool that it installed, then coverage does not apply because it is not an accident or occurrence, and coverage would still not apply if another contractor caused the damage because the policy covers the actions and liabilities of only the insured.
November 04, 2024
Federal Judge Dismisses Equitable Contribution Suit After Insurers Reach Settlement

SAN DIEGO — The same day the parties filed a stipulation to dismiss, a federal judge in California dismissed with prejudice the insurer’s lawsuit seeking equitable contribution from another insurer after it was left to defend a subcontractor against underlying claims that it installed faulty concrete in a parking garage.
October 28, 2024
Judge: CGL Insurer Has No Duty To Defend Against Suit Alleging Defective Work

EL DORADO, Ark. —A federal judge in Arkansas granted a commercial general liability insurer’s motion for summary judgment in its lawsuit seeking a declaration that it has no duty to defend its insured against underlying breach of contract and breach of warranty of sound workmanship claims for unfinished construction and fraud for misrepresenting both his credentials and background as a construction contractor, finding that the insured’s alleged actions giving rise to property damage “were undoubtedly ‘first set in motion’” before the policy began.
October 28, 2024
5th Circuit Dismisses Subcontractor Insurer’s Appeal After Settlement Announced

NEW ORLEANS — One day after the parties announced they reached a settlement, the Fifth Circuit U.S. Court of Appeals dismissed a subcontractor insured’s appeal of a Texas federal court’s finding that it is not entitled to equitable contribution from another insurer because of policy exclusions related to suits seeking contribution.
October 28, 2024
Insurer Asks California Court To Dismiss Subrogation Suit Against Roofer

LOS ANGELES — An insurer seeks dismissal with prejudice of its entire subrogation lawsuit against a roofer in a case that was consolidated with a condominium homeowners association’s breach of contract and bad faith lawsuit arising from storm damage to the roof of a Studio City building that housed 31 luxury condominiums.
October 23, 2024
Judge Dismisses Insurers Following Settlement In Faulty Construction Coverage Suit

DENVER — A federal judge in Colorado issued two minute orders dismissing with prejudice two defendant insurers and their subcontractor insureds from a dispute over coverage for a construction company accused of causing damages to homes through faulty construction after the plaintiff insurer and defendant insurers reached settlements.
October 21, 2024
Insured Appeals No Coverage Ruling In Suit Over Improperly Constructed Walls

TACOMA, Wash. — An insured file a notice indicating it is asking the Ninth Circuit U.S. Court of Appeals to review a Washington federal judge’s findings that an insurance policy’s impaired property exclusion bars coverage for underlying damage caused by improperly constructed retaining walls and that the “sudden and accidental injury” exception to the exclusion does not apply.
October 21, 2024
CGL Insurer: Panel’s Opinion Contradicts Pennsylvania Law As To Faulty Workmanship

PHILADELPHIA — A commercial general liability insurer filed a petition for rehearing en banc challenging the Third Circuit U.S. Court of Appeals’ per curiam opinion that vacated a lower federal court’s summary judgment ruling in its favor in a coverage dispute arising from a construction company insured’s allegedly defective renovation work, arguing that the panel’s opinion “contradicts Pennsylvania law that faulty workmanship is not an ‘occurrence,’ regardless if the damage at issue extends beyond the scope of a contractor’s work.”
October 18, 2024
Contractor Appeals No Coverage Ruling In Suit Arising From Alleged Faulty Roof Work

NEW YORK — A contractor filed a notice indicating that it is appealing a New York federal court’s ruling that adopted a magistrate’s report and recommendation in concluding that insurers owe no coverage for an underlying lawsuit that accuses the contractor and a subcontractor of faulty work on roofs in a New York City apartment complex that failed during Hurricane Sandy.
October 14, 2024
S.C. Federal Judge Says No Coverage Owed To Insured For Failure To Disclose

GREENVILLE, S.C. — A federal judge in South Carolina has granted a homeowners insurer’s motion for judgment after determining that it had no duty to defend and indemnify a policyholder sued for failing to disclose water intrusion issues during the sale of his townhome because the policy does not provide coverage for the insured’s alleged failure to disclose information during the sale of the property.
October 11, 2024
Judge Vacates Trial In Equitable Contribution Suit After Parties Announce Settlement

SAN DIEGO — A federal judge in California vacated a trial scheduled for Nov. 19 in an insurer’s lawsuit seeking equitable contribution from another insurer after it was left to defend a subcontractor against underlying claims that it installed faulty concrete in a parking garage, noting that the parties indicated they have reached a settlement.
October 11, 2024
Judge Partly Grants Insurer’s Motion To Dismiss In Coverage Dispute Over Settlement

DENVER — A federal judge in Colorado granted in part and denied in part a defendant insurer’s partial motion to dismiss a plaintiff insurer’s lawsuit seeking contribution for an underlying settlement arising from claims that the subcontractor insured’s defective and cracking stucco work resulted in property damage at a retirement community, dismissing the claims for declaratory judgment and common-law and statutory bad faith.
October 08, 2024
Panel Vacates, Remands No Coverage Ruling In Dispute Over Defective Renovation Work

PHILADELPHIA — The Third Circuit U.S. Court of Appeals vacated a District Cout’s summary judgment ruling in favor of a commercial general liability insurer of a construction company found to have performed defective renovation work on the appellant’s property, finding that the appellant’s claim for damage to the chimney and concrete pads could potentially constitute occurrences.
October 04, 2024
Panel Vacates Portion Of Ruling Issued In Insurer’s Favor In Mold Coverage Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals vacated a district court’s summary judgment ruling in favor of an insurer on breach of contract, declaratory judgment and bad faith claims after determining that the insured met its burden of proving that there is a potential of coverage for mold damage even if there was damage that existed before the issuance of the policy.
October 04, 2024
Judge Extends Deadline For Early Neutral Evaluation In Insurer’s Subrogation Suit

BURLINGTON, Vt. —A federal chief judge in Vermont granted a defendant’s motion to extend the deadline for early neutral evaluation in a property insurer’s subrogation lawsuit arising from water losses that occurred at its insureds’ property as a result of the purportedly defective design, construction, maintenance and repairs of a sprinkler system.
October 02, 2024
Professional Insurer, Contractor Settle Cross-Claims In Mold Damage Coverage Suit

LAS VEGAS — A professional liability insurer and a contractor filed a notice in a Nevada federal court indicating that they have settled their cross-claims in a mold and moisture damage coverage dispute.
October 02, 2024
Judge: Insurer Has Duty To Defend, Indemnify Against Claims Arising From Collapse

CHICAGO — Granting an insured’s motion for partial summary judgment, a federal judge in Illinois held that an insurer has a duty to defend the insured against an underlying action alleging that the insured’s excavation work on ultraviolet disinfection facilities caused the collapse of an embankment supporting tracks for a line on the Chicago Transit Authority (CTA) and has a duty to indemnify the insured against a second lawsuit brought by the project’s general contractor.
October 01, 2024
Fact Issues Exist On Whether Coverage Is Owed For Water, Mold Damages, Judge Says

LOS ANGELES — A California federal judge denied a motion for summary judgment filed by insurers that denied coverage for mold and water damages sustained in numerous buildings of an insured’s construction project because questions of fact exist as to whether the policies’ fungus extension and delay in opening extension afford coverage and whether the policies’ exclusion for cost of making good (COMG) excluded coverage for any damage caused by faulty workmanship.
October 01, 2024
Insurer Can Pursue Subrogation Against Engineering Firm, Illinois High Court Rules

SPRINGFIELD, Ill. — The Illinois Supreme Court affirmed an appeal court’s reversal of a lower court’s grant of summary judgment to an engineering firm in a builders risk insurer’s suit seeking subrogation damages for the flooding of a Chicago college building under construction, agreeing with the appeals court that the trial court erred in finding that the insurer does not meet the prerequisites for equitable subrogation and concluding that none of the facts or provisions barred the insurer’s subrogation action against the engineer.
September 30, 2024
Contractor Says Coverage Is Owed For Damages To Entirety Of Building

CINCINNATI — A federal district court erred in refusing to find that coverage is owed for damages to the entirety of a building as a result of the collapse of some of the bricks from one of the building’s walls, the contractor says in an appellant reply brief filed in the Sixth Circuit U.S. Court of Appeals.
September 30, 2024
Reinsurer’s Declaratory Judgment Suit Is Tossed For Lack Of Contractual Privity

BROOKLYN, N.Y. — Ruling in part that a reinsurer “failed to plead privity or third-party beneficiary status” and therefore failed to state any claims, a New York federal judge on Sept. 27 dismissed the lawsuit in which the reinsurer sought a declaratory judgment regarding state court litigation arising from a building’s partial collapse.
September 30, 2024
Judge Dismisses Insurer’s Subrogation Suit Stemming From Parking Garage Collapse

LEXINGTON, Ky. — A federal judge in Kentucky dismissed with prejudice all remaining claims in an insurer’s subrogation lawsuit arising from a parking garage collapse after the parties reached a settlement.
September 23, 2024
Rain Exclusion Bars Coverage For Contractor, 9th Circuit Affirms

SAN FRANCISCO —The Ninth Circuit U.S. Court of Appeals affirmed a lower federal court’s grant of summary judgment in favor of insurers in a contractor’s coverage dispute stemming from water intrusion damages caused by snow and rainfall during the construction process, agreeing that the insurers’ denial of the claim was proper based on the policies’ rain exclusion.
September 23, 2024
Panel: Fact Issues Invalidate Summary Judgment In Faulty Grain Silo Coverage Suit

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Sept. 20 reversed a lower federal court’s finding that an insurer had no duty to indemnify a contractor in a farmers cooperative’s underlying lawsuit alleging defective construction of grain silos, finding that fact questions invalidate summary judgment and remanding.