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

Mealey's Construction Defects Insurance

February 26, 2025
Firm’s Window Installation Choices Were Intentional Despite No Intent To Injure

WICHITA, Kan. — A commercial general liability (CGL) insurer has no obligation to indemnify a contractor for damage it caused while installing windows in a courthouse because although the damage was unintentional, the firm’s construction decisions that ultimately led to the damage were intentional, a Kansas federal judge found, leading him to grant the insurer’s summary judgment motion.
February 24, 2025
Judge Refuses To Dismiss Construction Company’s Cross-Claims Against CGL Insurer

SACRAMENTO, Calif. — A federal judge in California denied a commercial general liability insurer’s motion to dismiss a construction company insured’s cross-claims for breach of contract, breach of the implied covenant of good faith and fair dealing and equitable contribution as assignee of an excess insurer that funded its $2,250,000 settlement of an underlying construction defects lawsuit.
February 24, 2025
Judgment Entered In CGL Insurer’s Favor After Parties Announce Settlement

SAN FRANCISCO — A federal judge in California entered judgment in favor of a commercial general liability insurer after the insured and its construction company insured notified the court that they have settled the insurer’s declaratory judgment lawsuit disputing coverage for an underlying construction defects lawsuit.
February 20, 2025
Highway Company Lacks Standing To Bring Claims Against Subcontractor’s Insurer

DALLAS — A federal judge found that a highway construction company lacked standing to bring a breach of contract claim against a subcontractor’s insurer because a state trial court still had jurisdiction in an underlying case to determine attorney fees in the dispute between the company and subcontractor.
February 18, 2025
Federal Judge Dismisses Subcontractor’s Suit Against Insurer After Parties Settle

OAKLAND, Calif. — A federal judge in California dismissed with prejudice a subcontractor insured’s breach of contract and bad faith lawsuit against its commercial liability insurer one day after the parties indicated that they have executed their settlement agreement.
February 18, 2025
Insurer Owed Contractor, Subcontractor A Defense In Condo Water Damage Row

NEW YORK — Concluding that a condominium had been “put to its intended use” prior to a water damage incident that arose during remodeling, a New York federal judge found that a commercial general liability insurer was obligated to defend both a contractor and subcontractor from claims brought by an adjoining unit owner.
February 18, 2025
Judge Issues Order After Parties Reach Settlement In Leaky Roof Coverage Dispute

McALLEN, Texas — The same day a property owner and a subcontractor’s estate filed a notice of settlement in a suit over coverage for a leaky replacement roof, a Texas federal judge ordered the parties to file dismissal documents disposing of the lawsuit within 30 days.
February 18, 2025
Defective Workmanship Claims Do Not Constitute Occurrence, Excess Insurer Argues

PHOENIX — An excess commercial insurer filed a declaratory judgment lawsuit in an Arizona federal court arguing that underlying defective workmanship allegations “standing alone do not constitute an ‘occurrence’” and repair of the purported defective workmanship or product fail to constitute “property damage” to trigger coverage, seeking a declaration that it has no duty to defend or indemnify its subcontractor insured and an underlying $6 million stipulated judgment cannot be enforced against it.
February 18, 2025
10th Circuit Rejects Condo Developer’s Petion For Panel Rehearing

DENVER — The 10th Circuit U.S. Court of Appeals denied a condominium developer’s petition seeking a panel rehearing of the court’s grant of a new trial following its reversal of a $2.54 million jury award in favor of the developer after finding that the developer cannot recover under a builders risk insurance policy for repair costs of a cracked concrete slab that it has not paid and has no obligation to pay.
February 13, 2025
COMMENTARY: The Top Twelve Insurance Coverage Decisions Of 2024

By Robert D. Chesler, Seán McCabe, Madilynne Lee and James A. Goodridge
February 07, 2025
8th Circuit: Exclusion Bars CGL Coverage For Loss Caused By Defective Design

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on Feb. 6 affirmed a lower federal court’s grant of summary judgment in favor of a commercial general liability insurer in an insured’s breach of contract and bad faith lawsuit seeking coverage for losses caused by a defectively designed hopper bin that catastrophically failed at a Mexico facility, agreeing with the lower court that the policy’s professional services exclusion barred coverage.
February 04, 2025
Judge: Subcontractors’, Contractor’s Insurers Owe Defense In Gym Water Leak Suit

LOS ANGELES — The “broad duty to defend” was triggered for both a contractor and two subcontractors in an underlying suit over damage from a water leak, a California federal judge found, leading her to partly grant the subcontractors’ motions to dismiss the commercial general liability (CGL) insurer’s suit seeking declarations that it was not obligated to provide coverage.
February 04, 2025
Condo Association’s Motion To Amend Complaint Against Insurers Deemed Untimely

JACKSONVILLE, Fla. — A condominium association, which is the assignee of a contractor’s rights in a dispute over insurance coverage for a construction defects lawsuit settlement, saw its motion to amend its complaint to correct a “drafting error” denied by a Florida federal judge who found that the plaintiff offered no justification to amend more than 10 months after the court-appointed deadline had passed.
February 03, 2025
Federal Judge Dismisses Suit After Condo Association, Insurer Settle All Claims

DALLAS — The same day the parties announced that they reached a settlement, a federal judge in Texas dismissed a condominium association’s breach of contract and bad faith lawsuit against its insurer seeking coverage for property damage caused by “construction, lack of maintenance, faulty repairs, defective materials, [and] storms.”
February 03, 2025
Insureds: Insurers ‘Flouted’ Order Compelling Discovery In Defects Coverage Suit

NEWARK, N.J. — Insureds asked a New Jersey court to dismiss their insurers’ lawsuit disputing coverage for an underlying construction defects lawsuit, arguing that the insurers “have refused to meaningfully participate in the discovery process, repeatedly ignored deadlines and discovery rules, flouted this Court’s Order compelling discovery, and otherwise delayed the progression of this litigation.”
February 03, 2025
Federal Judge Denies CGL Insurer’s Motion To Dismiss 2 Of Contractor’s Claims

OAKLAND, Calif.— A federal judge in California denied a commercial general liability insurer’s motion to dismiss a licensed general contractor insured’s claims for declaratory relief for the appointment of Cumis counsel and punitive damages in his lawsuit seeking coverage for an underlying lawsuit alleging that the work on a renovation project was negligent.
February 03, 2025
Judge Dismisses Cross-Claims Between Insurers, Subcontractor In Mold Damage Coverage Suit

LAS VEGAS — A federal judge in Nevada issued two orders dismissing with prejudice cross-claims between professional liability insurers and a subcontractor in a mold and moisture damage coverage dispute.
January 27, 2025
Subcontractor Offers Judgment In Suit Arising From Damage To Construction Project

FORT LAUDERDALE, Fla. — A subcontractor filed a notice in a Florida federal court serving offer of judgment to a plaintiff in its lawsuit alleging that a surety breached a performance bond by denying liability for damage to its construction project allegedly caused by the subcontractor’s “defective and deficient work.”
January 27, 2025
Federal Judge Refuses To Disturb Take-Nothing Judgment In Suit Over Negligent Work

HOUSTON — A federal judge in Texas on Jan. 24 denied plaintiffs’ motion for relief from a take-nothing judgment and motion for rehearing in their lawsuit seeking to recover an underlying $542,000 final default judgment against a construction company from the company’s insurer, finding that Federal Rule of Civil Procedure 60(b)(6) does not apply and Rule 60(d)(2) does not entitle the plaintiffs to relief.
January 27, 2025
Split Minnesota Panel: Insurer’s Claims Against Contractor Not Time-Barred

ST. PAUL, Minn. — A split panel of the Minnesota Court of Appeals found that an insurer’s breach of contract and negligence claims against a general contractor and subcontractor in a defective construction dispute are not time-barred under Minnesota’s statute of limitations, reversing a lower court’s order dismissing the case and remanding it to the trial court.
January 27, 2025
Condo Developer Asks 10th Circuit To Reconsider Ruling Granting New Trial

DENVER — A condominium developer filed a “relatively narrow” petition in the 10th Circuit U.S. Court of Appeals seeking a panel rehearing of the court’s grant of an new trial following its reversal of a $2.54 million jury award in favor of the developer after finding that the developer cannot recover under a builders risk insurance policy for repair costs of a cracked concrete slab that it has not paid and has no obligation to pay, arguing that rehearing is both “appropriate and necessary” to correct the court’s errors, preserve the parts of the jury verdict that were fairly found and “avoid the significant costs of a wholesale retrial.”
January 24, 2025
6th Circuit Denies Building Owner, Contractor’s Rehearing Petitions In Collapse Suit

CINCINNATI — The Sixth Circuit U.S. Court of Appeals denied petitions for rehearing filed by a building owner and a contractor, refusing to reconsider a panel’s finding that coverage is owed only for a portion of a wall that collapsed in a building that was undergoing renovation.
January 21, 2025
Building Owner Appeals Attorney Fee Award In Coverage Suit Over Structural Damage

PHOENIX — A building owner insured filed a notice in an Arizona federal court indicating that it is appealing the court’s order awarding $198,234 in attorney fees to a commercial property insurer after granting the insurer’s motion for summary judgment in the insured’s breach of contract and bad faith lawsuit seeking coverage for structural damage to its building.
January 21, 2025
Judge Tosses Insurer’s Claims Against Condo Corp. For Lack Of Personal Jurisdiction

NEW YORK — A federal judge in New York “easily” granted a Texas condominium corp.’s motion to dismiss an insurer’s declaratory judgment lawsuit arising from issues with an emergency mitigation project to repair property damage caused by Hurricane Harvey, finding that the court lacks personal jurisdiction over the defendant under New York's long-arm statute and that the defendant is not bound by the insurance policy’s forum selection clause.
January 10, 2025
Panel Reverses Ruling For Contractor, Remands To Grant Judgment To Insurer

WEST PALM BEACH, Fla. — A Florida appeals panel reversed a lower court’s final summary judgment in favor of a general contractor in its declaratory judgment lawsuit seeking coverage for water damage at a building project and remanded for the lower court to grant final summary judgment in favor of the insurer.