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

Mealey's Construction Defects Insurance

March 27, 2024
Federal Judge: Ambiguities Mean Insurer Owes Defense To Damaged Home’s Owners

SAN DIEGO — A California federal judge granted in part a couple’s motion for partial summary judgment, finding that a renovator’s insurer owes them a duty to defend and indemnify due to damages caused to the couple’s duplex home while the renovator was replacing the roof because an ambiguously worded policy exclusion regarding apartments does not bar coverage.
March 26, 2024
Companies Appeal Finding They Are Owed No Defense From Subcontractor’s Insurer

LOS ANGELES — A building owner and a general contractor have appealed a California judge’s decision dismissing their lawsuit seeking payment from a subcontractor’s insurer after the judge agreed with the insurer that coverage was barred by a policy exclusion related to damage caused by the subcontractor’s faulty work.
March 26, 2024
Federal Judge: Policy Exclusions Don’t Bar Coverage For Bridge Damage

TAMPA, Fla. — A federal judge in Florida denied a subcontractor’s excess liability insurer’s motion for judgment on the pleadings, agreeing with a federal magistrate who said in a report and recommendation that several policy exclusions do not preclude the insurer from providing a defense to the subcontractor from claims that its work caused damage to girders on a Florida bridge.
March 26, 2024
Federal Judge: Coverage Barred By Construction Firm’s Precluded ‘Development’

LAS CRUCES, N.M. — A federal judge in New Mexico granted a construction firm’s insurer’s motion for summary judgment and dismissed the case with prejudice, finding that the insurer owes no equitable contribution to another of the firm’s insurers after the firm was sued for construction defects because of a policy exclusion that bars coverage if the firm engages in “real estate development activities.”
March 21, 2024
Insurer Failed To Show Faulty Work, Fungi Exclusions Bar Coverage For Assembly Work

AUGUSTA, Ga. — Summary judgment in favor of a commercial general liability insurer is not warranted because the insurer failed to show that its policy exclusions for faulty work and for fungi or bacteria apply to bar coverage for an underlying negligence suit stemming from the insureds’ assembly of a manufactured home that sustained water and mold damages following the delivery and assembly of the home, a Georgia federal judge ruled.
March 19, 2024
Judgment Granted To Insurer Seeking Policy Voidance For Material Misrepresentation

BIRMINGHAM, Ala. — An Alabama federal judge granted summary judgment to an insurer seeking to void policies and a declaration that it owes no coverage to the insureds, a construction company and its owner, in underlying suits filed against them alleging construction defects, finding that the insurer is entitled to summary judgment in part because “but for the misrepresentation,” the insurer would not have issued the policies with the applicable provisions.
March 15, 2024
Washington High Court: Policy Exception Revives Coverage For Condo’s Roof Collapse

OLYMPIA, Wash. — The Washington Supreme Court on March 14 found that an appeals court correctly reversed a lower court’s grant of summary judgment in an all-risk insurer’s favor in a coverage dispute stemming from condensation damage to a condominium’s roof, finding that a resulting loss exception in the insurance policy revives coverage, even if it would otherwise be precluded by a faulty workmanship exclusion.
March 15, 2024
11th Circuit Tosses Construction Insurance Appeal, Finds It Lacks Jurisdiction

ATLANTA — A panel of the 11th Circuit U.S. Court of Appeals dismissed an appeal brought by a subcontractor’s insurer arguing that it owed no duty to defend or indemnify its insured due to policy exclusions, finding that the judgment the insurer appealed was not final because it did not dispose of all claims against all parties.
March 14, 2024
Federal Judge: Insurer Owes No Soft Costs To Developer Due To Policy Exclusion

ST. LOUIS — A federal judge in Missouri dismissed a complaint brought by a property owner who sought soft costs and loss of rental income from a contractor’s insurer after the failure of a retaining wall at an apartment complex project, finding that the plain language of the insurance contract precludes coverage.
March 08, 2024
Contractor: 11th Circuit Must Affirm Judge’s Denial Of Insurer’s Attorney Fees

ATLANTA — A contractor tells the 11th Circuit U.S. Court of Appeals in a response brief that a Florida federal judge was correct to deny its insurer’s request for attorney fees in one of two ongoing appeals stemming from the federal judge’s finding that the contractor and a subcontractor were not entitled to a defense from the insurer due to the presence of a policy exclusion.
March 07, 2024
Federal Judge: No Coverage To Construction Firms Due To Townhome Project Exclusion

FORT LAUDERDALE, Fla. — A federal judge in Florida ruled that an insurer owes no defense or indemnification to its insured subcontractor that was accused of faulty work leading to water line damage on a townhome development project or the head contractor on the project, finding that a policy exclusion relating to residential construction operations bars coverage.
March 07, 2024
Contractor Seeks 6th Circuit’s Review Of Coverage Rulings In Wall Collapse Suit

CHATTANOOGA, Tenn. — Less than two weeks after a building owner filed a notice of appeal to the Sixth Circuit U.S. Court of Appeals, the contractor responsible for the building’s renovation work followed suit and filed its own notice of appeal, seeking review of a Tennessee federal judge’s ruling and judgment entered in favor of the insurer in the dispute between the building owner, contractor and insurer over coverage for the replacement of the building’s wall that fell during renovation work.
March 06, 2024
Judge Finds Insurer Need Not Defend Subcontractor For Work Completed Before Policy

CHARLESTON, S.C. — A federal judge in South Carolina on March 5 granted an insurer’s motion for summary judgment, finding that the insurer has no duty to defend a subcontractor from claims of structural issues in homes it helped build because of an exclusion in the insurance policy barring coverage if the work was completed before the beginning of coverage.
March 06, 2024
Construction Firm Appeals Ruling That It Isn’t Owed Defense Due To Records Issues

MONTGOMERY, Ala. — A construction firm on March 5 notified an Alabama federal court that it has appealed a judge’s finding that the firm’s insurer had no duty to defend the firm from allegations that it caused structural damage to a couple’s home because the firm failed to obtain written indemnity agreements from subcontractors that were required by the terms of the insurance policy.
March 05, 2024
Judge Upholds Arbitration Award Against Contractor In Construction Insurance Case

NEW YORK — A federal judge in New York upheld an arbitration panel’s decision awarding a contractor’s insurers $2.3 million, finding that the contractor owes the money as part of a settlement with a subcontractor the insurers said provided faulty concrete work for a construction project.
March 05, 2024
Panel: No Coverage Owed For Claims Arising From Warehouse Collapse Caused By Tornado

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals on March 4 affirmed a lower federal court’s summary judgment ruling in favor of an insurer in its lawsuit seeking a declaratory judgment that it had no duty to defend or indemnify its insured against underlying wrongful death and personal injury claims arising from a warehouse collapse that was caused by a tornado, finding that there is no coverage because the insured did not own, rent or occupy the warehouse when it collapsed.
March 04, 2024
Judge Finds Insurer Owes No Indemnification To Homeowners For Pool Failure

MISSOULA, Mont. — Multiple policy exclusions bar coverage for a Montana couple whose property was damaged by water draining from an improperly designed “disappearing floor” pool, a Montana federal judge found March 1, ruling that the insurer of the pool installation company has no duty to indemnify.
March 01, 2024
California Panel: Insurer Owed No Reimbursement; Contractor Not Additional Insured

SAN FRANCISCO — A California appellate panel ruled in an unpublished opinion that a subcontractor’s insurer owes no reimbursement to another of the subcontractor’s insurers in a dispute over upgrades performed on San Francisco condominiums because the contractor was not an additional insured under the subcontractor’s insurance policy.
March 01, 2024
11th Circuit Agrees Coverage For Construction Manager Barred By Exclusion

ATLANTA — In an unpublished Feb. 29 opinion, a panel the 11th Circuit U.S. Court of Appeals affirmed the finding of a federal judge in Florida who determined that an insurance policy’s professional services exclusion bars the insurer’s duty to defend an insured construction management company that was sued for construction defects at an apartment project where it served as a construction manager.
February 29, 2024
Travelers Appeals Finding It Wasn’t Owed Contribution In Construction Coverage

SANTA ANA, Calif. — A contractor’s insurer that sought equitable contribution and equitable indemnification from a subcontractor’s insurer filed a notice of appeal on Feb. 28 in a California federal court, appealing the ruling of a federal judge who found that the subcontractor’s insurer owed no defense to the contractor as an additional insured.
February 29, 2024
Insurers Settle Claims Over Subcontractors’ Insurers’ Duty To Reimburse Defense

FAYETTEVILLE, Ark. — After the parties stipulated to a voluntary dismissal, a clerk’s Feb. 28 order in a federal court in Arkansas dismissed with prejudice the claims between two insurers in a dispute over whether the insurers of subcontractors were obliged to reimburse a construction company’s insurer for its defense of claims of faulty work in an arbitration; the order is the latest in a series of orders dismissing other insurers from the action.
February 29, 2024
California Judge Finds Insurer Need Not Cover Damages Caused By Subcontractor

LOS ANGELES — A California judge has dismissed with prejudice a building owner and general contractor’s lawsuit seeking payment from a subcontractor’s insurer for an underlying $1.1 million default judgment entered against the subcontractor, agreeing with the insurer that coverage is barred by a policy exclusion precluding coverage for damage caused by the subcontractor’s faulty work.
February 28, 2024
Montana High Court Affirms Ruling In Contractor’s Favor In Its Suit Against Agent

HELENA, Mont. — The Montana Supreme Court on Feb. 27 determined that a lower court did not err in granting summary judgment as to liability in favor of a general contractor in its lawsuit alleging that its insurance agent failed to procure the coverage it requested, affirming a $1,205,518.63 final judgment in favor of the contractor in a coverage dispute arising from underlying negligence, professional negligence and breach of contract claims brought by the developer of a condominium building.
February 27, 2024
Louisiana High Court Refuses To Disturb Rulings In Favor Of Insurer, Engineer

NEW ORLEANS — The Louisiana Supreme Court on Feb. 27 refused to review an appeals court’s affirmation of a lower court’s summary judgment rulings in favor of an insurer and engineer in a lawsuit arising from a contractor’s claims that plans, specifications and bidding documents were inadequate and insufficient to properly construct a road in Terrebonne Parish, refusing to disturb the appeals court’s conclusion that because an engineer insured has no liability to Terrebonne Parish Consolidated Government (TPCG) as a matter of law, the engineer’s professional liability insurer also cannot be held liable to TPCG.
February 27, 2024
Federal Magistrate Recommends Finding Insurer Owes No Defense After Roof Failure

NEW YORK — A federal magistrate judge in New York recommended a ruling that an insurer owes no duty of defense or indemnification in an underlying suit that accuses a contractor and a subcontractor of faulty work on roofs in a New York City apartment complex that failed during Hurricane Sandy.