Preview: LexisNexis® Mealey's™ Construction Defects Insurance Legal News
LexisNexis® Mealey's™ Construction Defects Insurance Legal News
Headline Construction Defects Insurance Legal News from LexisNexis®
15 Lawsuits Over Defects In Insureds' Windows Constitute Separate 'Occurrences'
DES MOINES, Iowa - Fifteen lawsuits against insureds for alleged negligently designed or installed windows constitute separate "occurrences" under comprehensive general liability policies, an Iowa federal judge ruled March 31, granting partial summary judgment to the insureds (Pella Corp., et al. v. Liberty Mutual Insurance Co., No. 11-00273, S.D. Iowa).
Judge: Insured's Poor Work Does Not Trigger Insurer's Duty To Defend, Indemnify
DALLAS - Claims arising out of an insured's poor workmanship do not state allegations of property damage caused by an "occurrence," a Texas federal judge ruled March 10, finding that a commercial general liability insurer has no duty to defend or indemnify (Atlantic Casualty Insurance Co. v. PrimeLending and First Choice Construction LLC v. Connect Insurance Agency Inc., No. 15-1475, N.D. Texas; 2017 U.S. Dist. LEXIS 34425).
Insurer Has No Duty To Indemnify Faulty Work Settlement, 7th Circuit Says
CHICAGO - An insurer has no duty to indemnify a settlement of a faulty workmanship claim against a subcontractor, the Seventh Circuit U.S. Court of Appeals affirmed March 8, because claims of an insured's defective work resulting in damage to its own work do not constitute an "occurrence" caused by "property damage" (Allied Property & Casualty Insurance Co., et al. v. Metro North Condominium Association, No. 16-1868, 7th Cir.; 2017 U.S. App. LEXIS 4107).
Judge Stays Insurer's Duty To Indemnify Suit Pending Outcome In Defects Case
JACKSONVILLE, Fla. - An insurer's declaratory judgment action against an insured contractor and a condominium association regarding the duty to indemnify an underlying construction defects suit is premature, a Florida federal judge ruled March 31, staying rather than dismissing the action pending the outcome of the underlying suit (Mid-Continent Casualty Co. v. Nassau Builders Inc., et al., No. 16-921, M.D. Fla., 2017 U.S. Dist. LEXIS 48526).
Judge: Insurer Breached Duty To Defend, Indemnify Construction Suit Settlement
ANCHORAGE, Alaska - An insurer breached its duty to defend and indemnify an insured for a settlement of underlying claims arising out of a breach of contract dispute on a construction project, an Alaska federal judge ruled March 16; however, the judge held that the insurer did not breach its duty of good faith (KICC-Alcan General, joint venture v. Crum & Forster Specialty Insurance Company Inc., No. 15-00255, D. Ala., 2017 U.S. Dist. LEXIS 37560).
Federal Judge Stays Duty- To-Indemnify Issue In Insurers, Insured Dispute
RALEIGH, N.C. - Although allowing a coverage dispute between four insurers and an insured to proceed as to the duty to defend a construction defect lawsuit, a North Carolina on March 1 stayed the duty-to-indemnify issue pending resolution of the underlying case (Westfield Insurance Co. v. Weaver Cooke Construction LLC, et al., No. 15-169, E.D. N.C.; 2017 U.S. Dist. LEXIS 28662).
Texas Federal Judge Says Carrier Has A Duty To Indemnify Insured
HOUSTON - A Texas federal judge on Feb. 27 determined that an insurer has a duty to indemnify its insured for an underlying product liability suit but found no support for the insured's extracontractual claims and, accordingly, dismissed those claims against the insurer (U.S. Metals Inc. v. Liberty Mutual Group Inc., et al., No. 12-379, S.D. Texas, 2017 U.S. Dist. LEXIS 32507).
Judge Rules On Insurer's Duty To Defend, Indemnify Construction Defects Case
BIRMINGHAM, Ala. - A commercial liability insurer had a partial duty to defend one of two insureds in an underlying construction defects case, an Alabama federal judge ruled March 16, granting in part and denying in part summary judgment to the insurer; however, the judge denied summary judgment on the duty-to-indemnify issue without prejudice to the insurer's right to refile (Auto-Owners Insurance Co. v. Wier-Wright Enterprises Inc. d/b/a Doug Wiersig Homes, et al., No. 15-1118, N.D. Ala.; 2017 U.S. Dist. LEXIS 37477).
Federal Judge Decides Motions In Construction Defects Insurance Dispute
SAN JOSE, Calif. - In a coverage dispute between various insurers over their responsibility toward an underlying construction defects settlement, a California federal judge on March 7 addressed four summary judgment motions on multiple key issues from the duty to defend to the number of occurrences (St. Paul Fire and Marine Insurance Co. v. Insurance Company of the State of Pennsylvania, et al., No. 15-02744, N.D. Calif.; 2017 U.S. Dist. LEXIS 32551).
Insureds Failed To Prove Bad Faith Claim, Delaware Supreme Court Concludes
WILMINGTON, Del. - Insureds failed to establish evidence that their insurer did not have a reasonable justification for denying their claim for water damage from a broken toilet to their condominium unit, the Delaware Supreme Court ruled March 13, affirming a directed verdict to the insurer on a bad faith claim (Debra Bennett and William Bennett v. USAA Casualty Insurance Co., No. S10C-02-010, Del. Sup.; 2017 Del. LEXIS 105).
Judge Finds Excess Insurer Waived Communications Privilege In Defects Claim File
CHARLESTON, S.C. - An excess insurer waived the attorney-client privilege on communications contained in its claim files with regard to the denial of a claim arising out of construction defects, a South Carolina federal judge held March 31 (ContraVest Inc., et al. v. Mt. Hawley Insurance Co., No. 15-00304, D. S.C., 2017 U.S. Dist. LEXIS 48638).
Homeowner's Insurer Paid Full Amount Of Claims, Magistrate Judge Concludes
PHILADELPHIA - A homeowner's insurer paid the entire amount it owed to insureds for damage to their home because the insureds failed to offer expert reports to rebut the insurer's evidence that the unpaid portions were not covered, a Pennsylvania federal judge ruled March 22, granting summary judgment to the insurer on a breach of contract claim (Scot Fazio and Dawn Fazio v. State Farm Fire and Casualty Co., No. 16-1987, E.D. Pa., 2017 U.S. Dist. LEXIS 41604).
Panel Upholds Breach Of Contract Award, Reverses Bad Faith Awards Against Insurer
BEAUMONT, Texas - A Texas appeals panel on March 9 affirmed a jury's $15,000 award for breach of contract damages but reversed the jury's $20,000 award of actual damages that resulted from an insurer's alleged unfair settlement practices and the jury's award of additional damages of $60,000 that resulted from the finding that the insurer knowingly engaged in unfair settlement practices, rendering judgment that an insured take nothing as to the claims (State Farm Lloyds v. Dennis Webb, No. 09-15-00408-CV, Texas App., 9th Dist.; 2017 Tex. App. LEXIS 1997).
Judge: Subcontractors Owe Defense To Subrogated Insurer's Negligence Claim
BOSTON - Three subcontractors owe a defense to a general contractor against negligence and breach of the implied warranties of habitability and good workmanship claims brought by a subrogated insurer for water damage in a condominium building, a Massachusetts federal judge ruled March 22 (Philadelphia Indemnity Insurance Co. v. Consigli Construction Company Inc., et al. v. Central Ceilings Inc., No. 14-14687, D. Mass., 2017 U.S. Dist. LEXIS 41444).
'Continuous, Progressive Injury' Exclusion Relieves Insurer Of Duty To Defend, Indemnify
SACRAMENTO, Calif. - In recommending that default judgment be granted for an insurer, a federal magistrate judge in California on March 9 found that the insurer has no duty to defend or indemnify an underlying construction defects case against an insured because the "continuous or progressive injury and damage" exclusion precludes coverage (Mt. Hawley Insurance Co. v. Crane Development Corp., et al., No. 16-0892, E.D. Calif.; 2017 U.S. Dist. LEXIS 34175).
Judge: Insurer Properly Relied On 'Maintenance' Exclusion To Bar Coverage
PHILADELPHIA - Evidence supported an insurer's reliance on a "maintenance" exclusion to deny coverage for water damage caused by an insured's failure to maintain his furnace, the Third Circuit U.S. Court of Appeals ruled March 6, affirming summary judgment in favor of the insurer on breach of contract and bad faith claims handling (David Dougherty v. Allstate Property and Casualty Insurance Co., No. 16-2680, 3rd Cir.; 2017 U.S. App. LEXIS 3930).
9th Circuit: Business Risk Exclusions Bar Coverage For Construction Defects Suit
SAN FRANCISCO - Two business risk exclusions found in a commercial general liability (CGL) insurance policy bar coverage for a construction defects lawsuit, the Ninth Circuit U.S. Court of Appeals held March 2, affirming summary judgment to an insurer on breach of contract and bad faith claims (Archer Western Contractors Ltd. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 15-55648, 9th Cir.; 2017 U.S. App. LEXIS 3796).
Judge: Water Exclusion Bars Coverage To Insureds For Damage From Collapsed Pipe
MIAMI - An insurance policy's water exclusion precludes payment to insureds for water damage and other repairs stemming from their collapsed and backed-up pipe, a Florida federal judge ruled March 28, granting summary judgment to the insurer (Ken Cameron and Michelle Cameron v. Scottsdale Insurance Co., No. 16-21704, S.D. Fla., 2017 U.S. Dist. LEXIS 45474).
Judge Awards $187,604.17 For Costs Associated With Insured's Work On Fuel Tank
HOUSTON - Granting a motion for final entry of judgment, a Texas federal judge ruled March 29 that a commercial general liability insurer owes a contractor $187,604.17 for costs associated with an insured subcontractor's work on a fuel tank (Mid-Continent Casualty Co. v. Petroleum Solutions, Inc., et al., No. 09-0422, S.D. Texas, 2017 U.S. Dist. LEXIS 46285).
Excess Insurer Had No Duty To Indemnify Construction Defect Suit, Judge Finds
DENVER - An excess insurer had no duty to indemnify two insureds for a construction defect case because the primary policy was not yet exhausted, a Colorado federal judge ruled March 20, dismissing a reimbursement lawsuit filed by two other insurers seeking monies for the defect case's settlement (Zurich American Insurance Co. and American Guarantee and Liability Insurance Co. v. Acadia Insurance Co., No. 14-01273, D. Colo., 2017 U.S. Dist. LEXIS 39579).
Federal Judge Dismisses Excess Insurer's Coverage Case Based Upon Article 3
ORLANDO, Fla. - An excess insurer's claims regarding its duty to defend and indemnify an insured against claims of negligent construction in a condominium project do not satisfy the case and controversy requirement of Article III, Section 2, of the U.S. Constitution, a Florida federal judge ruled March 2, dismissing the case (Interstate Fire & Casualty Co. v. McMurry Construction Company Inc., et al., No. 16-841, M.D. Fla.; 2017 U.S. Dist. LEXIS 29501).
Judge Defines 'Collapse,' Finds Insurer Has No Duty To Indemnify Damage
CHICAGO - A homeowners insurance policy was intended to cover only a peril in which a building loses its character as a building, an Illinois federal judge ruled March 14, in defining "collapse" under the policy and finding that the insurer has no duty to indemnify damage caused by a contractor to the insureds' home (The Travelers Home and Marine Insurance Co. v. Patrick Walsh and Colleen Walsh, No. 15-3063, N.D. Ill.; 2017 U.S. Dist. LEXIS 35841).
Federal Judge Bars Expert Testimony On Some Repair Costs For Insureds' Damages
TULSA, Okla. - An Oklahoma federal judge on March 14 excluded testimony from an expert on estimates to repair a master control center (MCC) and electrical costs as a result of insureds' damages caused by a contractor and subcontractor's inadequate design and installation of the concrete columns but allowed other estimates to be admitted (Lexington Insurance Co., et al. v. Newbern Fabricating Inc. and Baucom Concrete Construction Inc. & Newbern Fabricating Inc. v. Doveland Engineering Co., No. 14-0610, N.D. Okla.; 2017 U.S. Dist. LEXIS 36133).
Issues Of Fact Exist On Cause Of Collapse And Insured's Knowledge, Federal Judge Says
PEORIA, Ill. - Because questions of fact exist regarding the cause of the collapse of a building's second floor and the insured's knowledge of the condition of the building, an Illinois federal judge on March 21 denied an insurer's motion for summary judgment (WAMFAM5 Inc. v. Nova Casualty Insurance Co., No. 15-1195, C.D. Ill., 2017 U.S. Dist. LEXIS 40159).
Insurer's Case On 'Collapse' Issue On Retrial Fails Without Expert Testimony, Judge Says
SEATTLE - Having excluded an insurer's expert testimony in a retrial as inadmissible, a Washington federal judge on March 1 ruled that the insurer cannot establish whether alleged "collapse" conditions observed in 2008 at an insured's condominium complex were present during another insurer's policy periods (Houston General Insurance Co. v. St. Paul Fire & Marine Insurance Co., et al., No. 11-2093, W.D. Wash.; 2017 U.S. Dist. LEXIS 29177).
Judge Dismisses Insured's Declaratory Relief Claim In Water Damage Dispute
MIAMI - Dismissing an insured's request for declaratory relief on coverage for water damage to its property, a Florida federal judge held March 1 that the insured "failed to plead facts necessary to establish any dispute or doubt under the insurance policy" and "failed to allege ambiguity" with regard to a loss settlement provision (Espadon Group Inc. v. Lexington Insurance Co., No. 16-24413, S.D. Fla.; 2017 U.S. Dist. LEXIS 29918).
Judge Authorizes Liquidator To Pay Portion Of Homeowner Class Claim
CHICAGO - An Illinois judge on March 14 approved a liquidator's recommendation of a payment to a class of homeowners that won a construction defect lawsuit against a group of developers insured by an insolvent insurer (In the matter of the liquidation of Legion Indemnity Co., No. 02 CH 06695, Ill. Cir., Cook Co., Chanc. Div.).
Oregon High Court Finds Insured Is Owed Attorney Fees In Coverage Dispute
SALEM, Ore. - Addressing the state's requirements for a plaintiff to recover attorney fees from an insurer in a coverage lawsuit, the Oregon Supreme Court ruled Feb. 2 that a homeowner pursuing a claim for a leaky sink can be awarded attorney fees without a formal judgment (Cary Long v. Farmers Insurance Company of Oregon, No. S063701, Ore. Sup.).
Judge Finds Subcontractor Exception Negates 'Your Work' Exclusion In Insurance Policy
ORLANDO, Fla. - On reconsideration, a Florida federal judge ruled Feb. 6 that a commercial general liability insurer had a duty to defend a lawsuit over damage to a condominium complex because the subcontractor exception negates application of the "your work" exclusion (Evanston Insurance Co. v. DiMucci Development Corporation of Ponce Inlet Inc. and Towers Grande Condominium Association, No. 15-486, M.D. Fla., 2017 U.S. Dist. LEXIS 16154).
Failure To Perform Claim Is Not An 'Occurrence' Under Insurance Policy, Judge Says
EAST ST. LOUIS, Ill. - Allegations of an insured's failure to perform do not constitute an "occurrence" triggering coverage under a commercial general liability insurance policy, an Illinois federal judge ruled Jan. 31, agreeing with the insurer that they "are nothing more than claims of disappointed expectations in the performance of a construction contract" (Owners Insurance Co. v. James C. Warren d/b/a Warren Exterior and Remodeling, et al., No. 15-00349, S.D. Ill.; 2017 U.S. Dist. LEXIS 13171).
Judge: Fact Issues Exist On If Roofing Limitation Bars Coverage For Insured
CHARLESTON, S.C. - A genuine issue of material fact exists as to the suitability of a roof covering on a homeowner's roof in order to trigger a roofing limitation endorsement in a commercial general liability insurance policy that would preclude coverage for damages, a South Carolina federal judge held Feb. 6 (Williford Roofing Inc. v. Endurance American Specialty Insurance Co., et al., No. 16-01830, D. S.C., 2017 U.S. Dist. LEXIS 16033).
10th Circuit Panel Says No Breach Of Contract For Denying Claim For Damages
DENVER - Because an insured failed to establish that it suffered water damage to "covered property" at a renovation project under a builders risk policy, the 10th Circuit U.S. Court of Appeals on Feb. 16 affirmed a Colorado federal judge's finding that the insurer properly denied coverage and did not breach its contract (Gerald H. Phipps, Inc. d/b/a GH Phipps Construction Co. v. Travelers Property Casualty Company of America, No. 16-1039, 10th Cir.).
Judge: 'Vacancy Provision' Does Not Exclude Insured's Water Damage Claim
SCRANTON, Pa. - Because more than 31 percent of an insured condominium development's common areas were in use at the time a loss for water damage occurred, a Pennsylvania federal judge ruled Feb. 10 that an insurance policy's "Vacancy Provision" does not apply to exclude coverage for the insured's claim (Village Heights Condominium Association v. The Cincinnati Insurance Co., No. 16-554, M.D. Pa., 2017 U.S. Dist. LEXIS 19425).
Anti-Concurrent Causation Clause Precludes Coverage For Water Damages, Panel Says
TOLEDO, Ohio - A trial court did not err in granting summary judgment in favor of an insurer because it is clear that the policy's anti-concurrent causation clause precluded the insureds' claim for water damages, the Sixth District Ohio Court of Appeals said Feb. 24 (Chad Hartman, et al. v. Erie Insurance Co., No. WD-16-022, Ohio App., 6th Dist., 2017 Ohio App. LEXIS 666).
New York Justice: Insurer's Claims Against Sprinkler Company Must Be Dismissed
ITHACA, N.Y. - A New York justice on Feb. 1 determined that an insurer's claims against a company with which the insured contracted to install a sprinkler system must be dismissed because the applicable contract between the insured and the defendant included a subrogation waiver that bars the insurer from seeking reimbursement from the defendant (Philadelphia Indemnity Insurance Co., as subrogee of Country Club of Ithaca, NY Inc. v. Buffalo Hotel Supply Co. Inc., et al., No. EF2015-0101, N.Y. Sup., Tompkins Co., 2017 N.Y. Misc. LEXIS 346).
Progressive Injury Exclusion Bars Coverage For Water Damage Suits, Judge Says
SAN FRANCISCO - A policy's continuous or progressive injury exclusion bars coverage for two underlying suits filed against an insured because the insured's repair work to address the water intrusion problems was completed more than four years before the inception of the policy, a California federal judge said Jan. 31 (Saarman Construction Ltd. v. Ironshore Specialty Insurance Co., No. 15-3548, N.D. Calif., 2017 U.S. Dist. LEXIS 13633).
Insured's Breach Of Contract Is Barred By 2-Year Statute Of Limitations, Judge Says
DENVER - A two-year statute of limitations precludes an insured's breach of contract claim against its insurer for denied coverage for property damage to commercial properties, a Colorado federal judge ruled Feb. 13 (The Pinewood Townhome Association Inc. v. Auto-Owners Insurance Co., No. 15-01604, D. Colo.; 2017 U.S. Dist. LEXIS 19999).
Insurer, Homeowners Debate Coverage For Contractor's Judgment In Texas High Court
AUSTIN, Texas - In briefs filed with the Texas Supreme Court, a couple and their contractor's insurer dispute whether coverage for an underlying construction defects judgment against the insurer is precluded under an adversarial trial rule that an appeals court deemed inapplicable (Great American Insurance Co., et al. v. Glen Hamel, et al., No. 14-1007, Texas Sup.).
Judge Remands Case For Insurers' Failure To Get Unanimous Agreement
CHARLESTON, S.C. - Two insurers failed to satisfy the "rule of unanimity" requirement by including a third insurer when removing a breach of contract and bad faith dispute over coverage for a construction defect lawsuit, a South Carolina federal judge ruled Feb. 23, remanding the case due to a defective removal notice (Baker Roofing Co. v. American Guarantee and Liability Insurance Co., et al., No. 16-3776, D. S.C.; 2017 U.S. Dist. LEXIS 25144).
Judge Certifies Question On Statute Of Limitation In Contractor's Bad Faith Suit
DENVER - In a bad faith lawsuit between a contractor and insurer, a Colorado federal judge on Feb. 8 certified a question to the state's high court on whether a claim under Colorado Revised Statutes Section 10-3-1116 is subject to a one-year statute of limitations and applicable to "All actions for any penalty of forfeiture of any penal statutes" (Rooftop Restorations Inc. v. American Family Mutual Insurance Co., No. 15-2560, D. Colo., 2017 U.S. Dist. LEXIS 17787).
Insureds Overcome Insurer's Summary Judgment Motion In Bad Faith Suit
NEW HAVEN, Conn. - Insureds have provided enough evidence to support their claims for insurance breach of contract and bad faith against their homeowners insurance provider to overcome the insurer's motion for summary judgment, a federal judge in Connecticut ruled Feb. 21 in denying the insurer's motion and granting a similar motion filed by the insureds' former insurer (Stephen A. Metsack, et al. v. Liberty Mutual Fire Insurance Co., et al., No. 14-1150, D. Conn., 2017 U.S. Dist. LEXIS 24062).
Federal Judge: Fact Issues As To Economic Damages Defeat Summary Judgment
DENVER - A Colorado federal judge on Feb. 16 held that there are genuine issues of material fact as to what $125,000 in economic damages awarded against an insured encompasses, denying an insurer's motion for summary judgment in part in a dispute over commercial general liability coverage (Peerless Indemnity Insurance Co. v. Shane Colclasure, individually and d/b/a Sunrise Buildings, et al., No. 16-424, D. Colo., 2017 U.S. Dist. LEXIS 22193
Judge: Insurer's Declaratory Judgment Action May Proceed Against Home Builder
FORT MYERS, Fla. - A federal judge in Florida on Feb. 22 denied a motion to dismiss a declaratory judgment action brought by an insurer against a home builder in a construction defects lawsuit, ruling that the case could proceed because the insurer is not a party to the underlying litigation brought by the homeowners against the builder (Mid-Continent Casualty Company v. Van Emmerik Custom Homes Inc., et al., No. 16-819, M.D. Fla.; 2017 U.S. Dist. LEXIS 24279).
Parties Ask 5th Circuit To Determine Whether Duty To Defend Was Owed
NEW ORLEANS - Parties in an insurance dispute recently asked the Fifth Circuit U.S. Courts of Appeals to determine whether a federal district court erred in determining that an insurer owed an additional insured a duty to defend in an underlying construction defects lawsuit (Lyda Swinerton Builders Inc. v. Oklahoma Surety Co., No. 16-20195, 5th Cir.).
Judge Denies Summary Judgment To Insurer Over Defective Stucco Coverage
CHARLESTON, S.C. - Declining to decide substantive issues until discovery is complete, a South Carolina federal judge on Feb. 22 denied summary judgment to an insurer in its declaratory judgment lawsuit over whether coverage exists for an insured's defective stucco applied in a private resort community (Owners Insurance Co. v. Charlotte Plastering Inc., et al., No. 16-02699, D. S.C.; 2017 U.S. Dist. LEXIS 24317).
Panel Finds Insured's Flood Loss Barred, Affirms Judgment Notwithstanding Verdict
DES MOINES, Iowa - Finding that a church's cause of loss was a flood and, consequently, that the loss was excluded under its insurance policy, an Iowa appeals panel on Feb. 8 affirmed a trial judge's granting of an insurer's motion for judgment notwithstanding a $717,000 verdict in favor of the church (Salem United Methodist Church of Cedar Rapids, Iowa v. Church Mutual Insurance Co., No. 16-0170, Iowa App., 2017 Iowa App. LEXIS 122).
9th Circuit: Insurance Policy Bars Damage Caused By 'Subsidence'
SAN FRANCISCO - Claims against a mutually insured subcontractor for damage caused by "subsidence" are excluded under an insurance policy, the Ninth Circuit U.S. Court of Appeals ruled Feb. 14, finding that an insurer had no duty to defend and thus was not responsible to share in costs incurred by a defending insurer (St. Paul Mercury Insurance Co. v. Navigators Specialty Insurance Co., No. 14-56723, 9th Cir., 2017 U.S. App. LEXIS 2586).
Iowa Appeals Panel Upholds Use Of Statutory Interest Rate On Award Against Insurer
DES MOINES, Iowa - An interest award on a judgment determining coverage under an insurance policy for defective workmanship was properly applied under Iowa's statutory rate rather than Minnesota's rate, an Iowa appeals panel affirmed Feb. 22 (Bluescope Buildings North America Inc. v. Cincinnati Insurance Co., No. 16-0503, Iowa App.; 2017 Iowa App. LEXIS 208).
South Carolina High Court Affirms Time-On-The-Risk Allocation Of Insurer's Costs
COLUMBIA, S.C. - The majority of the South Carolina Supreme Court on Jan. 11 affirmed a special referee's finding that coverage under commercial general liability insurance policies was triggered and calculation of an insurer's pro rata portion of the progressive damages based on its time on the risk (Harleysville Group Insurance v. Heritage Communities Inc., et al., No. 2013-001281 & 2013-001291, S.C. Sup., 2017 S.C. LEXIS 8).
Faulty Work Claims Do Not Constitute 'Occurrence' Under Insurance Policy, Judge Says
PHILADELPHIA - Faulty workmanship claims do not constitute "accidents" or "occurrences" under a commercial general liability insurance policy, a Pennsylvania federal judge ruled Jan. 23, finding that an insurer has no duty to defend its insured (Quality Stone Veneer Inc. v. Selective Insurance Company of America, No. 15-6509, E.D. Pa., 2017 U.S. Dist. LEXIS 9393).
Judge Says Subcontractor's Failed Performance Is Not Covered By Insurance Policy
GREAT FALLS, Mont. - A commercial general liability insurer has no duty to defend its insured subcontractor because none of a contractor's alleged damages based on the subcontractor's failed performance constituted "property damage" or was caused by an "occurrence," a Montana federal judge ruled Jan. 18 (The Phoenix Insurance Co. v. Ed Boland Construction Inc., No. 15-71, D. Mont.).
Judge: No Indemnification Owed For Water Damage Caused By Insured
CHICAGO - An insurer has no duty to indemnify an insured and no duty to reimburse an additional insured for alleged water damage to an apartment building because there was no covered "occurrence" for the insured's failure to properly cover the building's roof, an Illinois federal judge ruled Jan. 6 (Brit UW Ltd. v. Tripar Inc. and Davis Russell Real Estate and Management LLC, No. 15-5866, N.D. Ill.; 2017 U.S. Dist. LEXIS 2462).
Judge Says Insurer Has No Duty To Indemnify Settled Construction Defects Suit
EUGENE, Ore. - An insurer has no duty to duty to defend and indemnify a settled underlying construction defects lawsuit because the insured failed to comply with the Contractors Special Conditions in the policy before the underlying complaint was filed, an Oregon federal judge ruled Jan. 2 (Probuilders Specialty Insurance Company RRG v. Phoenix Contracting Inc. and FHC LLC, No. 16-00601, D. Ore.; 2017 U.S. Dist. LEXIS 2440).
Federal Judge Dismisses Insurers' Coverage Suit In Favor Of State Court Case
BALTIMORE - Finding similarities with a declaratory judgment action filed by subcontractors' commercial general liability insurers, a Maryland federal judge on Jan. 20 dismissed a case involving a contractor's insurers over the same duties to defend allegations of excessive radon asserted in two underlying putative class actions (Evanston Insurance Co., et al. v. Dan Ryan Builders Inc., No. 15-3419, D. Md.; 2017 U.S. Dist. LEXIS 8320).
Judge: Insured Vs. Insured Exclusion Bars Directors, Officers Liability Coverage
MIAMI - A Florida federal judge on Jan. 30 found that a directors and officers liability insurance policy's insured vs. insured exclusion precludes coverage for underlying claims against a condominium association insured and one of its board of directors arising from the installation of hurricane impact windows and doors, granting the insurer's motion for judgment on the pleadings (The Marbella Condominium Association, et al. v. RSUI Indemnity Co., No. 16-80987, S.D. Fla., 2017 U.S. Dist. LEXIS 12363).
Insurer Says No Defense Owed For Defective Mattress Class Action Complaint
SAN FRANCISCO - A California federal judge erred in finding that an insurer has a duty to defend its insured against an underlying consumer class action lawsuit alleging that the insured's mattresses were defective because the underlying suit does not allege any claims for bodily injury or property damage, the insurer argues in a Jan, 17 brief filed in the Ninth Circuit U.S. Court of Appeals (Hartford Fire Insurance Co. v. Tempur-Sealy International Inc., et al., No. 16-16056, 9th Cir.).
11th Circuit: Insurer Had Duty To Defend Additional Insured For Stucco Defects
ATLANTA - A subcontractor's insurer had a duty to defend an additional insured contractor in an underlying construction defect case, the 11th Circuit U.S. Court of Appeals affirmed Jan. 17, finding that the alleged defects in the subcontractor's stucco work constituted an "occurrence" (Travelers Property Casualty Company of America v. Amerisure Insurance Company, No. 16-11227, 11th Cir.; 2017 U.S. App. LEXIS 787).
Judge: Insurer's Suit Against Excess Insurer Fails To Allege Coverage Is Exhausted
WEST PALM BEACH, Fla. - A declaratory judgment lawsuit filed by a contractor's insurer against excess insurers over denied additional insured coverage for a construction defects claim fails because the insurer failed to allege that its coverage had been exhausted, a Florida federal judge ruled Jan. 20 (Zurich American Insurance Co. v. Amerisure Insurance Co., et al., No. 16-81393, S.D. Fla.; 2017 U.S. Dist. LEXIS 8366).
11th Circuit: 'Damage To Your Work' Exclusion Bars Duty To Defend Insured
ATLANTA - The "damage to your work" exclusion relieves a commercial general liability insurer from any duty to defend an insured in a construction defects lawsuit, the 11th Circuit U.S. Court of Appeals affirmed Jan. 23, because the allegations relate only to the structure of the property itself, which the insurer and insured agreed is excluded (Auto-Owners Insurance Co. v. Elite Homes Inc., No. 16-10996-AA, 11th Cir.; 2017 U.S. App. LEXIS 1132).
'Damage To Your Work' Exclusion Bars Coverage To Insured, Judge Finds
SOUTH BEND, Ind. - An insurer has no duty to defend or indemnify an insured against claims regarding damage from its glass-cleaning work to homeowners' windows and doors, an Indiana federal judge ruled Jan. 30 because the "damage to your work" exclusion eliminates coverage for claims of damage to the windows and doors and their replacement (The Celina Mutual Insurance Co. v. Daniel L. Gallas, et al., No. 14-1616, N.D. Ind., 2017 U.S. Dist. LEXIS 12166).
'Damage To Your Product' Exclusion Bars Coverage, Arkansas Panel Affirms
LITTLE ROCK, Ark. - An Arkansas appellate panel on Dec. 7 affirmed a lower court's ruling that a commercial general liability insurance policy's "damage to your product" exclusion bars coverage for underlying claims that an insured's flooring products and services were defective (S.E. Arnold and Company, Inc. d/b/a Arnold's Flooring America v. Cincinnati Insurance Co., No. 16-73, Ark. App., Div. 3; 2016 Ark. App. LEXIS 625).
Judge: No Defense Owed For Breach Of Contract Claim Against Insured
GEORGETOWN, Del. - A comprehensive general liability insurer has no duty to defend a contractor against a town's allegations of breach of contract and breach of warranty because the town does not allege that its soils had been damaged by the contractor's defective irrigation system, a Delaware trial judge ruled Jan. 20 (David A. Bramble Inc. v. Old Republic General Insurance Corp., No: S16C-06-025 ESB, Del. Super., Sussex Co.; 2017 Del. Super. LEXIS 34).
Judge: Insured's Breach Of Contract Is Barred By 2- Year Statute Of Limitations
DENVER - An insurance policy's two-year statute of limitations precludes an insured's breach of contract claim regarding denied additional coverage for hailstorm claims, a Colorado federal judge ruled Jan. 13 (The Pinewood Townhome Association Inc. v. Auto-Owners Insurance Co., No. 15-01604, D. Colo.; 2017 U.S. Dist. LEXIS 5456).
Judge Dismisses Breach Of Contract Claim Due To Insurer's Lack Of Coverage Decision
SEATTLE - A Washington federal judge dismissed on Jan. 5 an insured's breach of contract claim against its insurer because the insurer has not granted or denied coverage for a claim for water damage to a condominium complex (Mainhouse Homeowners Association v. Allstate Insurance Co., et al., No. 16-1457, W.D. Wash.; 2017 U.S. Dist. LEXIS 1663).
Insurer Has Duty To Defend Insureds Against Water Damage Suits
CHICAGO - An insurer has a duty to defend its insureds against two underlying lawsuits seeking damages as a result of water damage stemming from a water leak in the insureds' pool because the underlying suits allege an occurrence, an Illinois federal judge said Jan. 24 (Admiral Indemnity Co., et al. v. 899 Plymouth Court Condominium Association, et al., No. 16-5085, N.D. Ill.; 2017 U.S. Dist. LEXIS 9803).
Defense Owed For Damages Caused By Installation Of Masonry, Federal Judge Says
SIOUX CITY, Iowa - An insurer has a duty to defend its insured for water damages caused by the installation of defective masonry by one of the insured's subcontractors because the damages at issue occurred during the applicable policy period and are not excluded by any of the policy exclusions, an Iowa federal judge determined Jan. 12 (Tim Van Der Weide v. Cincinnati Insurance Co., No. 14-4100, N.D. Iowa; 2017 U.S. Dist. LEXIS 4469).
Maryland Federal Judge Finds Issue Of Fact Exists On Additional Living Expenses
BALTIMORE - Because an issue of fact exists regarding whether insureds seeking additional coverage for water and mold damages to their home were fully compensated for additional living expenses, a Maryland federal judge on Jan. 23 denied an insurer's motion for summary judgment as it pertained to the issue of additional living expenses (Richard Kurland, et al. v. ACE American Insurance Co., et al., No. 15-2668, D. Md.; 2017 U.S. Dist. LEXIS 10065).
Judge: Insured Failed To Prove Repair Costs Were Legally Obligated Damages
NORFOLK, Va. - An insured failed to show that its reimbursement claim against its insurer for the costs of repairing a U.S. Navy generator allegedly damaged by a subcontractor's defective workmanship were for costs it was "legally obligated to pay as damages," a Virginia federal judge ruled Jan. 27, dismissing the case (Electric Motor and Contracting Company Inc. v. Travelers Indemnity Company of America, No. 16-310, E.D. Va.; 2017 U.S. Dist. LEXIS 11889).
Insured Met Its Burden Of Proving Collapse Was Fortuitous Event, Judge Says
NEW YORK - A New York federal judge on Jan. 19 granted an insured's motion for summary judgment after determining that the insured met its burden of proving that the collapse of a pier's pile was a fortuitous event as required for coverage to exist under the all-risk policy at issue (Petroterminal De Panama S.A. v. QBE Marine & Specialty Syndicate 1036, et al., No. 14-8614, S.D. N.Y.; 2017 U.S. Dist. LEXIS 7638).
Insurer Says No Coverage For Roofing Subcontractor's $6.6M In Faulty Work Damage
CHICAGO - A commercial general liability insurance policy does not cover a roofing subcontractor over faulty work claims that resulted in more than $6.6 million in damages to townhomes, an insurer says in its Jan. 4 complaint to an Illinois federal court (Nautilus Insurance Co. v. Classic Roofing Inc. and Custom Roofing Contracting Ltd., No. 17-45, N.D. Ill.).
Insured Argues Florida Statute Constitutes 'Suit' Under Policies To Florida Supreme Court
TALLAHASSEE, Fla. - A process under Florida Statutes Chapter 558 is a civil proceeding and, therefore, a "suit" under commercial general liability insurance policies, an insured argues in its Jan. 23 reply brief to the Florida Supreme Court because the Chapter 558 process is a required part of construction defect litigation and is "tied directly to any litigation that follows the process" (Altman Contractors, Inc. v. Crum & Forster Specialty Insurance Co., No. SC16-1420, Fla. Sup.).