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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®



 



Texas High Court Grants Insurer New Trial In Defect Coverage Dispute
AUSTIN, Texas - A judgment in an underlying construction defect lawsuit is not binding on an insurer because its insured builder did not have a sufficient financial stake in the outcome due to a pretrial agreement, the Texas Supreme Court ruled June 16, granting a new trial over whether the insurer must cover the construction defect claims (Great American Insurance Co., et al. v. Glen Hamel, et al., No. 14-1007, Texas Sup., 2017 Tex. LEXIS 553).



Texas Federal Judge Says Counterclaim Not Redundant, Denies Motion To Dismiss
AUSTIN, Texas - A Texas federal judge on June 2 denied a contractor's motion to dismiss an insurer's counterclaim for declaratory relief after determining that the counterclaim is not redundant of the insurer's affirmative defense asserted in its answer to the complaint (Hunt Construction Group Inc. v. Cobb Mechanical Contractors Inc. et al., No. 17-215, W.D. Texas).



9th Circuit Finds Jury Instructions Were Adequate For Dispute Over Coverage
SAN FRANCISCO - A Ninth Circuit U.S. Court of Appeals panel on June 16 overruled arguments from a general contractor that a jury was not properly instructed about certain exclusions included in a policy obtained from ProBuilders Specialty Insurance Co., finding that the contactor was reading the exclusions too narrowly (ProBuilders Specialty Insurance Company, RRG v. Valley Corp. B., et al., No. 14-17544, 9th Cir., 2017 U.S. App. LEXIS 10716).



Judge: Insurer Has Duty To Defend Contractor In Airport Floor Damage Suit
DENVER - A commercial general liability insurer has a duty to defend a contractor against claims of defective work on an airport hangar floor, a Colorado federal judge ruled June 12, also staying the case pending resolution of the underlying action (Auto-Owners Insurance Co. v. High Country Coatings Inc. and Zurich American Insurance Co., No. 16-03196, D. Colo.).



Judge Reserves Ruling On Whether Pipeline Damage Was Covered Under Policy
TACOMA, Wash. - A Washington federal judge on June 22 refused to stay a declaratory relief action and reserved a ruling on summary judgment in a case filed by two insurers against a water district and a company in relation to coverage for damage at a water pipeline project, finding that an analysis on whether the allegations in the underlying coverage case implicated covered property damage would not prejudice the defendants (Travelers Property Casualty Company of America, et al. v. Northwest Pipe Company, et al., No. 17-5098, W.D. Wash., 2017 U.S. Dist. LEXIS 96643).



Judge Enters Judgment For Nautilus Insurance, Finds No Duty To Defend
CHICAGO - An Illinois federal judge on June 1 granted summary judgment and entered a default ruling in favor of an insurer, finding that it had no obligation to indemnify a construction company in an underlying lawsuit because it never received reasonable notice of the case or any claim under the terms of a general liability policy (Nautilus Insurance Co. v. JLL Construction Services, Inc., No. 15-cv-09297, N.D. Ill., 2017 U.S. Dist. LEXIS 83736).



Panel: Prevailing Insurer In Defects Dispute Cannot Recover Attorney Fees
ATLANTA - An insurer who prevailed in a construction defects dispute cannot recover attorney fees because its joint settlement offer with homeowners was invalid and unenforceable, the 11th Circuit U.S. Court of Appeals affirmed June 7 (Joseph Bradfield and Patricia Bradfield v. Mid-Continent Casualty Co., No. 16-17385, 11th Cir., 2017 U.S. App. LEXIS 10094).



Judge Finds Policy Covered Water Vapor Damage, Rejects Insurer's Arguments
BILLINGS, Mont. - A Montana federal judge on June 6 granted summary judgment in favor of a property owner, finding that issues of fact exist as to whether a contractor caused a furnace vent pipe to disconnect, resulting in water damage, but found that the damage was covered under a homeowners insurance policy (Landy C. Leep v. Trinity Universal Insurance Co., No. 16-57, D. Mont., 2017 U.S. Dist. LEXIS 86759).



Judge Grants Insured's Motion To Transfer Venue Of Declaratory Judgment Suit
ATLANTA - A Georgia federal judge on June 29 granted an insured's motion to transfer the venue of an insurer's declaratory judgment lawsuit challenging coverage for an underlying action brought against its insured (Owners Insurance Co. v. Comfort Air Corp., No. 17-1092, N.D. Ga., 2017 U.S. Dist. LEXIS 100874).



Texas Federal Judge Says Insured Failed To Prove Excess Carrier Owes Coverage
HOUSTON - A Texas federal judge on June 1 determined that an excess insurer is not liable to an insured for an underlying construction defects suit because the insured failed to prove that the excess insurer owed coverage under its policy (American Guarantee and Liability Insurance Co., et al. v. United States Fire Insurance Co., No. 15-1926, S.D. Texas, 2017 U.S. Dist. LEXIS 90150).



Insurer Seeks Equitable Contribution For Insured's Defense In 3 Defects Suits
MORRISTOWN, N.J. - An insurer claims in a June 2 complaint filed in New Jersey state court that it is entitled to equitable contribution from another insurer because the other insurer improperly denied coverage to its insured for three construction defects lawsuits filed against the insured (Zurich American Insurance Co., as successor by merger to Assurance Company of America, et al. v. Crum & Forster Specialty Insurance Co., et al., No. L-1233-17, N.J. Super., Morris Co.).



Florida Federal Judge Orders Parties To Submit Stipulation Of Dismissal
MIAMI - A Florida federal judge on June 7 ordered a contractor and an insurer to file a joint stipulation of dismissal pursuant to a mediator's report that the parties settled their claims related to an insured's negligent performance of roofing work (Thornton Construction Co. Inc. v. Scottsdale Insurance Co., No. 16-22001, S.D. Fla., 2017 U.S. Dist. LEXIS 88192).



Judge: Negligence Claim In Defective Workmanship Suit Did Not Trigger Coverage
CONCORD, N.H. - A New Hampshire federal judge on June 6 granted a commercial general liability insurer's motion for summary judgment in a subcontractor insured's lawsuit seeking coverage for underlying claims that it performed surface preparation work negligently, in an unworkmanlike manner and not in accordance with job specifications (Fletch's Sandblasting and Painting, Inc. v. Colony Insurance Co., No. 15-490, D. N.H., 2017 U.S. Dist. LEXIS 86488).



No Coverage Afforded For Home's Foundation Damage, Federal Judge Says
HARTFORD, Conn. - No coverage is afforded for foundation damage to an insured home because no coverage is afforded for collapse or for latent defects under the policy at issue, a Connecticut federal judge said June 26 in granting an insurer's motion for summary judgment (Gueng-Ho Kim, et al. v. State Farm Fire and Casualty Co., No. 15-879, D. Conn., 2017 U.S. Dist. LEXIS 97871).



Judge Refuses To Substitute Insurer As Defendant In UCL, Coverage Case
SAN DIEGO - A California federal judge on June 16 denied a request filed by a group of development companies to substitute an insurer as a defendant in an action seeking coverage in an underlying construction defects case, finding that the substitution would not advance the litigation and refusing to remand the case (Toll CA, L.P., et al. v. American Safety Indemnity Company, et al., No. 16-cv-1523, S.D. Calif., 2017 U.S. Dist. LEXIS 94107).



Panel Says Insurer's Declaratory Judgment Claim Was Moot After Settlement
SEATTLE - A district court erred in allowing an insurer's declaratory judgment claim to proceed after an underlying construction defects suit was settled because the insurer's declaratory judgment claim became moot after the settlement, the Ninth Circuit U.S. Court of Appeals said May 24 in partially reversing the district court's judgment (Century Surety Co., v. Belmont Seattle LLC, No. 14-36002, 9th Cir., 2017 U.S. App. LEXIS 9052).



Florida Federal Judge Denies Motion To Dismiss In Defects Coverage Suit
MIAMI - A Florida federal judge on May 26 denied a motion to dismiss after determining that an insurer's suit seeking a coverage declaration for an underlying suit arising out of its insured's alleged defective roofing work presents an appropriate controversy to be decided by the federal court (Atain Specialty Insurance Co., v. Kenneth Russell Roof Contracting LLC, No. 16-23627, S.D. Fla., 2017 U.S. Dist. LEXIS 81960).



Federal Judge Partially Lifts Stay In Insurers' Declaratory Judgment Suit
GULFPORT, Miss. - A Mississippi federal judge on May 11 agreed to partially lift a stay in a suit filed by insurers seeking a declaration as to whether they have a duty to defend their insureds for an underlying suit filed against the insureds by a subcontractor seeking damages for unjust enrichment (Greenwich Insurance Co., et al. v. Capsco Industries Inc., et al., No. 14-297, S.D. Miss., 2017 U.S. Dist. LEXIS 71928).



Judge Finds Professional Liability Exclusion Applies To Construction Inspector
GREENVILLE, S.C. - A federal judge in South Carolina on May 24 awarded summary judgment to State Farm Fire and Casualty Insurance Co., ruling that the professional liability exclusion does not require the insurer to provide coverage to a construction inspection company accused of negligence (State Farm Fire and Casualty Insurance Co. v. Morningstar Consultants, Inc., No. 16-01685-MGL, D. S.C., 2017 U.S. Dist. LEXIS 79371).



Contractual Liability Exclusion Does Not Bar Coverage For Suit Filed Against Insured
PHOENIX - The Division One Arizona Court of Appeals on May 9 reversed a trial court's ruling that a contractual liability exclusion bars coverage for an underlying suit filed against an insured after determining that the underlying dispute did not arise out of a contractual dispute as required for the exclusion to apply (Dennis Teufel v. American Family Mutual Insurance Co., et al., No. 15-0736, Ariz. App., Div. 1, 2017 Ariz. App. Unpub. LEXIS 558).



Oregon Appeals Court: Multi-Unit Exclusion Doesn't Clear Insurer In Defect Suit
SALEM, Ore. - An Oregon Court of Appeals panel on May 10 reversed a trial court's ruling for an insurer in a condominium association's defects suit, finding that a trial court erred in determining that a multi-unit residential exclusion in the policy applied to combined-use buildings that include residential and business space (Hunters Ridge Condominium Association v. Sherwood Crossing, LLC, et al., No. A157014, Hunters Ridge Condominium Association as Assignee of E.A. White Construction Co., LLC v. Walter George Construction, Inc., et al., No. A157016, Ore. App., 2017 Ore. App. LEXIS 600).



Federal Judge Dismisses Insurer's Counterclaims In Construction Defects Dispute
LAS VEGAS - A Nevada federal judge on May 19 dismissed an insurer's breach of contract and declaratory relief counterclaims after determining that the insurer failed to allege facts in support of its assertion that an additional insured's failure to cooperate with the insurer prejudiced the insurer's ability to defend the additional insured in an underlying construction defects suit (Centex Homes v. Zurich Specialties London Limited, et al., No. 16-1278, D. Nev., 2017 U.S. Dist. LEXIS 77212).



Texas Panel Denies Motions For Rehearing, Upholds Jury's Award For Breach Of Contract
BEAUMONT, Texas - A Texas appeals panel on May 4 denied an insured's and an insurer's motions for rehearing in a coverage dispute arising from a plumbing leak, affirming that a jury correctly entered a $15,000 award for breach of contract damages and reversing 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 (State Farm Llloyds v. Dennis Webb, No. 09-15-00408, Texas App., 9th Dist., 2017 Tex. App. LEXIS 4025).



No Support For Breach Of Contract Tied To Payment Of Reinsurance Deductible
NEW YORK - In support of a breach of contract claim in an insurance coverage dispute over flood damage at a construction site, construction companies failed to show that their insurer's settlement caused them to pay a $50,000 deductible under a captive reinsurance agreement, a New York federal judge ruled May 4, dismissing the complaint (Keller Foundations LLC, et al. v. Zurich American Insurance Co., No. 16-6751, S.D. N.Y., 2017 U.S. Dist. LEXIS 68902).



Federal Judge Refuses To Compel Insurer To Produce Discovery In Coverage Dispute
WILLIAMSPORT, Pa. - A Pennsylvania federal judge on May 12 denied a modular home builder insured's motions to compel discovery and for sanctions in a commercial general liability insurer's declaratory judgment action disputing coverage for underlying faulty workmanship claims against the insured (Westfield Insurance Co. v. Icon Legacy Custom Modular Homes and Icon Legacy, No. 15-00539, M.D. Pa., 2017 U.S. Dist. LEXIS 72624).



Coverage Barred For Construction Defects Claims, Insurer Says In Complaint
TAMPA, Fla. - No coverage is owed for an underlying suit seeking damages as a result of water intrusion and other construction defects because coverage is barred for the underlying claims by exclusions for mold, pollution and impaired property, an insurer claims in a May 24 complaint filed against its insured in Florida federal court (Mid-Continent Casualty Co. v. Mobley Homes Florida LLC, No. 17-1232, M.D. Fla.).



Connecticut Federal Judge Says Questions Of Fact Exist In Water, Ice Damage Suit
BRIDGEPORT, Conn. - A Connecticut federal judge on May 17 partially denied an insurer's motion for summary judgment after determining that questions of fact remain regarding whether damage to a freezer floor is barred by the policy's earth movement exclusion (Thurston Foods Inc. v. Wausau Business Insurance Co., No. 15-14, D. Conn., 2017 U.S. Dist. LEXIS 74935).



Federal Judge Denies Motions To Reconsider In Construction Defects Suit
TACOMA, Wash. - A Washington federal judge on May 9 denied motions for reconsideration filed by insurers involved in a construction defects coverage suit after determining that the insurers failed to raise any issues that warrant reconsideration (Eagle Harbour Condominium Association v. Allstate Insurance Co., et al., No. 15-5312, W.D. Wash., 2017 U.S. Dist. LEXIS 70793).



Federal Magistrate Judge Recommends Default Judgment Be Entered Against Insured
SAN JOSE, Calif. - A California federal magistrate judge on May 3 recommended that a default judgment be entered against an insured because the insured failed to response to its insurers' complaint seeking a declaration that no coverage is owed for an underlying construction defects suit and because no coverage exists for the underlying suit based on the insured's misrepresentation in a policy application (Associated Industries Insurance Co. Inc., et al. v. Detail Construction & Waterproofing, Inc., No. 16-6042, N.D. Calif., 2017 U.S. Dist. LEXIS 67722).



Pennsylvania Federal Judge: Issue Of Fact Remains As To Cause Of Fire In Townhome
PHILADELPHIA - A Pennsylvania federal judge on May 18 denied a contractor's motion for summary judgment after determining that an insurer's proposed expert testimony on the causation of a fire presents a genuine dispute of material fact as to whether one of the contractors who worked in the home's basement contributed to the cause of the fire (State Farm Fire & Casualty Co., as subrogee of the Estate of Alkis J. Marland v. Hartman Contractors, et al., No. 14-6535, E.D. Pa., 2017 U.S. Dist. LEXIS 75967).



Florida Appeals Panel Finds Insurer's Subrogation Suit Is Not Time-Barred
MIAMI - The Third District Florida Court of Appeal on May 10 reversed a trial court's dismissal of an insurer's complaint after determining that the trial court erred in finding that the complaint was time-barred because the insurer filed the suit within four years of the actual date of loss (Companion Property and Casualty Group v. Built Tops Building Services Inc., No. 3D16-2044, Fla. App., 3rd Dist., 2017 Fla. App. LEXIS 6584).



No Jurisdiction Under CAFA's 'Mass Action' Provision, Judge Rules In Remanding
RIVERSIDE, Calif. - A California federal judge on May 3 granted insurers' motion to remand a lawsuit arising from claims over defective water supply lines, finding that the 26 insurers, acting as subrogees of 145 insureds, are the only plaintiffs and therefore fail to satisfy the "mass action" provision under the Class Action Fairness Act (CAFA) to retain jurisdiction (Liberty Mutual Fire Insurance Co. v. EZ-Flo International Inc., No. 17-228, C.D. Calif., 2017 U.S. Dist. LEXIS 67761).



Excess Insurer Appeals Ruling In Suit Over $6.7M Construction Defects Settlement
DENVER - An excess insurer has asked the 10th Circuit U.S. Court of Appeals to reverse a lower federal court's ruling in favor of a primary commercial general liability insurer in a dispute over coverage for an underlying $6.7 million settlement over construction defects claims against a ski area developer insured (Federal Insurance Co. v. National Union, No. 16-1438, 10th Cir.).



Insured: Insurer Is Liable Under 'Collapse' Provisions For Hidden Decay Damages
SEATTLE - An insured has asked the Ninth Circuit U.S. Court of Appeals to reverse a lower federal court's ruling that an insurer is not liable for damage to apartments from hidden decay under its policies' "collapse" provisions (American Economy Insurance Co. v. CHL, LLC, No. 16-35606, 9th Cir.).



Idaho High Court: Faulty Work Exclusion Does Not Apply To Insured's Loss
BOISE, Idaho - The faulty, inadequate or defective work exclusion does not apply to an insured's loss of her house caused when a renter, who had an option to purchase the house, demolished it, the Idaho Supreme Court ruled April 28, because the renter's intention to build a home was not the dwelling listed under the policy (Shammie L. Fisher v. Garrison Property and Casualty Insurance Co., No. 44117-2016, Idaho Sup., 2017 Ida. LEXIS 111).



Wisconsin Majority: Appeal Of Misrepresentation Dispute 'Improvidently Granted'
MADISON, Wis. - A majority of the Wisconsin Supreme Court on April 27 dismissed as "improvidently granted" a review of an appeals court's finding that a business owner's liability insurer had no duty to defend an allegation of misrepresentation against its contractor insured (Maya Elaine Smith v. Jeff Anderson, d/b/a Anderson Real Estate Services v. 4th Dimension Design, Inc., No. 2015AP79, Wis. Sup., 2017 Wisc. LEXIS 234).



Washington High Court Majority Says Coverage Owed For Negligent Installation
SEATTLE - The majority of the Washington Supreme Court on April 27 determined that an insurer has a duty to defend underlying claims arising out of carbon monoxide poisoning because the efficient proximate cause of the loss was the negligent installation of a hot water heater, which is a covered occurrence under the policy (Zhaoyun Xia, et al. v. ProBuilders Specialty Insurance Co., et al., No. 92436-8, Wash. Sup., 2017 Wash. LEXIS 443).



11th Circuit: Insurer Owes No Defense, Indemnity For Negligent Home Inspection
ATLANTA - A commercial general liability insurer had no duty to defend or indemnify a home inspector against allegations that an insufficient inspection failed to discover defective conditions prior to a home sale, the 11th Circuit U.S. Court of Appeals affirmed April 17, finding that the inspector's negligence did not cause any covered "property damage" (Auto-Owners Insurance Co. v. Ralph Gage Contracting Inc., et al., No. 16-15442, 11th Cir., 2017 U.S. App. LEXIS 6528).



3rd Circuit: Insurers Have No Duty To Defend, Indemnify Faulty Workmanship Claims
PHILADELPHIA - Commercial general liability insurers have no duty to defend or indemnify an insured in a shoddy workmanship lawsuit filed by the former owner of an apartment complex, the Third Circuit U.S. Court of Appeals ruled April 11, affirming summary judgment for the insurers (Mega Construction Corp. v. XL America Group, et al. v. Travelers Casualty Insurance Company of America v. Ohio Casualty, No. 16-2639, 3rd Cir., 2017 U.S. App. LEXIS 6210).



9th Circuit Says Damage Is Not Continuation Of Assignee's Original Damage
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on April 20 determined that a district court erred in granting summary judgment in favor of two insurers because it was reasonable for the assignees of the insured to assume that the damage sustained as the result of an insured's negligent repair is not a continuation of the assignee's original damage (Adrianus Alkemade and Rachelle Alkemade v. Quanta Indemnity Co. and General Fidelity Insurance Co., No. 14-35605, 9th Cir., 2017 U.S. App. LEXIS 6896).



4th Circuit: Insured's Faulty Design Of Student Housing Foundation Is Covered
RICHMOND, Va. - A professional liability insurance policy provided coverage for a general contractor's liability for defective design of a building's foundation, which resulted in the contractor becoming responsible to pay $1.77 million as part of the costs to repair, the Fourth Circuit U.S. Court of Appeals held April 4, affirming summary judgment on an insured's breach of contract counterclaim (Westchester Surplus Lines Insurance Co. v. Clancy & Theys Construction Co., Nos. 15-2299 & 15-2373, 4th Cir., 2017 U.S. App. LEXIS 5796).



Insurer Estopped From Use Of Subcontractors Exception Based On Improper Info
PHOENIX - An insurer is estopped from asserting a coverage defense to a homeowner's breach of contract and bad faith lawsuit based on the subcontractors exclusion because the information relevant to that defense was improperly disclosed by an insured contractor's counsel, a visiting Alaska federal judge to the Arizona federal court ruled April 10 (Karen Cosgrove v. National Fire & Marine Insurance Co., No. 14-2229, D. Ariz., 2017 U.S. Dist. LEXIS 54479).



N.J. Appellate Panel: 2 Cases Over Condo Defects Must Be Dismissed
TRENTON, N.J. - A New Jersey Superior Court Appellate Division panel on April 28 ruled that two cases against an insurance company over alleged defects in a condominium complex - one by the insured, the construction company, and one by the condominium association - are barred by preclusion doctrines (AJD Construction Company, Inc. v. Crum and Forster Specialty Insurance Company, Port Liberte II Condominium Association, Inc. v. Crum and Forster Specialty Insurance Company, No. A-5269-15T3, N.J. Super., App. Div., 2017 N.J. Super. Unpub. LEXIS 1034).



Pennsylvania Panel Reverses Judgment Against Insurer In Raw Sewage Coverage Suit
HARRISBURG, Pa.- A Pennsylvania appeals panel on May 1 found that a trial judge erred by reading into the denial of an insurer's motion for summary judgment a legal conclusion that was neither articulated by the ruling judge nor necessary to the denial, reversing and remanding a judgment against the insurer to determine whether a water-damage exclusion barred coverage for insureds' raw sewage claim (Howard Windows Jr. and Eleanor Windows v. Erie Insurance Exchange, No. 362 WDA 2016, Pa. Super., 2017 Pa. Super. LEXIS 309).



Insurer Did Not Impermissibly Depreciate Labor Costs, 10th Circuit Affirms
DENVER - The 10th Circuit U.S. Court of Appeals on April 21 affirmed a lower federal court's finding that a homeowners insurer did not violate its policy when it depreciated labor costs in determining the actual cash value of an insured's loss following hail and water damage (Margaret Graves v. American Family Mutual Insurance Co., No. 15-3187, 10th Cir., 2017 U.S. App. LEXIS 6980).



Judge: Fact Issues Remain On If Covered Peril Caused Insured's Continuous Damage
TACOMA, Wash. - Questions of fact exist on whether a covered peril caused continuous damage to a condominium association's common areas and buildings under several "all-risk" insurance policies, a Washington federal judge ruled April 10, denying summary judgment to the association and insurers (Eagle Harbour Condominium Association v. Allstate Insurance Co., et al., No. 15-5312, W.D. Wash., 2017 U.S. Dist. LEXIS 54761).



Insurer Met Burden Of Proving That No Coverage Is Owed For Negligent Roofing Work
NASHVILLE, Tenn. - A Tennessee federal judge on April 26 granted an insurer's motion for summary judgment after determining that an insurer met its burden of proving that no coverage is afforded for underlying claims arising out of an insured's alleged negligent roofing work (Mount Vernon Fire Insurance Co. v. Liem Construction Inc., et al., No. 16-689, M.D. Tenn., 2017 U.S. Dist. LEXIS 63224).



Federal Judge Stays Defects Coverage Suit Until Underlying Suits Are Resolved
SAN FRANCISCO - A California federal judge on April 26 denied an insurer's motion for summary judgment and stayed the insurer's suit until two underlying suits alleging claims related to the insured's alleged negligent workmanship are resolved because there are multiple issues of material dispute that need to be resolved before a coverage decision can be made (Tokio Marine Specialty Insurance Co. v. Thompson Brooks Inc., et al., No. 17-514, N.D. Calif., 2017 U.S. Dist. LEXIS 63542).



Judge Remands Caulking Company's Request For Coverage Suit Sua Sponte
MIAMI - A federal judge in Florida on April 20 remanded sua sponte a lawsuit brought by a caulking company seeking declaratory judgment from two of its insurers for indemnification and duty to defend, finding that the amount in controversy does not exceed the $75,000 jurisdictional threshold (General Caulking & Coatings Co. v. American Home Assurance Company, et al., No. 16-cv-23662-UU, S.D. Fla., 2017 U.S. Dist. 61163).



Removal Of Construction Defects Suit Not Proper, California Federal Judge Says
LOS ANGELES - A California federal judge on April 21 granted an insurer's motion to remand after determining that removal was improper because complete diversity of citizenship may not exist as there is a possibility that several defendants in the construction defects suit, originally filed in California state court, are citizens of California (Ironshore Specialty Insurance Co. v. Maison Reeves Homeowners Association, et al., No. 17-1704, C.D. Calif., 2017 U.S. Dist. LEXIS 61241).



Fact Issues Exist On When Damage Manifested Under Insurance Policies, Judge Says
TRENTON, N.J. - Factual issues remain on whether damage caused by a window subcontractor manifested before or after an insurer's policy periods, a New Jersey federal judge ruled April 12, denying summary judgment to two insurers in a contribution lawsuit over defense costs incurred by the one insurer in a construction defects case (American Fire and Casualty Co. v. Crum & Forster Specialty Insurance Co., No. 14-04696, D. N.J., 2017 U.S. Dist. LEXIS 56450).



Judge: Fact Issues Exist On If Independent Counsel Is Required For Insured's Defense
CHICAGO - In an insured's breach of contract and bad faith lawsuit against its commercial general liability insurer, an Illinois federal judge ruled April 11 that the parties failed to provide evidence to clear up genuine issues of material fact regarding whether independent counsel should be appointed for an insured in an underlying construction defects case (DePasquale Steel Erectors Inc. v. Gemini Insurance Co., No. 16-10892, N.D. Ill., 2017 U.S. Dist. LEXIS 54917).



Judge Rules On Insurers' Late Notice, Suits Limitations Defense In Coverage Dispute
TACOMA, Wash. - In a coverage dispute between a condominium association and several "all-risk" insurers, a Washington federal judge on April 12 granted in part and denied in part summary judgment on two insurers' late notice defense but granted summary judgment entirely on their suit limitations defense (Eagle Harbour Condominium Association v. Allstate Insurance Co., et al., No. 15-5312, W.D. Wash., 2017 U.S. Dist. LEXIS 56292).



8th Circuit Finds Settlement Agreement For Defect Claims Violated Cooperation Clause
ST. LOUIS - A settlement agreement between an association and an insured general contractor over allegations of defective construction violated an insurance policy's cooperation clause and, thus, is unenforceable, the Eighth Circuit U.S. Court of Appeals affirmed April 17 (James River Insurance Co. v. The Interlachen Propertyowners Association and Kuepers Construction Inc., No. 16-2994, 8th Cir.).



Judge Allows Testimony On Cause Of Damages In Bad Faith Suit Against Insurer
CHARLESTON, S.C. - An additional insured may offer layman testimony about the cause of damages or cost of repairs at a condominium association for purposes of its bad faith lawsuit against an insurer, a South Carolina federal judge ruled April 6 (UFP Eastern Division Inc. f/k/a Universal Forest Products Eastern Division Inc. v. Selective Insurance Company of South Carolina, No. 15-2801, D. S.C., 2017 U.S. Dist. LEXIS 53190).



Ohio Federal Judge: Insurer Failed To Show Good Cause Exists For Protective Order
CINCINNATI - An Ohio federal judge on April 11 denied an insurer's motion for a protective order regarding a number of documents and communications sought by an insured seeking coverage for underlying asbestos claims after determining that the insurer failed to meet its burden of establishing that there is good cause for a protective order (The William Powell Co. v. National Indemnity Co., et al., No. 14-807, S.D. Ohio, 2017 U.S. Dist. LEXIS 55148).



What's Loss Got To Do With It? Courts And Commentators' Differing Applications Of CG 20 10 Additional Insured Endorsements
By Howard K. Glick and Daniel S. Weber Along with indemnity agreements, contractors and owners use additional insured endorsements as a primary means of protection from third-party liability that arises out of work performed under the contract. One of the most commonly used form additional insured endorsements, the Insurance Services Office, Inc. ("ISO")1 CG 20 10 Automatic Additional Insured Endorsement, underwent significant revisions in 2004. Despite the CG 20 10 endorsement being revised over a decade ago, the exact scope of coverage afforded under this form endorsement remains unclear as courts and commentators appear to differ on the proper interpretation of the pertinent language. Prior to 2004, ISO CG 20 10 endorsements provided additional insured coverage for losses "arising out of" the named insured's work performed for the ostensive additional insured. Because of the broad interpretation by courts nationwide of "arising out of" language, there was no requirement that the acts or omissions of the named insured play any role in the loss.2 In 2004, ISO sought to narrow the scope of coverage afforded to additional insureds by placing significance on the named insured's acts or omissions. Indeed, it is generally understood that "[t]he 2004 ISO revisions sought to narrow the coverage afforded an additional insured by injecting fault into the analysis []" whereas under the pre-2004 ISO revisions, "the mere fact that an employee is working on the job site at the time of the injury would likely be enough to trigger the additional insured coverage." 3