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®
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.).
South Dakota High Court: Fact Issues Exist On Insurer's 'Your Work' Exclusion
PIERRE, S.D. - Genuine issues of material fact remain to preclude summary judgment on the application of "your work" and "professional services" exclusions in a dispute between an insurer and its insured over coverage for damage to grain bins, the South Dakota Supreme Court held Nov. 30, reversing and remanding an entry of summary judgment to the insurer (Western National Mutual Insurance Co. v. Gateway Building Systems Inc. and Dakota Mill & Grain Inc., Nos. 27841 & 27842, S.D. Sup.; 2016 S.D. LEXIS 148).
'Your Work' Exclusion Bars Additional Insured's Faulty Work Claim, Panel Rules
PHOENIX - Coverage was unavailable to a general contractor as an additional insured for the cost of replacing a subcontractor's faulty work under an insurance policy's "your work" exclusion, and the "subcontractor exception" to that exclusion does not apply, an Arizona appeals panel held Dec. 30, reversing and remanding for entry of summary judgment in favor of the insurer (Double AA Builders Ltd. v. Preferred Contractors Insurance Company LLC, No. 1 CA-CV 15-0375, Ariz. App., Div. 1; 2016 Ariz. App. LEXIS 294).
Oregon High Court Upholds Insurer's Duty To Defend Defects Case On Four-Corners Rule
SALEM, Ore. - Applying the four-corners rule to an insurer's duty to defend an additional insured general contractor, the Oregon Supreme Court on Dec. 8 affirmed that the insurer owes a defense under a liability insurance policy for defects in a townhome development (West Hills Development Co. v. Chartis Claims, Inc., et al., No. S063823, Ore. Sup.; 2016 Ore. LEXIS 755).
Contract Claims Are Not Covered Under Insurance Policy, Federal Judge Says
HONOLULU - Claims based in contract do not constitute an "occurrence" under a commercial general liability insurance policy, a Hawaii federal judge ruled Dec. 16, dismissing counterclaims for breach of contract and reformation against two insurers in a coverage dispute over defects in a construction project (American Automobile Insurance Co. and National Surety Corp. v. Hawaii Nut & Bolt Inc. and Safeway Inc., No. 15-00245, D. Hawaii; 2016 U.S. Dist. LEXIS 174243).
Faulty Work Exclusion Bars Insured's Claim For Scratched Windows, Federal Judge Says
BALTIMORE - An insurance policy's faulty workmanship exclusion applies to preclude coverage for an insured's claim for replacing scratched windows, a Maryland federal judge ruled Dec. 20, finding that the ensuing loss provision does not reach the claimed damage (James McHugh Construction Co. v. Travelers Property Casualty Company of America, No. 16-1099, D. Md.; 2016 U.S. Dist. LEXIS 176112).
Insurer's Policy Bars Flood Damage, Judge Says; Breach Of Contract Claim Fails
COLUMBIA, S.C. - An insurer's policy excludes coverage for flood damage to the insureds' home, a South Carolina federal judge ruled Dec. 29, granting the insurer's motion for judgment on the pleadings as to claims for breach of contract, breach of contract with fraudulent intent and bad faith refusal to pay (Stephen F. Morris and Martha Morris v. Auto-Owners Insurance Co., No. 16-00880, D. S.C.; 2016 U.S. Dist. LEXIS 179715).
Panel Finds Limitations Period Precludes Insured's Breach Of Contract Claim
SAN FRANCISCO - A policy's 12-month limitations period bars an insured's breach of contract claim regarding its insurer's denial of coverage for scratches on glass windows at a condominium development project, the Ninth Circuit U.S. Court of Appeals affirmed Dec. 21 (Queensridge Towers LLC v. Allianz Global Risks US Insurance Co., No. 15-15128, 9th Cir.; 2016 U.S. App. LEXIS 22927).
Judge: Fact Issues Exist On Insurer's Failure To Supplement Payment For Repair Costs
PORTLAND, Ore. - An issue of material fact exists as to whether an insurer's alleged failure to supplement an actual cash value (ACV) payment prevented homeowners from contracting for repairs to fix water damage, an Oregon federal judge ruled Dec. 20 (Kenneth and Sarah Matchniff v. Great Northwest Insurance Co., No. 15-00193, D. Ore.; 2016 U.S. Dist. LEXIS 177136).
Actual Cost Value Applies To Insured's Loss From Damage To Dock, Magistrate Judge Says
TACOMA, Wash. - An insured's dock is not a "building" as that term is used in an insurance policy and, thus, coverage for only actual cost value (ACV) applies, a Washington federal magistrate judge ruled Nov. 30, also finding that the insured failed to show that the insurer improperly calculated ACV (Douglas and Tammy Herzog v. Property and Casualty Insurance Company of Hartford, No. 16-05083, W.D. Wash.; 2016 U.S. Dist. LEXIS 166177).
Court Erred In Rejecting Concurring Cause Doctrine, Majority Says, Quashes Order
TALLAHASSEE, Fla. - A majority of the Florida Supreme Court on Dec. 1 held that an appeals court erred in reversing an $8 million judgment against a homeowners insurer in a coverage dispute over alleged property damage caused by construction defects, rain and wind, quashing the lower court's opinion and remanding to apply the concurring cause doctrine (John Robert Sebo v. American Home Assurance Co. Inc., No. 14-897, Fla. Sup.; 2016 Fla. LEXIS 2596).
Anti-Subrogation Rule Bars Contribution Claim In Insurance Suit, Judge Says
PORTLAND, Ore. - Because a contractor is an insured under a builder's risk policy, the anti-subrogation rule applies, which prohibits an insurer from seeking subrogation from its own insured, an Oregon federal judge ruled Dec. 12, granting summary judgment to the contractor on third-party claims in an insurance dispute over reimbursement for construction defects in a project (Factory Mutual Insurance Co. v. PERI Formworks Systems Inc. v. McClone Construction Co., No. 16-264, D. Ore.; 2016 U.S. Dist. LEXIS 171357).
Federal Judge Strikes Insurer's Counterclaim Over Coverage For Defects Suits As Redundant
FRESNO, Calif. - A California federal judge on Nov. 29 struck an insurer's counterclaim as being redundant of another insurer's declaratory judgment claim seeking to resolve a dispute over primary coverage for an insured in construction defect cases (Houston Casualty Co. v. Charter Oak Fire Insurance Co., et al., No. 16-535, E.D. Calif.; 2016 U.S. Dist. LEXIS 164622).
Florida Panel Reverses Ruling In Insurer's Favor In Sinkhole Coverage Dispute
DAYTONA BEACH, Fla. - A Florida appeals panel on Dec. 9 held that a lower court erred in granting summary judgment in favor of a homeowners insurer on the insureds' bad faith lawsuit arising from a sinkhole coverage dispute, reversing and remanding (Sandra Barton And Gregory Barton v. Capitol Preferred Insurance Co. Inc., No. 5D15-1587, Fla. App., 5th Dist.; 2016 Fla. App. LEXIS 18168).
Court Properly Disregarded Portions Of Expert Witness' Affidavit, 9th Circuit Says
PORTLAND, Ore. - The Ninth Circuit U.S. Court of Appeals on Dec. 5 held that a lower federal court did not err in disregarding the heat-related portions of an affidavit from an expert witness in a dispute over coverage for a building collapse (Tarleton LLC v. State Farm Fire and Casualty Co., No. 14-35540, 9th Cir.; 2016 U.S. App. LEXIS 21636).
Judge Finds No Additional Coverage For Insured's Damage From Rainstorm
BATON ROUGE, La. - There is no additional coverage, beyond the $10,000 that has already been paid to an insured, for alleged damage following a rainstorm, a Louisiana federal judge held Dec. 20, also finding that an insurance agent was not an agent of the insurer and therefore had no power to bind the insurer to pay for the repairs (Bible World Christian Center v. Colony Insurance Co., No. 15-397, M.D. La.; 2016 U.S. Dist. LEXIS 175766).
Judge: Fees Awarded Under Texas Civil Practice, Remedies Section Are Not Covered
HOUSTON - Fees awarded under Section 82.002(g) of the Texas Civil Practice and Remedies Code are not "damages" covered by a commercial general liability insurance policy, a Texas federal judge ruled Dec. 30, finding that the ruling in Hollybrook Cottonseed Processing, L.L.C. v. Am. Guarantee & Liab. Ins. Co. (772 F.3d 1031 [5th Cir. 2014]) does not affect that conclusion (Mid-Continent Casualty Co. v. Petroleum Solutions, Inc., et al., No. 09-0422, S.D. Texas; 2016 U.S. Dist. LEXIS 180539).
'Earth Movement' Exclusion Bars Insured's Claim For Repairs, Judge Concludes
KNOXVILLE, Tenn. - An "earth movement" exclusion precludes insurance coverage for an insured's repairs to damages from water loss to one of its pools caused by "landsliding" and "sinking," a Tennessee federal judge ruled Nov. 22, dismissing the insured's breach of contract and bad faith claims against its insurer (Ski Chalet Village Owners Club Inc. v. Employers Mutual Casualty Co., No. 16-20, E.D. Tenn.; 2016 U.S. Dist. LEXIS 161563).
Insured's Faulty Work Is Not An 'Occurrence' Under New York Law, Judge Says
TOPEKA, Kan. - Applying New York law to an insurance contract, a Kansas federal judge on Nov. 17 ruled that claims for alleged property damage as a result of an insured's faulty construction are not covered as "occurrences" (Black & Veatch Corp. v. Aspen Insurance [UK] Ltd., et al., No. 12-2350, D. Kan.; 2016 U.S. Dist. LEXIS 159679).
Judge: Fraud Claim Against Insured Is Not An 'Occurrence' Due To Intentional Conduct
LITTLE ROCK, Ark. - Property owners' fraud claim is not a covered "occurrence" under a commercial general liability insurance policy because they allege intentional intent by an insured contractor, an Arkansas federal judge ruled Nov. 18, also upholding a previous decision that the insurer had a duty to defend a breach of contract claim (Columbia Insurance Group Inc. and Columbia Mutual Insurance Company Inc. v. Arkansas Infrastructure Inc., et al., No. 14-00512, E.D. Ark.; 2016 U.S. Dist. LEXIS 160151).
Insurer Owes Defense Costs For Covered Faulty Work, Iowa Federal Judge Holds
DES MOINES, Iowa - Under Iowa law, claims against an insured for defective workmanship that resulted in water damage to property other than the insured's work constitute an "occurrence" under comprehensive general liability policies, an Iowa federal judge ruled Nov. 1, finding that the insurer is responsible for most of the defense costs in underlying product liability lawsuits (Pella Corp., et al. v. Liberty Mutual Insurance Co., No. 11-00273, S.D. Iowa).
Pennsylvania Federal Judge: Underlying Suit Does Not Allege An Occurrence
PHILADELPHIA - No coverage is owed to insureds for an underlying negligence suit because the underlying suit arose out of faulty workmanship and not an occurrence, a Pennsylvania federal judge said Nov. 16 in granting an insurer's motion for summary judgment (Robert A. Bealer, et al. v. Nationwide Mutual Insurance Co., et al., No. 16-3181, E.D. Pa.; 2016 U.S. Dist. LEXIS 158438).
Damages From Insured's Faulty Work Are Not Covered, Arkansas Federal Judge Says
LITTLE ROCK, Ark. - Damages for defective workmanship that resulted in damages only to an insured general contractor's work product itself does not constitute property damage caused by an "occurrence" under a commercial general liability insurance policy, an Arkansas federal judge ruled Nov. 18, granting summary judgment to the insurer on its duty to defend and indemnify two underlying construction defects cases (Auto-Owners Insurance Co. v. Hambuchen Construction Inc., et al., No. 16-0005, E.D. Ark.; 2016 U.S. Dist. LEXIS 160364).
Judge: Insureds' Negligence Claim From Collapse Is Not Precluded By Contract
TULSA, Okla. - Insureds' negligence claim arising out of damages from a wall collapse are not barred because even if there is a contractual relationship between the insureds and a contractor, the insureds did not assume risk of loss for the collapse of a wall due to the wall's allegedly negligent construction, an Oklahoma federal judge ruled Nov. 2 (Lexington Insurance Co., et al. v. Newbern Fabricating Inc. and Baucom Concrete Construction Inc. v. Doveland Engineering Co. and Baucom Concrete Construction Inc. v. Commercial Metals Co., No. 14-0610, N.D. Okla.; 2016 U.S. Dist. LEXIS 151857).
Panel: Surety Did Not Act In Bad Faith In Settling Work Contract Dispute
CINCINNATI - A surety's settlement of breach of contract claims against the state of Michigan for refusal to make final payments to a general contractor for work to a prison kitchen was not in bad faith because the surety and the contractor had shared interests, the Sixth Circuit U.S. Court of Appeals ruled Nov. 7 (Great American Insurance Co. v. E.L. Bailey & Company Inc. and Edward L. Bailey, No. 15-2149, 6th Cir.; 2016 U.S. App. LEXIS 20018).
No Coverage For Foundation Damage Caused By Plumbing Leaks, Federal Judge Says
DALLAS - No coverage is afforded to insureds for foundation damage caused by plumbing leaks in their home because the policy specifically excludes coverage for foundation or earth movement and the policy's limited water damage endorsement does not extend coverage for foundation movement, a Texas federal judge said Nov. 2 (John F. Thomas, et al. v. State Farm Lloyds, et al., No. 15-1937, N.D. Texas; 2016 U.S. Dist. LEXIS 152318).
Insureds' Liability Must Be Resolved Before Coverage Issues, New Jersey Panel Says
TRENTON, N.J. - Insurers' coverage obligations in a mold damages suit can be adjudicated only after the insureds' liability for the damages caused by the mold contamination is resolved, the Appellate Division of the New Jersey Superior Court determined Nov. 21 (Larry Chenault v. Victory Highlands Condominium Association Inc., et al., Nos. A-3626-14T4, A-3627-14T4, A-3628-14T4, N.J. Super., App. Div.; 2016 N.J. Super. Unpub. LEXIS 2500).
Florida Federal Judge Says No Evidence That EIFS Was Defectively Installed
ORLANDO, Fla. - Because there is no evidence that an insured's exterior insulation finishing system (EIFS) was defectively installed, a Florida federal judge on Nov. 18 denied an insurer's motion for summary judgment in a suit filed by an insured seeking coverage for water and mold damages to the insured's home (George Crews, et al. v. Federal Insurance Co., No. 15-866, M.D. Fla.; 2016 U.S. Dist. LEXIS 160200).
Judge Finds Appraisal Clause Binds Insured From Litigating Dispute Over Money
CHICAGO - An appraisal clause's use of the word, "binding" made clear to an insured that by participating in the appraisal process, it foreclosed its opportunity to litigate the amount an insurer owed it for damage to a building covered by the insurance policy, an Illinois federal judge ruled Nov. 7, dismissing a breach of contract claim (70th Court Condo Association v. Ohio Security Insurance Co. and Donan Engineering Co. Inc., No. 16-07723, N.D. Ill.; 2016 U.S. Dist. LEXIS 153959).
Insurer Must Pay Portion Of Award For Taxable Costs In Defects Dispute, Panel Says
DENVER - Having defended a developer in arbitration proceedings related to construction defects claims, a commercial general liability insurer is obligated to pay its portion of an award for taxable costs issued against the developer and a contractor, a Colorado appeals panel ruled Nov. 3, affirming partial summary judgment to the contractor (Mt. Hawley Insurance Co. v. Casson Duncan Construction Inc., No. 2016COA164, Colo. App.; 2016 Colo. App. LEXIS 1545).
Judge Awards Surety Default Judgment Of $305,067 For Breach Of Contract Claim
LOS ANGELES - A surety is entitled to a default judgment of $305,067.65 in damages against a subcontractor for breach of contract and implied contractual indemnity claims stemming from defective work on a media arts center construction project, a California federal judge ruled Oct. 31 (Hartford Fire Insurance Co. v. Oceans-One Interior Drywall Inc., No. 16-945, C.D. Calif.; 2016 U.S. Dist. LEXIS 151509).
Claims Arising Out Of Cracked Basement Walls Will Proceed To Trial, Federal Judge Says
BRIDGEPORT, Conn. - A Connecticut federal judge on Nov. 3 denied an insurer's motion for reconsideration after determining that the insurer failed to identify any controlling decisions that were overlooked when the court determined that insureds' claims arising out of cracks discovered in their home's basement walls must proceed to trial (Stephen Belz and Karla Belz v. Peerless Insurance Co., No. 13-01315, D. Conn.; 2016 U.S. Dist. LEXIS 152493).
Insured Claims Carrier Wrongfully Denied Coverage For Roof's Collapse
CHICAGO - An insured seeking coverage for the collapse of its roof following a snowstorm alleges in a Nov. 3 complaint filed in Illinois federal court that its insurer breached its contract and acted in bad faith by denying coverage based on the policy's imminent collapse exclusion (Ravinia Vogue Cleaners v. Travelers Casualty Insurance Company of America, No. 16-10311, N.D. Ill.).
Magistrate Judge Recommends Attorney Fees To Insured In Defects Coverage Dispute
MIAMI - An insured is entitled to $803,422.50 in attorney fees from its insurer for successfully litigating a coverage dispute regarding defective work claims, a Florida federal magistrate judge recommended Nov. 14 (Pavarini Construction Co. [SE] Inc., individually and for the use and benefit of Steadfast Insurance Co. v. ACE American Insurance Co., No. 14-20524, S.D. Fla.; 2016 U.S. Dist. LEXIS 157958).
Insurer, Contractor Argue In Oregon High Court Over Duty-To-Defend Standard
SALEM, Ore. - In briefs filed in the Oregon Supreme Court, a general contractor and an insurer debate whether the determination of the duty to defend in an underlying construction defects lawsuit properly included an examination of extrinsic evidence as to the contractor's insured status, or whether only the complaint's specific allegations should be considered (West Hills Development Co. v. Chartis Claims, Inc., et al., No. S063823, Ore. Sup.).