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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®


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.).

Alabama Supreme Court: Negligence Claim Against Insured Meant For Arbitration
MONTGOMERY, Ala. - A condominium association's breach of warranty and negligence claims against a contractor, its subcontractor and their surety are subject to mandatory arbitration under the language of the contract between the association and the contractor, the Alabama Supreme Court affirmed Oct. 21 (The Hanover Insurance Co., et al. v. Kiva Lodge Condominium Owners' Association Inc., No. 1141331, Ala. Sup.; 2016 Ala. LEXIS 123).

Federal Judge Denies Default Judgment To Insurer As To Homeowners' Negligence Suit
HAMMOND, Ind. - Noting the possibility of inconsistent adjudications, an Indiana federal judge on Oct. 18 denied an insurer's request for a default judgment against insured contractors because homeowners' underlying negligence lawsuit against them has not been resolved by judgment and the homeowners are named in the coverage dispute (Property-Owners Insurance Co. v. Raymond T. Yagelski, et al., No. 14-267, N.D. Ind.; 2016 U.S. Dist. LEXIS 143914).

Iowa Appeals Panel: Insured's Faulty Work Potentially Constitutes An 'Occurrence'
DES MOINES, Iowa - Claims of an insured subcontractor's defective workmanship that caused damages beyond its own work potentially constitute an "accident" that is an "occurrence" covered by a commercial general liability insurance policy, the Iowa Court of Appeals held Oct. 12, finding that the insurer has a duty to defend (Hudson Hardware Plumbing & Heating Inc. v. AMCO Insurance Co., No. 15-1677, Iowa App.; 2016 Iowa App. LEXIS 1097).

Insured's Defective Work Is Not An 'Occurrence,' Federal Judge Concludes
PHILADELPHIA - Under Pennsylvania law, allegations of an insured's faulty workmanship do not constitute an "occurrence," a Pennsylvania federal judge ruled Oct. 5, finding that a comprehensive business liability insurer has no duty to defend or indemnify an underlying negligent construction lawsuit (State Farm Fire and Casualty Co. v. Kim's Asia Construction, No. 15-6619, E.D. Pa.; 2016 U.S. Dist. LEXIS 138915).

Appeals Panel: Insurer's Defense Over Repairs Was Wrongfully Denied
WEST PALM BEACH, Fla. - In a coverage dispute over water damage to an insured's kitchen, an insurer was wrongfully denied an opportunity to argue that it could repair the damaged property and that hiring a general contractor was unnecessary, a Florida appeals panel ruled Oct. 13, reversing a trial judge's entry of summary judgment to the insured (Prepared Insurance Co. v. David Gal, No. 4D15-1909, Fla. App., 4th Dist.; 2016 Fla. App. LEXIS 15181).

Contractor Cannot Recover Damages From Subcontractor's Insurer, Federal Judge Says
CINCINNATI - A general contractor is not entitled to coverage from a subcontractor's insurer for a portion of damages awarded against the contractor for faulty workmanship by an arbitration panel because the water infiltration damages at issue did not occur during the insurer's policy period, an Ohio federal judge said Oct. 31 (The Weitz Co. LLC v. Acuity, No. 12-855, S.D. Ohio; 2016 U.S. Dist. LEXIS 150433).

Continuous Injury Exclusion Bars Coverage For Insured's Defects, Judge Concludes
SACRAMENTO, Calif. - A "continuous or progressive injury" (CP) exclusion precludes coverage in most of the various underlying construction defects lawsuits filed against two insured subcontractors, a California federal judge ruled Oct. 31 (American Zurich Insurance Co., et al. v. Ironshore Specialty Insurance Co., No. 14-00060, E.D. Calif.; 2016 U.S. Dist. LEXIS 150684).

Judge Allows More Briefing On 'Your Work' Exclusion In Insurance Coverage Suit
ORLANDO, Fla. - A Florida federal judge on Oct. 20 conditionally agreed to reconsider his ruling that a commercial general liability insurance policy precluded coverage for a lawsuit over damage to a condominium complex because the damage was to the contractor's own defective work, asking for more briefing on 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.).

Judge Dismisses Insurers' Equitable Reimbursement Claim Against Additional Insureds
LOS ANGELES - Commercial general liability insurers failed to allege that they defended "immediately" and "in its entirety" underlying construction defects lawsuits, a California federal judge ruled Sept. 29, dismissing the insurers' equitable reimbursement claim (St. Paul Mercury Insurance Co., et al. v. Del Webb California Corp., et al., No. 16-209, C.D. Calif.; 2016 U.S. Dist. LEXIS 143072).

Panel: Insured's Settlement Bars Subrogated Insurer's Condo Defect Claims
TRENTON, N.J. - The entire-controversy doctrine precludes a subrogated insurer from asserting claims on behalf of its insured against an engineering firm for damage to a condominium because the claims were fully resolved in a prior lawsuit filed by the insured, a New Jersey appeals panel ruled Oct. 20 (Franklin Mutual Insurance Co. as subrogee of Sevastyan Ploshchansky v. Castle Restoration and Construction Inc. and Falcon Engineering Company LLC, No. A-5272-14T2, N.J. Super., App. Div.).

Florida Supreme Court Affirms Panel's Reversal Of $130,600 Appraisal Award
TALLAHASSEE, Fla. - The Florida Supreme Court on Oct. 20 held that insureds' claim for sinkhole damage is governed by the definition of "covered claim'" in Section 631.54(3), Florida Statutes, that was effective May 17, 2011, affirming an appeals court's reversal of a lower court's order confirming a $130,600 appraisal award against the Florida Insurance Guaranty Association (FIGA) (Leandro de la Fuente, et al. v. FIGA, No. SC15-519, Fla. Sup.).

Florida Panel Grants Motion To Enforce Mandate In Sinkhole Coverage Dispute
LAKELAND, Fla. - A Florida appeals panel on Oct. 14 granted a property insurer's motion to enforce a mandate ordering a lower court to enter final judgment in its favor in a sinkhole coverage dispute (Florida Peninsula Insurance Co. v. Maricela Cespedes, No. 2D12-4575, Fla. App., 2nd Dist.; 2016 Fla. App. LEXIS 15238).

Florida Panel Reverses Ruling In Insurer's Favor In Sinkhole Coverage Dispute
DAYTONA BEACH, Fla. - A Florida appeals panel on Oct. 21 reversed and remanded a lower court's ruling in favor of an insurer in a sinkhole coverage dispute, noting that the lower court relied on binding precedent that has since been disapproved by the Florida Supreme Court (Marcial Garcia, et al. v. Tower Hill Signature Insurance Company, No. 5D15-1628, Fla. App., 5th Dist.; 2016 Fla. App. LEXIS 15695).

No Collapse; No Coverage, New York Justice Rules In Breach Of Contract Dispute
WHITE PLAINS, N.Y. - A New York justice on Sept. 30 granted a commercial property insurer's motion for summary judgment in a breach of contract lawsuit filed by its insured, finding that the insured's loss failed to constitute a collapse necessary to trigger coverage under the policy (HB Holdings & Realty Management LLC d/b/a Balsamo Holdings Corp., et al. v. Tower Insurance Company of New York, No. 56804/2015, N.Y. Sup., Westchester Co.).

Insurer Claims It Has No Obligation To Reimburse Other Insurer For Defects Case
ATLANTA - An insurer recently told the 11th Circuit U.S. Court of Appeals that it owed no duty to defend a contractor against construction defects allegations and owes no duty to reimburse the contractor's insurer for defending the contractor in a Florida state suit (Travelers Property Casualty Company of America v. Amerisure Insurance Company, No. 16-11227, 11th Cir.).

This "Suit" Is Defective: Examining An Insurer's Duty to Defend Pre-Litigation "Right To Repair" Construction Defect Claims
By Christopher P. Ferragamo and Alexis P. Joachim I. Introduction A standard commercial general liability (CGL) insurance policy typically provides a policyholder with both defense coverage (which requires the insurance company to defend the insured against certain legal proceedings and pay defense costs outside the limits of the insurance policy) and indemnity coverage for damages caused by bodily injury, property damage, and personal and advertising injuries subject to certain obligations and limitations. The breadth and scope of the insurer's defense obligation is an area of disagreement between policyholders and insurers and one that generates a sizable amount of the insurance coverage litigation filed each year. One such area of disagreement, which is the focus of this article, is whether an insurer is obligated to provide a defense to an insured (e.g. retain and pay defense counsel costs and expenses) when traditional litigation has not actually been commenced against an insured. With the enactment of "Right to Repair" statutes in thirty-two states - which require homeowners to comply with certain "pre-litigation" measures before filing a lawsuit against a homebuilder - the issue over an insurer's obligation to defend a homebuilder-insured during this "pre-litigation" process has become a focal point of disputes between insureds and their insurers.