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

Mealey's Construction Defects Insurance

May 16, 2024
Contractor Says 7th Circuit Opinion Conflicts With Illinois Insurance Law

CHICAGO — A general contractor petitioned the Seventh Circuit U.S. Court of Appeals for en banc rehearing, arguing that a recent opinion in which a panel found that the contractor was not owed a defense or indemnification because defective welding it performed at O’Hare International was not “property damage” under the terms of insurance policies cannot be squared away with “well settled Illinois law requiring insurers to defend policyholders unless the underlying facts pled preclude any possibility of coverage.”
May 15, 2024
Construction Insurance Coverage Suit Tossed After Underlying Suit Settles

AUGUSTA, Ga. — A federal judge in Georgia dismissed without prejudice a declaratory judgment action brought by an insurer that claimed it owed no coverage for claims related to the insureds’ assembly of a manufactured home that sustained water and mold damage after the parties indicated that the underlying suit had been settled.
May 13, 2024
9th Circuit Affirms No ‘Accident’ In Appeal Of Construction Insurance Dispute

PASADENA, Calif. — The Ninth Circuit U.S. Court of Appeals on May 13 affirmed in an unpublished memorandum a Nevada federal judge’s grant of an insurer’s motion for judgment on the pleadings in a coverage dispute with a contractor and a homeowners association (HOA), finding that the insurer was entitled to a declaratory judgment of no coverage because an “accident” had not occurred while the contractor worked on one of the HOA’s buildings.
May 13, 2024
Insured Cannot Reassert Bad Faith Claim In Collapse Coverage Suit, Judge Says

PHILADELPHIA — A Pennsylvania federal judge denied an insured’s motion for leave to reassert a bad faith claim against its commercial property insurer in a dispute over coverage for the partial collapse of a building because the insured failed to show that the insurer’s reliance on the policy’s faulty workmanship exclusion to deny coverage was unreasonable.
May 10, 2024
New Jersey Appeals Court Says Subcontractor Was Part Of Settlement With Owner

JERSEY CITY, N.J. — The New Jersey Superior Court Appellate Division found that a trial court judge erred by finding that a subcontractor was not enrolled in a contractor consolidated insurance program (CCIP); the appeals court reversed the judge’s decision to deny the subcontractor’s motion to enforce a settlement agreement in the dispute over construction damages and dismiss the claims against it.
May 09, 2024
Mississippi Appeals Court: Contractor, Insurer’s Indemnity Claim Unripe When Filed

JACKSON, Miss. — The Mississippi Court of Appeals upheld a state circuit court’s decision to dismiss a declaratory judgment complaint brought by a contractor and its insurer against a subcontractor in a coverage dispute stemming from faulty masonry, finding that the question of the insurer’s duty to indemnify the subcontractor was not ripe when the complaint was filed.
May 09, 2024
Insurer Not Prejudiced By Letting Contractor Amend Counterclaims, Magistrate Says

SEATTLE — A federal magistrate judge in Washington granted a contractor’s motion to amend its counterclaims and third-party complaint in a coverage dispute with two insurers over the insurers’ duty to defend the contractor against allegations of faulty construction of a conveyance pipe for a sewer overflow control project; the contractor filed its amended counterclaims on the same day.
May 09, 2024
Magistrate Judge: Insurer’s Duty To Defend, Indemnify Concrete Company Not Ripe

AUSTIN, Texas — A federal magistrate judge in Texas recommended the stay of a declaratory judgment complaint brought by an insurer against an insured concrete company, finding that the question of whether the insurer must indemnify and defend the company against claims in a series of underlying complaints for alleged faulty installation of concrete is not yet ripe for consideration.
May 08, 2024
Judge Rules New Orleans Cannot Make Insurers Arbitrate Airport Construction Claims

NEW ORLEANS — A federal judge in Louisiana found that New Orleans cannot compel arbitration with insurers over coverage stemming from construction damages at a city airport, finding that the insurers did not agree to arbitrate claims asserted by the New Orleans Aviation Board (NOAB).
May 08, 2024
3rd Circuit OKs Dismissal Of Stucco Subcontractor’s Appeal Of Coverage Dispute

PHILADELPHIA — The Third Circuit U.S. Court of Appeals dismissed an insured stucco subcontractor’s appeal of a Pennsylvania federal judge’s ruling granting judgment on the pleadings to two insurers who argued they had no duty to defend the subcontractor against water damage claims, after the parties filed a stipulation of voluntary dismissal.
May 07, 2024
Idaho Law Precludes Homeowner From Bringing Claims Against Insurer In Roofing Row

POCATELLO, Idaho — Warranty claims brought by a homeowner against an insurer and a roofing company that allegedly failed to repair a roof are barred against the insurer because insurers may not be sued under Idaho law absent a contractual or statutory provision authorizing an action, an Idaho federal judge found in granting the insurers’ motion to dismiss.
May 06, 2024
Insurer, HOA File Notice Of Tentative Settlement In Dispute Over Constructed Homes

JACKSONVILLE, Fla. — An insurer and a homeowners’ association filed a notice in a Florida federal court indicating that they intend to file a joint stipulation of dismissal of their construction insurance dispute, wherein the insurer sought a declaration that it owed no indemnification to a subcontractor that worked on homes operated by the HOA, due to a tentative settlement in an underlying lawsuit.
May 03, 2024
Federal Judge Finds No Jurisdiction In Construction Insurance Dispute, Remands

SAN FRANCISCO — A federal judge in California remanded to state court a construction insurance dispute brought by a contractor alleging that its insurer acted in bad faith when it refused to pay for most of an arbitration award related to a faulty roof, finding that the insurer failed to join necessary parties when removing the case to federal court.
May 03, 2024
Judge: No Duty For Agent To Procure Policy Without Exclusions For Contractor

DENVER — A Colorado federal judge granted a procuring insurance agent’s motion for summary judgment on claims assigned to a couple by the contractor that defectively constructed their home, finding that the couple failed to establish that the contractor had entered into a contract with the procuring insurance agent that would require it to provide an insurance policy that did not contain policy exclusions that led to denial.
May 01, 2024
10th Circuit: Insurer’s Coverage Denial For Steel Collapse Not In Bad Faith

DENVER — A 10th Circuit U.S. Court of Appeals panel on April 30 affirmed a Wyoming federal judge’s finding that a building owner insured is owed no coverage under an insurance policy’s additional abrupt collapse coverage, finding that the building owner did not show that the insurer or its claims service manager acted in bad faith.
May 01, 2024
Subcontractor Appeals Summary Judgment Rulings In Worker Injury Coverage Dispute

NEW YORK — A subcontractor on April 30 filed a notice in a New York federal court indicating it is asking the Second Circuit U.S. Court of Appeals to review the federal court’s orders that denied its motion for partial summary judgment and granted insurers’ motion for summary judgment in its lawsuit arising from personal injury actions brought by two of its workers.
April 30, 2024
Federal Judge: Insurer Not Entitled To Attorney Fees In Row Over Faulty Pool

MISSOULA, Mont. — A federal judge in Montana largely denied an insurer’s request for attorney fees and costs after a March finding that the insurer owed no coverage to a couple whose property was damaged by water draining from an improperly designed “disappearing floor” pool, finding the insurer does not illustrate the extreme circumstances required in declaratory judgment cases under Montana law.
April 30, 2024
Split 7th Circuit Upholds Finding Of No Coverage To Contractor Under Policies

CHICAGO — A split panel of the Seventh Circuit U.S. Court of Appeals on April 29 upheld a district court’s ruling that insurers do not owe a general contractor a defense or indemnification as an additional insured in a coverage dispute stemming from a subcontractor’s defective welding work at O’Hare International Airport, finding that defects in welding and columns do not constitute “property damage” under the relevant insurance policy.
April 29, 2024
Federal Judge Dismisses Worker Injury Coverage Suit Following Refiled Stipulation

NEW YORK — Following a stipulation of dismissal refiled by a subcontractor, a property owner and a construction manager, a New York federal judge on April 26 dismissed all remaining claims between them in the subcontractor’s lawsuit arising from personal injury actions brought by two of its workers.
April 25, 2024
11th Circuit Won’t Rehear Case After Finding No Coverage For Construction Manager

ATLANTA — A panel of the 11th Circuit U.S. Court of Appeals on April 24 denied an apartment project owner’s petition for panel rehearing, filed after a February opinion in which the panel affirmed a Florida federal judge’s finding that an insurance policy’s professional services exclusion bars an insurer’s duty to defend an insured construction management company that was sued for construction defects at the apartment project where it served as a construction manager.
April 24, 2024
More Claims Settled In Dispute Over Subcontractors’ Insurers’ Duty To Reimburse

FAYETTEVILLE, Ark. — A clerk’s order in an Arkansas federal court dismissed claims between two insurers in a dispute over whether the insurers of subcontractors were obliged to reimburse a construction company’s insurer for its defense of claims of faulty work in an arbitration, becoming the latest of multiple similar orders in the dispute.
April 24, 2024
Judge: Exclusion On Number Of Homes Built Means No Defense To Subcontractor

TACOMA, Wash. — Adopting a federal magistrate judge’s report and recommendation, a federal judge dismissed a subcontractor’s insurer from a construction insurance complaint, finding that the insurer owed no defense or indemnification to the contractor in an underlying complaint brought by a group of homeowners due to a policy exclusion related to the construction of a development with more than five units.
April 24, 2024
Insurer Appeals Dismissal Of Other Insurer In Mold Damage Coverage Dispute

LAS VEGAS — An insurance broker’s professional liability insurer appealed to the Ninth Circuit U.S. Court of Appeals a Nevada federal judge’s ruling in a mold and moisture damage coverage dispute finding that a contractor violated the terms of an insurance policy by incurring more than $1 million in repair costs without first seeking consent from an insurer.
April 23, 2024
Federal Judge: Factual Disputes Preclude Summary Judgment For Insurer, HOA

WILMINGTON, Del. — A federal judge in Delaware on April 22 denied motions for summary judgment from an insurer and a homeowners’ association, finding that there are genuine questions of material fact in the case over whether the insurer owes coverage for more than $8 million in damages awarded to the association in its underlying case against an insured contractor for excessive water infiltration and other issues.
April 22, 2024
Insurer Appeals To 5th Circuit Finding Of No Equitable Contribution

BEAMONT, Texas — A subcontractor’s insurer appealed to the Fifth Circuit U.S. Court of Appeals a Texas federal judge’s finding that the insurer is not entitled to equitable contribution from another insurer because of policy exclusions related to suits seeking contribution.