Mealey's Construction Defects Insurance

  • October 24, 2023

    In Revised Ruling, Illinois Panel Reverses, Finds Insurer Entitled To Subrogation

    CHICAGO — An Illinois appellate panel on Oct. 24 reversed a lower court’s grant of summary judgment to an engineering firm in a builders risk insurer’s suit seeking subrogation damages for the flooding of a building under construction, finding that the trial court erred in finding that the insurer does not meet the prerequisites for equitable subrogation because the insurer’s right to subrogate stemmed from the insurance contract.

  • October 23, 2023

    Lawyer Insured: Panel’s Ruling Guts Professional Liability Insurer’s Duty To Defend

    NEW YORK — A lawyer insured on Oct. 21 filed a petition for rehearing en banc seeking to reverse the Second Circuit U.S. Court of Appeals’ ruling that a professional liability insurer has no duty to defend its construction management company against a lawsuit arising from a home renovation project because the underlying complaint fails to allege professional services that the insured provided as a lawyer to trigger coverage, arguing that the panel’s decision “abrogates decades of black-letter New York insurance law that favors insureds, effectively gutting an insurer’s duty to defend.”

  • October 17, 2023

    3rd Circuit Dismisses Contractor’s, Homeowners’ Appeal In Mold Coverage Case

    PHILADELPHIA — The Third Circuit U.S. Court of Appeals has dismissed homeowners’ and their contractor’s appeal of a lower court ruling that the contractor’s insurer owes them no coverage for personal injuries one of the homeowners sustained as a result of a mold infestation caused by the contractor’s negligent workmanship after the parties stipulated to dismissal following mediation.

  • October 17, 2023

    Builder’s Coverage Dispute Over Home Subject To Flooding Dismissed After Settlement

    FORT WORTH, Texas — A federal judge in Texas has dismissed with prejudice a homebuilder’s suit against a commercial general liability insurer, which in 2022 he found had a duty to defend the builder in a coverage dispute over its alleged failure to disclose to homebuyers that a home it built was subject to flooding after the parties filed a joint motion for dismissal of the case.

  • October 16, 2023

    Mississippi High Court Majority: Fire Not Latent Injury To Trigger Discovery Rule

    JACKSON, Miss. — A majority of the Mississippi Supreme Court found that a fire that started in a metal storage bin containing wood shavings the night after a welding company had repaired the bin was not a latent injury to trigger the discovery rule, affirming that a subrogated insurer’s negligence suit against the welding company is time-barred.

  • October 16, 2023

    Maryland Panel: Insurer’s Negligence Claims Against Subcontractors Are Not Barred

    ANNAPOLIS, Md. — Reversing a lower court in part, a Maryland appeals panel held Oct. 13 that contractual waivers of subrogation do not bar an all-risk insurer’s claims alleging that tornado damage to an Amazon warehouse was caused by subcontractors’ negligence in designing and building the warehouse because the subcontractors were not intended third-party beneficiaries of the subrogation waiver.

  • October 16, 2023

    Federal Judge Grants Motion To Voluntarily Dismiss Pipeline Explosion Suit

    BIRMINGHAM, Ala. — An Alabama federal judge granted a motion to voluntarily dismiss with prejudice a lawsuit filed by two insurers seeking a declaration that no coverage is owed for a gas pipeline explosion after the insurers notified the court that they reached a settlement with their insureds.

  • October 16, 2023

    Insurer Appeals Ruling That Negligence Claim Against Engineer Is Time-Barred

    CHEYENNE, Wyo. — A subrogated homeowners insurer has appealed to the 10th Circuit U.S. Court of Appeals a federal judge in Wyoming’s ruling that its claim against the engineer that designed a home’s plumbing is time-barred by the two-year statute of limitations for professional negligence claims as the claim began to run when the engineer submitted the final design plans.

  • October 13, 2023

    Magistrate Recommends Denying Judgment To Insurer In Sewer Pipe Break Coverage Row

    SEATTLE — A federal magistrate judge in Washington recommended denying an insurer’s motion for summary judgment in a coverage dispute related to a contractor’s alleged faulty construction of a conveyance pipe for a sewer overflow control project, finding that the insurer failed to show that there is no coverage pursuant to the policy.

  • October 11, 2023

    No Professional Services Alleged To Trigger Coverage For Lawyer, 2nd Circuit Says

    NEW YORK — The Second Circuit U.S. Court of Appeals on Oct. 10 affirmed a lower court’s ruling in favor of a professional liability insurer in a declaratory judgment and breach of contract lawsuit brought by a lawyer insured, agreeing with the lower court that the insurer has no duty to defend the insured’s construction management company against a lawsuit arising from a home renovation project because the underlying complaint fails to allege professional services that the insured provided as a lawyer to trigger coverage.

  • October 10, 2023

    California Federal Judge Finds Contractor Cannot Bring Bad Faith Claim

    LOS ANGELES — Because there has been no excess judgment in underlying arbitration proceedings stemming from a general contractor’s alleged failure to properly secure a building under construction in advance of a hurricane, the contractor cannot state a claim against a commercial general liability insurer for bad faith, a federal judge in California ruled in granting the insurer’s motion for partial summary judgment on the claim.

  • October 10, 2023

    Magistrate Finds Insurer Had Duty To Defend Mutual Insured In Defects Suit

    EL PASO, Texas — A commercial general liability insurer had a duty to defend its electrical contractor insured in an underlying construction defects action, but genuine issues of material fact preclude a ruling on whether it had a duty to indemnify the contractor, a federal magistrate judge in Texas found, recommending that the insurer be required to pay its share of defense costs as sought by the insured’s other CGL insurers.

  • October 05, 2023

    11th Circuit: District Court Had Jurisdiction, Appeal Against Insurer May Proceed

    ATLANTA — The 11th Circuit U.S. Court of Appeals has determined that the dismissal of a contractor from an insurer’s declaratory judgment action related to an underlying construction defect action was valid and that the parties were diverse in the first instance, allowing the project owner’s appeal of the lower court’s ruling granting judgment on the pleadings to the insurer, which was noticed in December, to proceed.

  • October 05, 2023

    Summary Judgment Granted For Insurer; Bad Faith Claim Dismissed With Prejudice

    NEWARK, N.J. — A federal judge in New Jersey granted an insurer’s motion for summary judgment in part, dismissing with prejudice a condominium association’s bad faith claim against the insurer but otherwise denying the insurer’s motion, ruling that the question of whether the insurer is liable for $113 million for water damage to a property allegedly caused by an engineering firm the association hired “contains genuine issues of material fact best reserved for a jury.”

  • October 05, 2023

    Judge Rules Subcontractor’s ‘Faulty Workmanship’ Not Covered By Insurer

    ROME, Ga. — A federal judge in Georgia granted an insurer’s motion for summary judgment and denied a masonry company’s cross-motion, ruling that a subcontractor’s “faulty workmanship” was not covered because of a business risk exclusion in the insurer’s policy.

  • October 05, 2023

    Oregon High Court Urged To ‘Quash Confusion,’ Clarify ‘Occurrence’ Requirement

    SALEM, Ore. — Saying a commercial general liability insurer’s respondents’ brief “illustrates precisely why clarification of Oregon law on the interpretation of ‘occurrence’ is needed,” homeowners urge the state Supreme Court to “clarify that ‘occurrence’ is interpreted by the words used to define it and that ‘accident’ and ‘exposure’ turn on the facts of what happened, without regard to the legal theory of liability that might be later applied to those facts in a legal proceeding.”

  • October 05, 2023

    Parties In Design Defects Coverage Suit Over Parking Deck Resolve Dispute

    WASHINGTON, D.C. — The parties in a coverage lawsuit stemming from repairs a building owner was required to make on structural supports in a parking garage based on its faulty design and construction on Oct. 4 stipulated to the dismissal of both the suit in District of Columbia federal court and the owner’s appeal, noting that they have “resolved all disputes” in the case.

  • October 05, 2023

    Alabama Federal Judge: Court Has Jurisdiction In Insurer’s Declaratory Action

    BIRMINGHAM, Ala. — A federal judge in Alabama has denied contractors’ motion to dismiss for lack of jurisdiction a declaratory judgment action filed against them by their preferred business insurer, finding that the court has subject matter jurisdiction because the parties are diverse and the cost of defending the underlying state court action against them exceeds the $75,000 amount in controversy and that the lack of a judgment in the underlying action does not mean that the federal court lacks standing under Article III of the U.S. Constitution.

  • October 04, 2023

    Judge Finds Insurer Breached Contract In Denying Bridge Damage Coverage Claims

    WASHINGTON, D.C. — A federal judge in the District of Columbia granted a bridgebuilder summary judgment on its breach of contract claim against its builders risk insurer, finding that the policy’s definition of “damage” includes its claim for reimbursement for repair costs necessitated by defects in the concrete of the bridge and that the insurer failed to demonstrate that any exclusions apply.

  • October 03, 2023

    Judgment Stayed After Builders Risk Insurer Appeals Verdict, Post-Trial Rulings

    DENVER — A federal judge in Colorado on Oct. 2 stayed the execution of final judgment in a condominium developer’s suit against its builders risk insurer pending resolution of all appellate proceedings after the insurer appealed the judgment, all rulings and orders related to the jury’s award of $2.54 million in damages to the developer and a number of post-trial rulings to the 10th Circuit U.S. Court of Appeals.

  • October 03, 2023

    Judge Finds Insurers Have Duty To Defend Contractor For Faulty Roof Installation

    HOUSTON — Because there is a question of fact regarding whether a general contractor knew before the policy periods that property damage had occurred as a result of leaks in a roof it constructed, there is a potential for coverage under its commercial general liability policies and its insurers have a duty to defend it in an underlying breach of contract case, a federal judge in Texas found in denying the insurers’ motion for summary judgment and granting the contractor’s competing motion.

  • October 03, 2023

    Pollution Exclusion Bars Coverage For Damages Caused By Stormwater Runoff

    ATLANTA — A Georgia federal judge granted a homebuilder liability insurer’s motion to dismiss an insured’s breach of contract suit after determining that no coverage is afforded for an underlying suit alleging property damages caused by stormwater runoff created by the insured’s construction of a townhome development because the policy’s pollution exclusion bars coverage for stormwater runoff.

  • September 27, 2023

    Federal Jury Finds Sprinkler Subcontractor Failed To Perform Work In Good Manner

    LAKE CHARLES, La. — Following a three-day trial, a federal jury in Louisiana found that a sprinkler subcontractor failed to perform its work on a sprinkler system in a newly constructed fitness club in a good, workmanlike manner but also decided that the subcontractor was not the cause-in-fact of damages sustained by the club’s owner.

  • September 27, 2023

    1 Insurer Wins, 1 Loses In Competing Summary Judgment Motions Over Pavement Failure

    CHICAGO — After first finding that Illinois law applies to a coverage dispute over the failure of pavement at a Michigan outlet mall, a federal judge in that state granted summary judgment to one subcontractor’s insurer and denied the competing summary judgment motion of another subcontractor’s insurer, finding that because the underlying complaint seeks only the costs of repairing the general contractor’s work, it does not allege an “occurrence” or “property damage” to trigger the first insurer’s duty to defend.

  • September 26, 2023

    Federal Judge Dismisses Insurer’s Suit As ‘Shotgun Pleading’ With Leave To Amend

    ORLANDO, Fla. — A federal judge in Florida partially granted two motions to dismiss from a homeowners’ association and a contracting company and sua sponte dismissed claims against a builder on the ground that an insurer’s complaint alleging liability for construction-related damages from a condominium development was a “shotgun pleading” that failed to separate each claim into a different count and to specify which claim applied to which defendant.