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

Mealey's Construction Defects Insurance

June 12, 2025
Judge: Tract Housing Exclusion Bars Defense, Indemnity For Building Defect Claims

TACOMA, Wash. — A federal judge in Washington dismissed an insurance coverage suit filed by several homeowners, as assignees of a developer, alleging a general liability insurer breached its duty to defend and indemnify the developer for claims arising from the developer’s defective construction of the homeowners’ houses, agreeing with a magistrate judge’s report and recommendation that a tract housing exclusion precluded coverage.
June 10, 2025
8th Circuit Affirms No Soft Costs Owed To Developer Due To Policy Exclusion

ST. LOUIS — An Eighth Circuit U.S. Court of Appeals panel on June 9 affirmed a lower court’s dismissal of a complaint brought by a property owner who sought soft costs and loss of rental income from a contractor’s insurer after the failure of a retaining wall at an apartment complex project, finding that coverage is precluded under the language of the insurance policy.
June 09, 2025
Insurer Accepts Subcontractor’s Offer To Settle Negligence Claims For $100,000

BISMARK, N.D. — A federal court in North Dakota entered a $100,000 judgment favor of a subrogated insurer against a subcontractor the insurer alleged used the wrong materials in constructing a storage building for its insured; the entry followed the insurer’s notice to the court that it had accepted the subcontractor’s offer of judgment.
June 06, 2025
6th Circuit Denies Petition For Rehearing On Duty-To- Defend Building Damage Suit

CINCINNATI — A panel of the Sixth Circuit U.S. Court of Appeals on June 5 denied an insurer’s petition for rehearing of the panel’s decision that alleged damages to a building caused by a contractor’s work could potentially be covered by the contractor’s commercial general liability and umbrella excess insurance policies.
June 06, 2025
New York Appeals Court: Insurer Can’t Escape Suit In Building Collapse

BROOKLYN, N.Y. — A New York state appeals court has affirmed that an insurer cannot be dismissed from a coverage action involving a demolition mishap that resulted in an entire building collapse, saying the insurer did not refute the factual allegations and that it was not entitled to a collateral estoppel defense from other legal actions in the case.
June 05, 2025
Insurer Appeals Judgment For CGL Insurer In Suit Arising From Hotel Damages

SANTA ANA, Calif. — An insurer that issued an owner controlled consolidated insurance policy to a general contractor hired to construct a Hard Rock Hotel notified a federal court in California on June 4 that it is appealing to the Ninth Circuit U.S. Court of Appeals the lower court’s rulings in favor of a subcontractor’s commercial general liability insurer in the CGL insurer’s equitable contribution and equitable indemnification suit arising from construction defect-related damages to the hotel.
June 04, 2025
Judge Finds Insured Contractor’s Underlying Coblentz Agreement Unreasonable

JACKSONVILLE, Fla. — A Florida federal judge granted summary judgment to an insurer that was sued by a condominium association as assignee for the insured general contractor seeking to collect funds agreed to under a Coblentz settlement in an underlying suit stemming from defects in the construction of a condominium building, finding the agreement to be unreasonable.
June 02, 2025
Parties Settle Subrogee Insurer’s Federal Lawsuit Against Roofing Contractor

CHICAGO — A federal judge in Illinois said a subrogee insurer and a roofing contractor settled the insurer’s breach of implied warranties and breach of contract lawsuit stemming from the contractor’s alleged improper installation of a roof at a condominium development.
May 30, 2025
Judge Grants Summary Judgment To Subcontractor’s Insurer In Coverage Dispute

JACKSONVILLE, Fla. — A federal judge in Florida found that a subcontractor’s insurer wasn’t required to provide primary coverage to a contractor’s insurer in a third-party complaint brought by the contractor’s insurer stemming from construction defects in the subcontractor’s work that caused water to enter a condominium building’s garage because the subcontractor’s insurer had been released in a settlement between the contractor and the subcontractor.
May 30, 2025
Insurers, Insured Reach Settlement In Earth Movement Coverage Dispute

MINNEAPOLIS — In minute proceedings held before a federal magistrate judge in Minnesota, an insured and its insurers indicated they have reached a settlement of the insured’s breach of contract suit seeking damages related to the cracking and settling of reinforced equipment pads in its printing facility.
May 29, 2025
Roofing Contractor Appeals Coverage Ruling For Insurer To 7th Circuit

CHICAGO — A roofing contractor on May 28 notified an Illinois federal court that it is appealing the court’s grant of judgment on the pleadings to its insurer in the insurer’s suit seeking a declaration that it has no duty to defend or indemnify the contractor in an underlying lawsuit alleging that the insured’s negligent repair work contributed to the collapse of a building façade, killing two people.
May 28, 2025
Subrogated Insurer’s Case Against Contractor Dismissed Per Parties’ Stipulation

JACKSONVILLE, Fla. — Construing the parties’ stipulation of dismissal as a motion to dismiss, a federal judge in Florida on May 27 granted the motion and closed the case filed by a condominium insurer, as subrogee, against a subcontractor hired to install decking at the condominium pool.
May 28, 2025
10th Circuit Finds Date Of Plumbing Plan Unclear, Reverses Judgment For Engineer

DENVER — In the wake of the Wyoming Supreme Court’s ruling that the two-year statute of limitations for professional negligence claims attaches to the design that was the legal cause of the purported injury, the 10th Circuit U.S. Court of Appeals on May 27 ruled that a trial court erred in finding a subrogated homeowners insurer’s claim against a mechanical engineering firm that designed a home’s plumbing time-barred, noting that the record does not include the date of the plans the plumber used to install the faulty plumbing.
May 28, 2025
Judge Finds Insurer Not Required To Defend, Indemnify Defective Work Claims

ATLANTA — A federal judge in Georgia granted default judgment to an insurer that sought a declaration that it was not required to defend or indemnify a subcontractor or the contractor it worked with in a lawsuit claiming that their work was defective, finding that the underlying claims were not for property damage as defined in the insurance policy.
May 27, 2025
Excess Insurer Has No Duty To Indemnify Property Owners Who Qualify As Insureds

BROOLYN, N.Y. — A federal judge in New York declared an excess insurer has no duty to indemnify property owners who qualified as insureds under a building contractor’s insurance policy for losses caused by subsidence, granting the insurer’s motion for summary judgment in its declaratory judgment lawsuit.
May 23, 2025
Judge Finds Subcontractor Exclusion Precludes Defense In Underlying Roof-Leak Suit

TEXARKANA, Texas — A federal judge in Arkansas granted a commercial general liability insurer’s motion for partial summary judgment against a contractor it insured, finding the subcontractor exclusion in the policy precluded coverage for an underlying case brought by the owner of an apartment complex that was remodeling 12 buildings alleging that defective roofing work by the insured’s subcontractor caused the roofs on the buildings to leak.
May 20, 2025
Contractor Urges 6th Circuit To Deny Rehearing On Duty-To-Defend Rulings

CINCINNATI —A contractor urged a Sixth Circuit U.S. Court of Appeals panel not to grant its insurers’ petition for rehearing of the panel’s decision that alleged damages to a preexisting building caused by the contractor’s work could potentially be covered by the contractor’s commercial general liability and umbrella excess insurance policies, arguing that the insurers’ reasoning for seeking a rehearing is without merit.
May 15, 2025
N.J. Judge Denies Insurers’ Motion To Reconsider Rulings In Defects Coverage Suit

NEWARK, N.J. — A New Jersey judge denied insurers’ motion for reconsideration of two earlier rulings that denied their motion for summary judgment and granted in part insureds’ motion to compel discovery in the insurers’ lawsuit disputing coverage for an underlying construction defects lawsuit.
May 15, 2025
Magistrate Recommends Granting Contractor, Homebuilder Motions For Attorney Fees

ORLANDO, Fla. — A federal magistrate judge in Florida recommended granting a general contractor and homebuilder’s motions for entitlement to attorney fees following a summary judgment ruling in their favor in a commercial general liability insurer’s lawsuit seeking a declaration as to coverage for construction-related damages at a condominium development.
May 14, 2025
Shingle Manufacturer Granted Partial Dismissal In Roof Damage Coverage Dispute

NEWARK, N.J. — A federal judge in New Jersey dismissed some claims against a shingle manufacturer in a suit brought by a homeowner against his homeowners insurer and the shingle manufacturer after the homeowner and insurer attributed damage to the homeowner’s roof to defective shingles, finding that some of the homeowner’s claims were barred by the applicable statute of limitations and the economic loss doctrine.
May 13, 2025
Minnesota Panel: Insurer Must Pay $174K Of $2M Construction Defects Settlement

ST. PAUL, Minn. — Applying for the first time a framework set forth by the Minnesota Supreme Court for assessing the reasonableness and allocation of unallocated Miller-Shugart agreements, the Minnesota Court of Appeals on May 12 affirmed a trial court’s ruling that an unallocated $2 million settlement between a marina and a contractor over construction defect claims was reasonable and the court’s finding that the contractor’s insurer must pay $174,350 of that amount.
May 12, 2025
Insureds’ Waiver Against Subcontractor Precludes Insurer’s Claims As Subrogee

BISMARCK, N.D. — A federal judge in North Dakota granted summary judgment to a subcontractor that was sued for negligence by a building owner’s insurer after the building it constructed suffered damage during a windstorm, allegedly due to the use of wrong materials, finding that because the building owner had waived its right to bring claims against the contractor and all subcontractors, the insurer had no right to bring claims against any of those parties.
May 12, 2025
Judge Denies Motion To Amend Judgment In Suit Arising From Hard Rock Hotel Damages

SANTA ANA, Calif. — A California federal judge denied without prejudice a commercial general liability insurer’s motion to amend a $2,186,359.76 judgment in its favor to include $780,360.12 in prejudgment interest in its equitable contribution and equitable indemnification lawsuit arising from damages to a Hard Rock Hotel location, finding that the motion fails to comply with the meet-and-confer requirements under a civil standing order that was issued to the parties.
May 09, 2025
Insurer Gets Partial Summary Judgment; Builder Must Repay $5.57M

ROCHESTER, N.Y. — A New York state court justice partially granted a subcontractor default insurer’s motion for summary judgment and determined that a construction manager/prime contractor for a retirement community project must repay the insurer $5.57 million from construction defect claim payments it received because the policy contemplates a later action against a defaulting subcontractor to recover sums paid to an insured and an arbitration panel found that some of the losses did not result from the subcontractor’s default.
May 09, 2025
Pool Defect Insurance Case Stayed Pending Further Factual Development

AUSTIN, Texas — A Texas federal judge has denied dismissal of a pool construction defect insurance lawsuit but granted an alternative motion to stay the case pending further factual development and possible related litigation.