http://www.lexisnexis.com/mealeys/news.aspx Headline Construction Defects Insurance Legal News from LexisNexis® en-us http://www.lexisnexis.com/mealeys/images/lexismealeyslogo.gif 130 29 http://www.lexisnexis.com/mealeys/news.aspx Copyright 2013 http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%201%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' HARTFORD, Conn. - Claims of unintended faulty construction work by a subcontractor that damages nondefective property may constitute an "occurrence" resulting in "property damage" under a commercial general liability insurance policy, the Connecticut Supreme Court held in an opinion to be officially released June 11 (Capstone Building Corp. v. American Motorists Insurance Co., No. SC 18886, Conn. Sup.; 2013 Conn. LEXIS 187). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%202%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' ABINGDON, Va. - An insured subcontractor's alleged faulty work that caused damage to other property is property damage that constitutes an "occurrence," a Virginia federal judge ruled June 5, dismissing an insurer's claim for declaratory relief on the duty to defend issue (Nautilus Insurance Co. v. Strongwell Corp., No. 12-00038, W.D. Va.; 2013 U.S. Dist. LEXIS 79163). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%203%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SEATTLE - An insurance policy precludes coverage for an insured condominium association's damage caused by faulty workmanship and wind-driven rain, a Washington federal judge ruled May 14 (Siena Del Lago Condominium Association v. American Fire and Casualty Co., et al., No. 12-251, W.D. Wash.; 2013 U.S. Dist. LEXIS 69308). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%204%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SACRAMENTO, Calif. - Questions remain as to whether property damage occurred under an insurance policy's period and whether a stipulated judgment entered between mobile homeowners and the mobile park's owner was entered with collusion, a California federal judge ruled May 14, denying summary judgment to an insurer (Donald Anderson, et al. v. Century Surety Co. and Nationwide Mutual Insurance Co., No. 12-01057, E.D. Calif.; 2013 U.S. Dist. LEXIS 68646). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%205%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' DENVER - There is no property subject to homeowners' garnishment because an insurance policy did not cover property damage claims against the insured contractors, a Colorado federal judge ruled May 14 (Platt T. Hubbell and Kelley S. Hubbell $(n/k/a Kelly S. Hogan$) v. Carney Brothers Construction, et al., No. 05-00026, D. Colo.; 2013 U.S. Dist. LEXIS 68331). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%206%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SAN FRANCISCO - A California federal judge on May 30 dismissed an insurer's fraud, accounting and reimbursement claims against an insured and a law firm regarding defense coverage for underlying construction defect lawsuits (Travelers Property Casualty Company of America v. Centex Homes, et al., Nos. 13-0088, 12-0371 & 11-3638, N.D. Calif.; 2013 U.S. Dist. LEXIS 76308). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%207%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' PIERRE, S.D. - The South Dakota Supreme Court on May 15 affirmed summary judgment to an insurer regarding breach of contract and bad faith claims asserted by homeowners assigned rights from an insured alleged to have committed construction defects in their home (Jamie Swenson and Randy Stewart, individually and as assignees of Dale Jelen and DJ Construction LLC v. Auto-Owners Insurance Co., No. 26424, S.D. Sup.; 2013 S.D. LEXIS 64). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%208%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' PITTSBURGH - Concluding that a surety does not owe fiduciary duties to its principal under performance and payment bonds, a Pennsylvania federal judge on May 31 granted dismissal of breach of fiduciary claims against the surety related to disputes over two construction projects (Reginella Construction Company Ltd. v. Travelers Casualty and Surety Company of America, No. 2:12-cv-01047, W.D. Pa.; 2013 U.S. Dist. LEXIS 76353). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%209%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' CHARLOTTE, N.C. - A commercial general liability insurer's lawsuit regarding coverage for a construction defects action is stayed pending the outcome of a South Carolina state court action filed by the parties involved in the construction defects action concerning insurance coverage, a North Carolina federal judge ruled May 23 (Crum & Forster Specialty Insurance Co. v. Tripple J Framing Inc., No. 12-61, W.D. N.C.; 2013 U.S. Dist. LEXIS 73198). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2010%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SAN FRANCISCO - A construction firm's insurance policies did not provide coverage for its damages arising from an underlying Americans With Disabilities Act (ADA) lawsuit, a California federal judge ruled May 16, dismissing breach of contract and bad faith claims related to the insurers' refusal to provide a defense in the ADA action (Pacatte Construction Company Inc. v. AMCO Insurance Co., et al., No. 12-01472, N.D. Calif.; 2013 U.S. Dist. LEXIS 70139). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2011%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' LAS VEGAS - An insurer has a duty to defend an additional insured in an underlying construction defect case and must reimburse for incurred defense costs, a Nevada federal judge ruled May 17, declining to reconsider her decision (Jaynes Corp. v. American Safety Indemnity Co., et al., No. 10-00764, D. Nev.; 2013 U.S. Dist. LEXIS 70443). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2012%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SAN FRANCISCO - A California federal judge on May 21 stayed a coverage action pending the completion of arbitration between insureds and insurers over construction defect claims and ordered the parties to complete arbitration (Swinerton Builders, et al. v. American Home Assurance Co., et al., No. 12-6047, N.D. Calif.; 2013 U.S. Dist. LEXIS 72089). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-5%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2013%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' PHOENIX - Because determination of an apartment complex owner's breach of contract and bad faith allegations against an excess insurer would require him "to consider evidence and facts outside the scope of the allegations in" the owner's counterclaims, an Arizona federal judge on May 29 deemed the claims sufficiently stated to overcome a motion for summary judgment by the insurer (Lexington Insurance Co. v. Scott Homes Multifamily Inc., et al., No. 2:12-cv-02119, D. Ariz.; 2013 U.S. Dist. LEXIS 75319). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%201%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' TAMPA. Fla. - Insurers have a duty to defend their insured in underlying suits alleging property damage as a result of defective Chinese drywall distributed by the insured because the underlying suits do not allege claims that fall within the policies' pollution and health hazard exclusions, a Florida federal judge said May 8 (American Home Assurance Co., et al. v. Arrow Terminals Inc., et al., No. 11-1278, M.D. Fla.; 2013 U.S. Dist. LEXIS 65610). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%202%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' MONTGOMERY, Ala. - Counterclaims against insureds for breach of contract and negligence regarding cabinetry work do not allege an "occurrence" under a business liability insurance policy, the Alabama Supreme Court affirmed May 3 (Shane Traylor Cabinetmaker LLC and Michael Shane Traylor v. American Resources Insurance Company Inc., No. 1110418, Ala. Sup.; 2013 Ala. LEXIS 42). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%203%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' BISMARCK, N.D. - An insured's faulty workmanship might constitute an "occurrence" if the faulty work was "unexpected" and not intended by the insured and the property damage was not anticipated or intentional, so that neither the cause nor the harm was anticipated, intended or expected, a majority of the North Dakota Supreme Court held April 5 (K & L Homes Inc. v. American Family Mutual Insurance Co., No. 20120060, N.D. Sup.; 2013 N.D. LEXIS 61). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%204%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' COLUMBUS, Ohio - Damage to air conditioning units caused by an insured's faulty work does not involve "property damage" caused by an "occurrence" under a commercial general liability insurance policy, an Ohio appeals panel affirmed April 23 (Allied Roofing Inc. v. Western Reserve Group, et al., No. 12AP-575, Ohio App., 10th Dist.; 2013 Ohio App. LEXIS 1521). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%205%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SAN FRANCISCO - A commercial general liability insurer has no duty to defend or indemnify an insured or an additional insured for an underlying construction defect case, a California federal judge ruled April 30, finding that the total residential exclusion precludes coverage for residential projects (Atain Specialty Insurance Co. v. North Bay Waterproofing Inc., et al., No. 12-03339, N.D. Calif.; 2013 U.S. Dist. LEXIS 62493). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%206%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SAN ANTONIO - Underlying allegations against an insured do not unambiguously fall within a commercial general liability insurance policy's exterior insulation and finish system (EIFS) exclusion, a Texas federal judge ruled April 18, denying default judgment to an insurer (Catlin Specialty Insurance Co. v. Montelongo Inc. d/b/a Montelongo Homes & Remodeling, et al., No. 12-711, W.D. Texas; 2013 U.S. Dist. LEXIS 55496). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%207%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SAN FRANCISCO - An additional insured did not breach its duty to cooperate by failing to seek recovery of defense fees and costs incurred in underlying construction defect actions from other insurers, a California federal judge ruled April 8 (Travelers Property Casualty Company of America, et al. v. Centex Homes, et al., No. 11-3638, N.D. Calif.; 2013 U.S. Dist. LEXIS 50460). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%208%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SAN FRANCISCO - A California appeals panel on May 3 affirmed an award of damages to an insurer regarding another insurer's equitable contribution to the defense of an underlying construction defect case; however, the panel reversed and remanded for the limited purpose of determining whether prejudgment interest is proper and, if so, the amount of such interest (Certain London Underwriters Subscribing to Cover Note Nos. 618/A01635001/039, 618/A11635001/067 and 618/A11635001/017 v. Fairmont Specialty Insurance Co., Nos. A133478 & A134412, Calif. App., 1st Dist., Div. 2; 2013 Cal. App. Unpub. LEXIS 3169). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%209%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' INDIANAPOLIS - The economic loss doctrine precludes a subrogated insurer from pursuing a negligence claim against the supplier of a roof system that failed and permitted water damage in a building on a university campus, an Indiana federal judge found April 9 (Citizens Insurance Company of America, as subrogee of Anderson University Inc. v. Johns Manville, No. 11-01263, S.D. Ind.; 2013 U.S. Dist. LEXIS 50755). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2010%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' OAKLAND, Calif. - An additional insured's claims arising from an insurer's denial of coverage for alleged water damage due to negligent construction are time-barred by a one-year suit limitation provision in a policy, a California federal judge ruled April 29 (Ranger Pipelines Inc. v. Lexington Insurance Co., No. 12-5387, N.D. Calif.; 2013 U.S. Dist. LEXIS 60967). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2011%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' NEW YORK - A subcontractor's insurer has no duty to defend or indemnify a primary contractor listed as an additional insured because the contractor failed to provide a timely notice of the underlying construction defect action, a New York justice ruled April 24 (Citnalta Construction Corp. and Aspen Specialty Insurance Co. v. Great American Assurance Co., No. 102953/11, N.Y. Sup., New York Co.; 2013 N.Y. Misc. LEXIS 1672). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2012%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' DALLAS - An insurer's lawsuit seeking a determination on its duty to indemnify its insured against breach of contract and negligence claims is not ripe for resolution, a Texas federal judge ruled April 9, dismissing the case (First Mercury Insurance Co. v. Horizon Roofing Inc., No. 12-03393, N.D. Texas; 2013 U.S. Dist. LEXIS 51301). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2013%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' DENVER - A Colorado federal judge on May 3 declined to remand an insured's coverage action against its insurer regarding the defense of an underlying construction defect case (Cornella Brothers Inc. v. Liberty Mutual Insurance Co. and Velocity Constructors Inc., No. 13-00558, D. Colo.; 2013 U.S. Dist. LEXIS 63682). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2014%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' ORLANDO, Fla. - A commercial general liability insurer's summary judgment motion regarding its duty to defend and indemnify an underlying construction case is premature, a Florida federal judge ruled May 1 (North Pointe Insurance Co. v. Global Roofing & Sheet Metal Inc., et al., No. 12-476, M.D. Fla.; 2013 U.S. Dist. LEXIS 62196). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2015%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' MONTGOMERY, Ala. - An insurance company may pursue its claim against an insured and homeowners for a declaration regarding its duty to defend a construction defect case, an Alabama federal judge ruled May 7; however, the judge dismissed the insurer's claim regarding its duty to indemnify as premature (Pennsylvania National Mutual Casualty Insurance Co. v. Watts Builders LLC, et al., No. 12-994, M.D. Ala.; 2013 U.S. Dist. LEXIS 64813). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2016%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' TACOMA, Wash. - A contractor demonstrated that it suffered harm to its business relationship due to a commercial general liability insurer's bad faith failure to defend it in an underlying lawsuit, a Washington federal judge found April 25, ruling that the contractor would be permitted to seek compensation accordingly (Tim Ryan Construction Inc. v. Burlington Insurance Co., No. 12-05770, W.D. Wash.; 2013 U.S. Dist. LEXIS 59560). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2017%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' BIRMINGHAM, Ala. - An insurer established that it properly inspected property to determine that a loss was not covered and properly relied on a water damage exclusion to deny coverage, an Alabama federal judge ruled April 12, granting summary judgment to the insurer on breach of contract and bad faith claims (Maxine Ware and Elbert Ware v. Nationwide Insurance Co., et al., No. 11-4272, N.D. Ala.; 2013 U.S. Dist. LEXIS 52641). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2018%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' BOSTON - An insured general contractor failed to timely raise a claim under its insurance policy for damages resulting from rainstorms at a construction site, a Massachusetts appeals panel affirmed May 1 (Providence Builders LLC v. Philadelphia Indemnity Insurance Co., No. 12-P-1123, Mass. App.; 2013 Mass. App. Unpub. LEXIS 489). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2019%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' HONOLULU - A Hawaiian appeals court on April 15 affirmed trial court decisions that found that an insurer had no duty to indemnify a building company and another insurer under various policies for a settlement they paid to a hotel owner in relation to mold infestation (Group Builders Inc., et al. v. Admiral Insurance Company, No. 29729, Inter. Hawaii App.; 2013 Haw. App. LEXIS 207). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2020%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' MILWAUKEE - A Wisconsin appeals court on April 30 affirmed a circuit court's decision in favor of an insurer, finding that coverage claims related to a glass company's allegedly negligent caulking work were excluded under its policy (Randal Strauss v. Milwaukee Plate Glass Co., et al., No. 2012AP1778, Wis. App., 3rd Dist.; 2013 Wisc. App. LEXIS 369). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-4%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2021%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SAN JOSE, Calif. - Questions of fact exist as to an insurer's rescission claim regarding potential coverage under a commercial general liability insurance policy for an underlying construction defect judgment against its insureds, a California federal judge ruled April 9 (ProBuilders Specialty Insurance Co. RRG v. Valley Corp. et al., No. 10-05533, N.D. Calif.; 2013 U.S. Dist. LEXIS 51159). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%201%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' ALBANY, N.Y. - A commercial general liability insurer has no duty to indemnify an arbitration award, a New York federal judge ruled March 29, finding that property damage caused by an insured's faulty workmanship does not constitute an "occurrence" (Rosewood Home Builders LLC as successor in interest to Rosewood Home Builders Inc. v. National Fire & Marine Insurance Co., No. 11-1421, N.D. N.Y.; 2013 U.S. Dist. LEXIS 45374). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%202%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' TAMPA, Fla. - A commercial general liability insurer had no duty to indemnify the settlement of an underlying construction defect action, a Florida federal judge ruled March 20, finding that the insurer did not improperly exhaust or allocate its primary policy limits (Amerisure Mutual Insurance Co. v. Summit Contractors Inc. and Crum & Forster Specialty Insurance Co., No. 11-77, M.D. Fla.; 2013 U.S. Dist. LEXIS 38497). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%203%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' LOUISVILLE, Ky. - An insurer owes no duty to indemnify its insured for claims of faulty workmanship, whether caused by the insured or its subcontractors, a Kentucky federal judge ruled March 19 (The Netherlands Insurance Co. v. Jeffries Construction Inc. d/b/a Jeffries Construction Co. Inc., et al., No. 10-754, W.D. Ky.; 2013 U.S. Dist. LEXIS 37409). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%204%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' DENVER - A commercial general liability (CGL) insurer had a duty to defend two construction defect cases, a Colorado federal judge ruled March 31; however, the judge declined to rule on the insurer's duty to indemnify pending a trial (Greystone Construction Inc., et al. v. National Fire & Marine Insurance Co., No. 07-00066, D. Colo.; 2013 U.S. Dist. LEXIS 46707). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%205%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' FLORENCE, S.C. - A commercial general liability insurer has a duty to defend an insured against a construction defect case because there is the potential for coverage, a South Carolina federal judge held March 27, finding that an "impaired property" exclusion does not bar coverage for resulting water damage from the defects (Cincinnati Insurance Co. v. Crossmann Communities of North Carolina Inc., et al., No. 09-1379, D. S.C.; 2013 U.S. Dist. LEXIS 43349). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%206%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' NEW YORK - The Second Circuit U.S. Court of Appeals on March 21 vacated and remanded a ruling that a commercial general liability insurer had no duty to defend or indemnify as to lawsuits for defects in swimming pools installed by an insured and that the insurer was entitled to reimbursement of defense costs previously expended (Scottsdale Insurance Co. v. R.I. Pools Inc., et al., No. 11-3529, 2nd Cir.; 2013 U.S. App. LEXIS 5680). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%207%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' DENVER - An insurer sufficiently alleges third-party claims that another insurer had a potential duty to defend a mutual insured in a construction defect case, a Colorado federal judge held March 12, denying the third-party defendant insurer's motion to dismiss (Bituminous Casualty Corp. v. Hartford Casualty Insurance Co. v. Canal Insurance Co., No. 12-00043, D. Colo.; 2013 U.S. Dist. LEXIS 33907). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%208%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' RICHMOND, Va. - Noting that the Virginia Supreme Court recently ruled that sulfuric gases released by defective Chinese drywall are pollutants, the Fourth Circuit U.S. Court of Appeal on March 20 affirmed that a pollution exclusion precludes coverage for homeowners' claims arising from the installation of Chinese drywall (Evanston Insurance Co. v. Michelle Germano et al., No. 11-2082, 4th Cir.; 2013 U.S. App. LEXIS 5472). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%209%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on March 12 affirmed a portion of a trial court's decision allowing an insurer to assert policy defenses against the builders of an allegedly defective home but reversed a part of the ruling that found that collateral estoppels applied in relation to underlying litigation (American Family Mutual Insurance Co. v. Cara Clancy, et al., No. 11-16270, 9th Cir.; 2013 U.S. App. LEXIS 4926). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2010%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' MINNEAPOLIS - A Minnesota federal judge on March 18 granted summary judgment for an insurer, finding that a policy issued to the builder of a townhouse complex that contained numerous construction defects clearly excluded coverage related to mold growth (MM Home Builders Inc., as assignee of Corporate 4 Insurance Agency v. Endurance American Specialty Insurance Inc., No. No. 12-374, D. Minn.; 2013 U.S. Dist. LEXIS 3658). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2011%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' PHILADELPHIA - Three commercial general liability insurers have no duty to defend claims against an insured for faulty workmanship in a correctional institution, the Third Circuit U.S. Court of Appeals affirmed March 27 (Zurich American Insurance Co. and Northern Insurance Company of New York v. R.M. Shoemaker Co. and County of Monmouth v. Pennsylvania Manufacturers Association Insurance Co., No. 12-2268, 3rd Cir.; 2013 U.S. App. LEXIS 6093). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2012%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' PHILADELPHIA - Allegations of faulty workmanship do not constitute an "occurrence" under a commercial general liability insurance policy, a Pennsylvania federal judge held March 20, finding that an insurer has no duty to defend or indemnify an insured contractor against homeowners' claims (State Auto Property and Casualty Insurance Co. v. Bryan Miller, et al., No. 12-3629, E.D. Pa.; 2013 U.S. Dist. LEXIS 38900). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2013%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' TROY, Mich. - Costs to bring a building into compliance with the municipal code following an insured's alleged failure to properly cover the building's roof during repair work was a covered loss under a commercial general liability insurance policy, a Michigan appeals panel affirmed March 21 (Oak Creek Apartments LLC v. Manuel Garcia d/b/a Manuel Roofing, et al., No. 308256, Mich. App.; 2013 Mich. App. LEXIS 550). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2014%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' PHOENIX - An Arizona federal judge on March 12 declined to dismiss a condominium association's coverage action against an insurer regarding the insurer's duty to defend against property damage claims the association alleged against insured contractors (Pinnacle Pines Community Association v. Lexington Insurance Co., et al., No. 12-8202, D. Ariz.; 2013 U.S. Dist. LEXIS 34103). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2015%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' SAN FRANCISCO - Noting an existing appraisal proceeding between an insurer and its insured, a California federal judge on March 28 dismissed the insurer's coverage action regarding a dispute over costs for water damage to the insured's home (Federal Insurance Co. v. Tom Newby, No. 12-5084, N.D. Calif.; 2013 U.S. Dist. LEXIS 34301). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2016%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' LAS VEGAS - An insurer had a duty to defend construction defect lawsuits against an insured, a Nevada federal judge held March 12, finding that the insurer owes equitable contribution to two other insurers involved in the defense and settlement of the mutual insured's claims (Maryland Casualty Co. and Northern Insurance Company of New York v. American Safety Indemnity Co., No. 10-02001, D. Nev.; 2013 U.S. Dist. LEXIS 34610). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2017%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' LAS VEGAS - A commercial general liability insurer sufficiently asserts claims for equitable contribution and subrogation against another insurer regarding reimbursement of costs incurred in the defense of construction defect cases, a Nevada federal judge ruled April 2 (North American Specialty Insurance Co. and North American Capacity Insurance Co. v. National Fire and Marine Insurance Co., No. 10-01859, D. Nev.; 2013 U.S. Dist. LEXIS 47573). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2018%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' FLORENCE, S.C. - An insurer does not have standing to assert claims for equitable contribution and indemnity against another insurer regarding reimbursement of defense costs incurred over a mutual insured in an underlying construction defect case, a South Carolina federal judge ruled March 27 (Assurance Company of America v. Penn-America Insurance Co., No. 11-03425, D. S.C.; 2013 U.S. Dist. LEXIS 45229). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2019%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' FRANKFORT, Ky. - The economic loss rule precludes an insurer's recovery lawsuit against contractors for costs it paid for faulty electrical work on behalf of its insured, who was contracted separately for a construction project, the Kentucky Court of Appeals affirmed March 15, finding no contractual relationship between the insured and the contractors (Cincinnati Insurance Cos. v. Staggs & Fisher Consulting, No. 2008-CA-002395 & 2009-CA-001123, Ky. App.; 2013 Ky. App. Unpub. LEXIS 227). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2020%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' HONOLULU, Hawaii - A Hawaii federal judge on March 28 affirmed a magistrate judge's order granting an insured's motion for leave to file a second amended counterclaim for bad faith and negligent misrepresentation against its insurers regarding denied coverage for construction defects claims (Illinois National Insurance Co., et al. v. Nordic PLC Construction Inc., No. 11-00515, D. Hawaii; 2013 U.S. Dist. LEXIS 44996). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2021%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' LAS VEGAS - Insureds have failed to establish how damages sought in an underlying class action could be attributable to anything other than professional services that are subject to a policy exclusion, a Nevada federal judge held March 19 (St. Paul Fire And Marine Insurance Co. v. Del Webb Communities Inc., et al., No. 12- 00674, D. Nev.; 2013 U.S. Dist. LEXIS 37903). http://www.lexis.com/research/xlink?canceldest=form&keyenum=25271&keytnum=0&searchtype=get&search=10-3%20Mealey%27s%20Constr.%20Defects%20Ins.%20Rep.%2022%20(2013)&view=full&ORIGINATION_CODE=00144 target='_blank' HOUSTON - A general liability insurance policy excludes coverage for damages sustained in the construction of condominiums, a Texas federal judge ruled March 21, granting summary judgment to the general liability insurer in an insurer's subrogation lawsuit (American Empire Surplus Lines Insurance Co. v. National Fire Insurance Company of Hartford, et al., No. 12-2313, S.D. Texas; 2013 U.S. Dist. LEXIS 39944).