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Griggs Rd., L.P. v. Selective Way Ins. Co. of Am.

United States District Court for the Middle District of Pennsylvania

February 21, 2019, Decided; February 21, 2019, Filed

No. 4:17-CV-00214

Opinion

 [*801]  MEMORANDUM OPINION

Plaintiffs Griggs Road, L.P. and Blaise Alexander ("Plaintiffs") and Defendant Selective Way Insurance Company of America ("Selective") filed cross-motions for summary judgment asking this Court to determine whether, under Plaintiffs' all-risk insurance policy, an ensuing loss clause restores coverage to Plaintiffs' claim despite a faulty workmanship exclusion. I conclude that it does, and accordingly, Plaintiffs' motion will be granted and Selective's [**2]  motion will be denied.

I. BACKGROUND1

Facts giving rise to the current insurance coverage dispute occurred during construction of Plaintiff Blaise Alexander's home. D'Alessio Inspired Architectural Designs (hereinafter, "stucco subcontractor") was hired to install stucco on the home's exterior walls and affix pre-cast concrete trim pieces to the home's soffits.

During installation, the stucco subcontractor committed certain errors that rendered the stucco installation worthless. The stucco had to be removed and reapplied. Similarly, pieces of pre-cast concrete trim had fallen from the soffits upon which they were affixed. The pre-cast trim pieces also had to be reinstalled.

The stucco subcontractor's installation also damaged the home's walls and soffits. The walls' special insulating properties were compromised and the soffits themselves had to be repaired. Plaintiffs estimate that their remediation expenses totaled approximately $750,000.2

Plaintiffs, who were insured by Selective under a builders' risk insurance policy, submitted a claim seeking indemnification for their remediation expenses. Selective denied coverage based on the policy's exclusion for defective workmanship and faulty [**3]  materials.

Plaintiffs filed a two-count complaint against Selective in the Court of Common Pleas of Lycoming County, Pennsylvania.3 In Count I, Plaintiffs seek a declaration that their claim is covered by the policy. In Count II, Plaintiffs allege that, by failing to indemnify Plaintiffs, Selective breached the insurance contract. Selective removed the case to the United States District  [*802]  Court for the Middle District of Pennsylvania4 and filed a counterclaim seeking to clarify its rights under the insurance policy.5

Currently pending before the Court are Plaintiffs and Selective's cross-motions for summary judgment.6 Plaintiffs seek a declaration that their claim is covered, while Selective seeks a declaration that it is not. Plaintiffs also seek summary judgment as to liability on their breach of contract claim.

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368 F. Supp. 3d 799 *; 2019 U.S. Dist. LEXIS 27170 **; 2019 WL 764224

GRIGGS ROAD, L.P., et al., Plaintiffs, v. SELECTIVE WAY INSURANCE COMPANY OF AMERICA, Defendant.

Subsequent History: Reconsideration denied by, Request denied by Griggs Rd. v. Selective Way Ins. Co. of Am., 2019 U.S. Dist. LEXIS 135893 (M.D. Pa., May 22, 2019)

Prior History: Griggs Rd., L.P. v. Selective Way Ins. Co. of Am., 2017 U.S. Dist. LEXIS 94034 (M.D. Pa., June 19, 2017)

CORE TERMS

coverage, ensuing loss, insurer, faulty workmanship, losses, ambiguous, summary judgment, stucco, cause of loss, pre-cast, trim, insurance policy, soffits, non-excluded, physical loss, all-risk, damages, faulty, walls, exclude coverage, subcontractor's, installation, construe, restores, insurance contract interpretation, interpreting, principles, pieces, words

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, Genuine Disputes, Evidence, Inferences & Presumptions, Inferences, Materiality of Facts, Burdens of Proof, Nonmovant Persuasion & Proof, Movant Persuasion & Proof, Insurance Law, Property Insurance, Coverage, All Risks, Claim, Contract & Practice Issues, Policy Interpretation, Exclusions, Types of Insurance, Preliminary Considerations, Jurisdiction, Diversity Jurisdiction, Judicial Review, Ambiguous Terms, Coverage Favored, Plain Language, Policy Interpretation, Question of Law, Contracts Law, Contract Interpretation, Ambiguities & Contra Proferentem, Contract Interpretation, Ambiguous Terms, Ordinary & Usual Meanings, Construction Against Insurers, Reasonable Expectations, Parol Evidence, Governments, Courts, Judicial Precedent, Federal & State Interrelationships, Ensuing Loss Provisions, Exclusions, Faulty Workmanship, Adhesion Contracts