Construction Defects

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   In Group Builders, Inc. v. Admiral Ins. Co., 123 Haw. 142, 231 P.3d 67 (Haw. Ct. App. 2010) [decision here], the Hawaii Intermediate Court of Appeals determined that construction defects did not arise from an occurrence and therefore were not covered under a CGL policy.  [See our Group Builders’ post here].  Bills were recently…

   In a prior post, we noted the Indiana Supreme Court held that the CGL policy covers damage to a home structure resulting from shoddy subcontractor work unless the subcontractor work was intentionally faulty.  See Sheehan Constr. Co. v. Cont'l Cas. Co., 935 N.E. 2d 160 (Ind. 2010).  In a subsequent construction defect…

   Are construction defects that allegedly result in water intrusion and property damage over several policy periods the result of one occurrence or multiple occurrences?  This was the issue under consideration in Bayley Constr. v. Am Guar. and Liab. Ins. Co., 2010 U.S. Dist. LEXIS 110767 (W.D. Wash. Oct. 15, 2010).

   Bayley Construction…

   The Indiana Supreme Court has now weighed in on liability coverage for construction defects and has decided faulty workmanship with unforeseen consequences is an occurrence.  See Sheehan Construc. Co. Inc. v. Continental Cas. Co., 2010 Ind. LEXIS 557 (Ind. Sept. 30, 2010). 

   Sheehan was the general contractor for construction of homes in a residential subdivision…

   Sorting out whether the contractor had coverage for alleged construction defects under the subcontractor's policies was the issue in Travelers Cas. and Sur. Co. v. Dormitory Auth., State of New York, 2010 U.S. Dist. LEXIS 79024 (S.D. N.Y. July 30, 2010).

   Trataros Construction, Inc. was the general contractor on the project.  Trataros contracted…

   The insurer defended the underlying construction defect case under a reservation of rights, but moved for summary judgment in the coverage action on its duty to indemnify.  Mid-Continent Caus. Co. v. Frank Casserino Constr., Inc., 2010 U.S. Dist. LEXIS 59363 (M.D. Fla. June 16, 2010). 

   The general contractor subcontracted with the insured to perform building…

   In a coverage dispute between two insurers, the court considered the impact of an endorsement excluding coverage for any loss that first manifested before the term of the policy.  See Pa. Gen. Ins. Co. v. Am. Safety Indemn. Co., 2010 Cal. App. LEXIS 981 (Cal. Ct. App. June 28, 2010).

   Whitacre Construction, a…

   As we noted in a prior post, the Hawaii Intermediate Court of Appeals recently decided that construction defects do not constitute an occurrence under a CGL policy.  Citing the same Colorado Court of Appeals case that the Hawaii ICA found persuasive, the 10th Circuit certified a similar issue to the Colorado Supreme Court in Greystone …

   Ever since the Ninth Circuit made an Erie guess in Burlington Ins. Co. v. Oceanic Design & Constr. Inc., 383 F.3d 940 (9th Cir. 2004), that the Hawai’i appellate courts would find that construction defects do not constitute an occurrence under a CGL policy, coverage practitioners have waited for an answer.  Today, the Hawai`i Intermediate Court of Appeals…