FAIRFIELD CONNECTICUT BUILDING EXPERT
DIRECTORY AND CAPABILITIES

Excess-Escape Other Insurance Provision Unenforceable to Avoid Defense Cost Contribution Despite Placement in Policy’s Coverage Grant

April 20, 2016 — Christopher Kendrick & Valerie A. Moore - Haight Brown & Bonesteel, LLP
In Certain Underwriters at Lloyds, London v. Arch Specialty Ins. Co. (No. C072500; filed 4/11/16), a California appeals court found an “other insurance” provision unenforceable to excuse defense contribution between successive primary insurers, regardless of the fact that the limiting language was contained in the policy’s coverage grant. Certain Underwriters and Arch each insured Framecon over successive policy periods. Framecon was sued by a developer in a series of construction defect actions, and tendered to both insurers. Underwriters agreed to defend under a reservation of rights but Arch declined, citing the wording of its insuring agreement, which stated: Reprinted courtesy of Christopher Kendrick, Haight Brown & Bonesteel LLP and Valerie A. Moore, Haight Brown & Bonesteel LLP Mr. Kendrick may be contacted at ckendrick@hbblaw.com Ms. Moore may be contacted at vmoore@hbblaw.com Read the court decision
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Illinois Supreme Court Holds that Constructions Defects May Constitute “Property Damage” Caused By An “Occurrence” Under Standard CGL Policy, Overruling Prior Appellate Court Precedent

January 08, 2024 — Jason Taylor - Traub Lieberman Insurance Law Blog
On November 30, 2023, the Illinois Supreme Court issued an opinion that overturned precedent in Illinois regarding whether faulty workmanship that only caused damage to the insured’s own work constituted “property damage” caused by an “occurrence” under Illinois law. In Acuity v. M/I Homes of Chicago, LLC, 2023 IL 129087, the Illinois Supreme Court considered whether Acuity, a mutual insurance company, had a duty to defend its additional insured, M/I Homes of Chicago, LLC (M/I Homes), under a subcontractor’s commercial general liability (CGL) policy in connection with an underlying lawsuit brought by a townhome owners’ association for breach of contract and breach of an implied warranty of habitability. The Cook County Circuit Court granted summary judgment in favor of Acuity finding no duty to defend because the underlying complaint did not allege “property damage” caused by an “occurrence” under the initial grant of coverage of the insurance policy. The appellate court reversed and remanded, finding that Acuity owed M/I Homes a duty to defend. The Illinois Supreme Court affirmed, in part, holding construction defects to the general contractor’s own work may constitute “property damage” caused by an “occurrence” under the standard CGL Policy. This is significant as it overrules prior Illinois precedent finding that repair or replacement of the insured’s defective work does not satisfy the initial grant of coverage of a CGL Policy. By way of background, the underlying litigation stems from alleged construction defects in a residential townhome development in the village of Hanover Park, Illinois. The townhome owners’ association, through its board of directors (the Association) subsequently filed an action on behalf of the townhome owners for breach of contract and breach of the implied warranty of habitability against M/I Homes as the general contractor and successor developer/seller of the townhomes. The Association alleged that M/I Homes’ subcontractors caused construction defects by using defective materials, conducting faulty workmanship, and failing to comply with applicable building codes. As a result, “[t]he [d]efects caused physical injury to the [t]ownhomes (i.e. altered the exterior’s appearance, shape, color or other material dimension) after construction of the [t]ownhome[ ] was completed from repeated exposure to substantially the same general conditions.” The defects included “leakage and/or uncontrolled water and/or moisture in locations in the buildings where it was not intended or expected.” The Association alleged that the “[d]efects have caused substantial damage to the [t]ownhomes and damage to other property.” Read the court decision
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Reprinted courtesy of Jason Taylor, Traub Lieberman
Mr. Taylor may be contacted at jtaylor@tlsslaw.com

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Mediation Scheduled for Singer's Construction Defect Claims

February 11, 2013 — CDJ STAFF
A judge has scheduled mediation and trial over the claims of Rihanna that her Beverley Hills home suffers from construction defects. The singer claims that the previous owners, Adriana and Heather Rudomin, did not disclose construction defects which lead to flooding from water leaks in January 2010. The Rudomins did not appear at the February 7th hearing, and the judge fined them $500. They will be required to explain their absence on March 12. The mediation will begin on May 7. The trial has been scheduled for February 24, 2014, and is expected to last three weeks. Read the court decision
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Business Risk Exclusions Do Not Preclude Coverage

November 13, 2013 — Tred Eyerly — Insurance Law Hawaii
The court rejected the insurer's arguments that the business risk exclusions barred coverage for a contractor. Gen. Cas. Co. of Wisconsin v. Five Star Bldg. Corp., 2013 U.S. Dist. LEXIS 134122 (D. Mass. Sept. 19, 2013). Five Star was hired by the University of Massachusetts to upgrade the ventilation (HVAC) system on a portion of a building. The large majority of the work involved work in the interior of the building, but a small portion required installation of duct work and supports on top of the roof of the complex. Five Star also penetrated the roof at numerous locations to install supports for duct work and other rooftop structures for the ventilation system. Other subcontractors then secured supports to the concrete roof deck and installed permanent patches where Five Star had penetrated the roofing system. On same days, Five Star could not accomplish the process in a single day after penetrating the roof. It would install temporary patches until the next day. This was the only work on the roof performed by Five Star. Read the court decision
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Reprinted courtesy of Tred Eyerly
Tred Eyerly can be contacted at te@hawaiilawyer.com

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Nevada Senate Minority Leader Gets Construction Defect Bill to Committee

April 03, 2013 — CDJ STAFF
The Las Vegas Sun reports that Michael Roberson, the lead Republican in the Nevada Senate, managed to get his construction defect reform bill scheduled for a hearing. Previously, the Senate Democrats had determined that all bills pertaining to construction defect legislation would be heard by the Senate Judiciary Committee. However, Roberson managed to convince Kelvin Atkinson, the chair of the Senate Commerce and Labor Committee, to add his bill to the text a mortgage lending measure under consideration by that committee. Roberson had previously submitted his bill to the Judiciary Committee. Senator Tick Segerblom has not scheduled the bill for a hearing and is reported to be an opponent of the bill. While Roberson characterizes the bill as making things better for homebuilders, Segerblom sees it as making things worse for homeowners. “That’s not going to happen,” Seberblom told the Las Vegas Sun. Although the senate voted to send the bill to the Commerce and Labor committee, it still may not get a hearing. Segerblom said he did not know if the bill would be heard in his committee. “We’ve got 60 or more bills to hear and if there’s nothing new in there to change the world, I don’t know why we would hear it.” Atkinson said he has “no appetite to hear the bill.” Read the court decision
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Century Communities Acquires Dunhill Homes Las Vegas Operations

April 08, 2014 — Beverley BevenFlorez-CDJ STAFF
According to Big Builder, “Colorado-based Century Communities” has acquired “the Las Vegas operations team and 1,849 lots of Dunhill Homes.” This brings Century’s “total land position of owned and controlled lots to 10,095, an increase of 21% since the end of 2013.” “More than the homes and land inventory, this acquisition allows us to add an experienced operations team, with a reputation of delivering quality homes in well-located communities,” stated Robert Francescon and Dale Francescon, Co-Chief Executive Officers of Century Communities, in a statement as quoted by Big Builder. “Additionally, Las Vegas remains a land constrained market, and we are now uniquely positioned within communities that would be very difficult to replicate today, with land inventory to drive future growth.” Read the court decision
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Foundation Differences Across the U.S.

October 15, 2014 — Beverley BevenFlorez-CDJ STAFF
The National Association of Home Builders’ Eye on Housing analyzed data from the Survey of Construction (SOC) to demonstrate the differences in foundations built across the nation. For instance, “about 30 percent of new single-family homes started in 2013 have a full or partial basement, 54 percent are built on slabs, and 15 percent have a crawl space. The remaining share, including homes built on stilts or pilings, accounted for about 1 percent of homes started in 2013.” Climate is the deciding factor in what type of foundations are used, Eye on Housing reported. “In colder regions where codes require foundations to be deep the marginal cost of providing a full or partial basement is not that great. So basements are the most common type of foundation in the colder climate divisions.” The warm climate area of the West South Central division are primarily built on slabs. However, “the other two divisions that make up the South region – the East South Central and South Atlantic –are still largely built on slabs but crawl spaces are also common.” Read the court decision
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Burden to Prove Exception to Exclusion Falls on Insured

April 19, 2022 — Tred R. Eyerly - Insurance Law Hawaii
In a dispute between two insurers, the Ninth Circuit relied upon Nevada law in finding that the burden of proving that an exception to the exclusion applies was on the insured. Zurich Am. Ins. Co. v. Ironshore Specialty Ins. Co., 2022 U.S. App. LEXIS 1626 (9th Cir. Jan. 20, 2022). Ironshore insured seven subcontractors. The policy included an exclusion providing there was no coverage for any property damage for the subcontractors' for "work performed prior to the policy inception." An exception to the exclusion provided that the exclusion did not apply to property damage that was "sudden and accidental and takes place within the policy period." The seven subcontractors were sued for work they had performed. Zurich defended and indemnified the subcontractors. Zurich then sued Ironshore seeking contribution and indemnification for defense and settlement costs. The parties stipulated that all construction work at issue had been completed before the inception of Ironshore's policy and that none of the complaints against the subcontractors alleged that sudden and accidental damage had occurred after the inception of Ironshore's policy. Read the court decision
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Reprinted courtesy of Tred R. Eyerly, Damon Key Leong Kupchak Hastert
Mr. Eyerly may be contacted at te@hawaiilawyer.com

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