Court Upholds Anti-Assignment ProvisionFebruary 2013 | Category: News
WASCO v. Bituminous (Ill. App. (1st) 2013)
In WASCO v. Bituminous, WASCO sought coverage under Bituminous policies issued to Palm Oil and PORI International, arguing that the policies were transferred to WASCO or “assigned” to WASCO, or that WASCO was the corporate successor of the named insureds, and therefore entitled to the coverage afforded by the policies. When Bituminous declined to defend WASCO for an underlying environmental claim, WASCO sued Bituminous in Illinois state court, alleging breach of the duty to defend and bad faith claims handling practices.
Faulty Workmanship That Damages Other Work Is Potentially Covered In ColoradoJanuary 2013 | Category: News
Mt. Hawley Ins. Co. v. Creek Side at Parker Homeowners Ass'n, Inc., 2013 WL 104795 (D. Colo. Jan. 8, 2013)
On January 8, 2013, the U.S. District Court for the District of Colorado held that, when a subcontractor’s faulty workmanship causes damage to other, non-faulty, parts of a construction project, there may be an “occurrence” under a general liability policy. (This case reaches the opposite conclusion of a Sixth Circuit case that came down the day before, which we have summarized here). In this Colorado decision, the district court found that, although there may have been an “occurrence,” the policy nevertheless excluded coverage for both construction defects that take place during and after a construction project.
Faulty Workmanship That Damages Other Work Is Not Covered In KentuckyJanuary 2013 | Category: News
McBride v. Acuity, --- F.3d ---, 2013 WL 69358 (6th Cir. Jan. 7, 2013) (applying Kentucky law)
On January 7, 2013, the U.S. Court of Appeals for the 6th Circuit applied Kentucky law to find that faulty workmanship of a subcontractor did not qualify as an “occurrence” even though the subcontractor’s faulty workmanship had caused damage to other, non-faulty, parts of the project. (This case reaches the opposite conclusion of a Colorado decision that came down the day after, which we have summarized here) The Sixth Circuit refused to follow case law from other jurisdictions holding that an “occurrence” takes place when allegedly defective work on one part of a construction project causes defects to another part of the same project.
Umbrella Insurer Must Indemnify Primary Over $6 MillionDecember 2012 | Category: News
On September 24, 2012, a California appellate court ruled that a housing discrimination claim was not covered by the personal injury definition of a primary policy, but that it was covered by the personal injury definition of the umbrella policy. Therefore, after the underlying dispute was over, the umbrella insurer was ordered to reimburse the primary for over $5.2 million in defense costs and $1 million in indemnity.
Indiana Court Tells Insurer to Pound SandAugust 2012 | Category: News
In an unusual decision employing contorted contractual construction, an Indiana appellate court on August 28, 2012 explained that an insured that intentionally left 100,000 tons of sand on property it once leased, has caused a “personal injury” to the land and that this “personal injury” is covered by the insured’s general liability insurance. The concurring opinion found coverage was owed because the standard “occurrence” definition in the policy creates an ambiguity as to whether the policy requires the cause of the injuries to be “accidental.” or whether the policy requires that the injuries themselves to be “accidental.” While this decision may encourage policyholder counsel to use the “personal injury” coverage grant as a path to finding coverage for environmental property damage, the reasoning of the decision is likely to hold little precedential value outside the facts of the particular case and little sway for courts outside of Indiana.
Federal Court Rules in Favor Of Client on IndemnityMay 2012 | Category: News
Clark v. Union Pacific Railroad (E.D. Ark. 2012)
On June 1, 2012, after a three-day bench trial in the U.S. District Court for the Eastern District of Arkansas, a federal judge ruled that BatesCarey LLP's client, Gunderson Rail Services, did not owe contractual indemnity to Union Pacific Railroad for Union Pacific's 50% of liability in a multi-million suit under the Federal Employers Liability Act. Joseph P. Pozen tried the case for Gunderson.
Business Loss, Even by Any Other Name, Still Isn't CoveredApril 2012 | Category: News
One of the seminal no “loss” cases is Level 3 Communications, Inc. v. Federal Ins. Co., 272 F.3d 908 (7th Cir. 2001), penned by the esteemed jurist Judge Richard Posner. This past month, Judge Posner, writing for the Seventh Circuit, issued another no “loss” decision, finding in favor of the insurer. Ryerson Inc. v. Federal Ins. Co., --- F.3d ----, 2012 WL 1216282 (7th Cir. Apr. 12, 2012) (Illinois law).
Three Courts Agree, Construction Defects Not Covered Under CGLMarch 2012 | Category: News
We thought it was interesting to note three recent cases in three different jurisdictions, each of which concluded—on summary adjudication—that there is no coverage under a CGL policy for construction defect claims.
State Statutes Redefine “Occurrence” To Create Defect CoverageDecember 2011 | Category: News
In many states, courts have found that the faulty workmanship of a construction contractor that damages the contractor’s own work is not an accident and, therefore, not an “occurrence.” General Sec. Indem. Co. of Arizona v. Mountain States Mut. Cas. Co., 205 P.3d 529 (Colo.Ct.App. 2009); Auto-Owners Ins. Co. v. Home Pride Companies, Inc., 268 Neb. 528, 684 N.W.2d 571 (Neb. 2004) (faulty workmanship, standing alone, is not covered under a standard CGL policy); Oak Crest Const. Co. v. Austin Mut. Ins. Co., 329 Or. 620, 998 P.2d 1254 (Or. 2000) (no occurrence where insured sought cost of correcting subcontractor's deficient work); Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 589 Pa. 317, 908 A.2d 888 (Pa. 2006).
Getting Out From Under The “Action Over”December 2010 | Category: News
Construction companies generally do not expect to be targets of tort liability for the injuries of their employees. They are protected by workers compensation laws against such claims. It follows then that general liability insurance policies do not expect to insure the tort injuries of the insured’s employees, because the insured should have no tort liability for its employees’ injuries. However, a quirk of the various contracts that are entered into between construction companies does allow for an employer to find itself paying for the tort injuries of its employees, in which case the employer’s liability insurer may foot the bill. This strange quirk where an employee’s damages are ultimately paid by his employer and the employer’s insurer are known as “action over claims.” This article explains what an “action over” claim is, and what steps insurers are taking to avoid insuring such claims.