{"id":899243,"date":"2021-10-14T15:42:31","date_gmt":"2021-10-14T21:42:31","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=899243"},"modified":"2021-10-14T15:42:35","modified_gmt":"2021-10-14T21:42:35","slug":"subcontractors-defective-work","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/subcontractors-defective-work\/","title":{"rendered":"Caution To Contractors \u2013 How Your Subcontractor’s Defective Work Can Cost You In The Eleventh Circuit"},"content":{"rendered":"\n

Hannah-Kate Gosch | Freeman Mathis & Gary<\/a><\/p>\n\n\n\n

Are general contractors covered when the cost of repairing or removing a subcontractor’s defective work<\/a> results in the loss of use of the tangible property which is not itself physically damaged?\u00a0<\/p>\n\n\n\n

The United States Court of Appeals for the Eleventh Circuit recently addressed this issue in Tricon Development of Brevard, Inc. v. Nautilus Insurance Company<\/em>, No. 21-11199, 2021 U.S. App. LEXIS 27317 (Sept. 10, 2021). The insurance coverage dispute arose in Florida, where previous case law established that damage caused by faulty workmanship constitutes “property damage,” but the cost of removing or repairing faulty work does not. Amerisure Mutual Insurance Company v. Auchter Company<\/em>, 673 F.3d 1294, 1306-07 (11th Cir. 2012) (“Amerisure<\/em>“).  <\/p>\n\n\n\n

In Tricon<\/em>, Tricon Development of Brevard (“Tricon”) was hired to serve as general contractor for a condominium project in Florida. Id<\/em>. at *1. In turn, Tricon hired a subcontractor to fabricate and install metal railings for the condo project. The subcontractor was insured by Nautilus through two commercial general liability (“CGL”) insurance policies, which covered “property damage” as defined under the policy. Id<\/em>. at *1-2. <\/p>\n\n\n\n

The railings fabricated and installed by the subcontractor were later revealed to have defects and damage, were improperly installed, and did not meet the project’s specifications. Id<\/em>. at *3. After Tricon hired and paid a new subcontractor to remove the original subcontractor’s railings and fabricate and install new railings that met the project’s specifications, Tricon filed an insurance claim with Nautilus to cover those costs. Id<\/em>. Nautilus denied the claim, and Tricon sued for breach of contract in Florida state court. The district court granted Nautilus’s motion for summary judgment, and Tricon appealed. Id<\/em>.  <\/p>\n\n\n\n

In its decision, the Eleventh Circuit Court of Appeals relied heavily upon Amerisure<\/em>, which involved a GCL policy with a products-completed operations hazard coverage provision, like the policy at issue in Tricon<\/em>. Id<\/em>. at *4. In American Mutual<\/em>, the court applied Florida law and held that “there [was] no coverage if there [was] no damage beyond the faulty workmanship, i.e., unless the faulty workmanship has damaged some otherwise non-defective component of the project.” Id<\/em>. at 1306.  <\/p>\n\n\n\n

Based on American Mutual<\/em> and prior Florida case law, the Tricon<\/em> court ruled that because Tricon did not allege that the subcontractor’s faulty work damaged otherwise non-defective components of the project, the costs incurred to remove the original subcontractor’s railings and the fabrication and installation of new railings did not constitute “property damage” covered under the GCL policy’s definition of “property damage.” Tricon, <\/em> at *5-6. While this ruling is based on Florida case law regarding GCL policies and is limited in scope to Florida contracts, the underlying analysis and the implications may be far-reaching, especially in the Eleventh Circuit. <\/p>\n","protected":false},"excerpt":{"rendered":"

Hannah-Kate Gosch | Freeman Mathis & Gary Are general contractors covered when the cost of repairing or removing a subcontractor’s defective work results in the loss of use of the tangible property which is not itself physically damaged?\u00a0 The United States Court of Appeals for the Eleventh Circuit recently addressed this issue in Tricon Development of… Continue reading Caution To Contractors \u2013 How Your Subcontractor’s Defective Work Can Cost You In The Eleventh Circuit<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[4],"tags":[9895,19,11558],"class_list":["post-899243","post","type-post","status-publish","format-standard","hentry","category-construction-defects","tag-advise-consult","tag-construction-defects-2","tag-subcontractors-defective-work","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nCaution To Contractors \u2013 How Your Subcontractor's Defective Work Can Cost You In The Eleventh Circuit - 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