{"id":902210,"date":"2024-02-01T15:31:48","date_gmt":"2024-02-01T22:31:48","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=902210"},"modified":"2024-02-01T15:31:56","modified_gmt":"2024-02-01T22:31:56","slug":"faulty-workmanship-insurer-has-duty-to-defend","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/faulty-workmanship-insurer-has-duty-to-defend\/","title":{"rendered":"Insurer Has Duty to Defend Faulty Workmanship Claim"},"content":{"rendered":"\n<p>Tred R. Eyerly | <a href=\"https:\/\/www.insurancelawhawaii.com\/insurance_law_hawaii\/2023\/12\/insurer-has-duty-to-defend-faulty-workmanship-claim.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Insurance Law Hawaii<\/a><\/p>\n\n\n\n<p>\u00a0 \u00a0 The magistrate judge recommended a determination that the insurer owed a defense to the subcontractor sued for <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/faulty-workmanship-insurer-defend-allegations\/\">faulty workmanship<\/a>.\u00a0Hanover Lloyds Ins Co. v. Donegal Mut. Ins. Co., 2023 U.S. Dist. LEXIS 180877 (W.D. Texas Oct. 5, 2023).\u00a0<\/p>\n\n\n\n<p>&nbsp; &nbsp; Poe Investments, Ltd. entered into &nbsp;an agreement with Jordan Foster Construction, LLC for construction of an auto sales and service facility (&#8220;Facility&#8221;). Jordan hired multiple subcontractors, including Texas Electrical Contractors, LLC (&#8220;TEC&#8221;). &nbsp;Subsequently, Poe sold the Facility to 6330 Montana, LLC (&#8220;Montana&#8221;).<\/p>\n\n\n\n<p>&nbsp; &nbsp; Montana filed suit against Jordan for breach of express warranties, breach of contract, and negligence. Jordon filed a third-party complaint against its subcontractors, including TEC. Jordan alleged that TEC provided &#8220;defective and negligent construction work&#8221; while carrying out the provision and installation of electrical and fire alarm systems at the Facility.&nbsp;<\/p>\n\n\n\n<p>&nbsp; &nbsp; TEC notified its three commercial general liability carriers. Hanover and United Fire &amp; Casualty Company defended TEC. The third carrier, Mountain States Insurance Group (&#8220;Mountain&#8221;), declined to defend. Mediation took place in the underlying case, and Hanover and Untied Fire paid $100,000 to resolve the claims against TEC. Mountain was invited to attend the mediation but declined.<\/p>\n\n\n\n<p>&nbsp; &nbsp; Hanover and United Fire sued Mountain, seeking contribution for TEC&#8217;s defense costs. Cross-motions for summary judgment were filed.&nbsp;<\/p>\n\n\n\n<p>&nbsp; &nbsp; Mountain argued there was no &#8220;occurrence&#8221; during its policy period because all of the damage had already occurred by the time of the initiation of its policy. Plaintiffs argued that Mountain&#8217;s policy did not require an &#8220;occurrence&#8221; during the policy period but rather just property damage during the policy period. The court agreed that allegations of property damage caused by TEC&#8217;s work, such as broken lighting fixtures and lights failing, could be construed to alleged damage potentially occurring during the policy period of at least one of Mountain&#8217;s policies. Further, property damage alleged to be the result of TEC&#8217;s negligent behavior, but not foreseen or expected to cause damage, meant there was an occurrence. Mountain&#8217;s duty to defend was therefore triggered.&nbsp;<\/p>\n\n\n\n<p>&nbsp; &nbsp; Mountain argued that the &#8220;impaired&#8221; property exclusion barred coverage. The provision excluded coverage for damage to third-party property that incorporated the insured&#8217;s product when the third-party property was functional upon repairing or replacing the insured&#8217;s product. It also excluded coverage for damages to property, or for the loss of its use, if the property was not physically injured and the damages or loss of use arose out of the insured&#8217;s defective product. If the property was damaged and could not be fixed simply by repair or replacement of the defective property, then it was not &#8220;impaired property.&#8221;<\/p>\n\n\n\n<p>&nbsp; &nbsp; Here, the exclusion did not apply because Mountain had not asserted that repairing or replacing TEC&#8217;s work would restore the rest of the property to use. The Facility could not be considered either impaired property or property that had not been physically injured.&nbsp;<\/p>\n\n\n\n<p>\u00a0 \u00a0 The court found that Mountain was liable for one-third of the costs of TEC&#8217;s defense. Plaintiffs motion for summary judgment on indemnity was denied, however, because there were genuine issues of material fact regarding what work TEC was responsible for, what property damage it may have caused, and when such damage, if any, occurred.\u00a0<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tred R. Eyerly | Insurance Law Hawaii \u00a0 \u00a0 The magistrate judge recommended a determination that the insurer owed a defense to the subcontractor sued for faulty workmanship.\u00a0Hanover Lloyds Ins Co. v. Donegal Mut. Ins. Co., 2023 U.S. Dist. LEXIS 180877 (W.D. Texas Oct. 5, 2023).\u00a0 &nbsp; &nbsp; Poe Investments, Ltd. entered into &nbsp;an agreement&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/faulty-workmanship-insurer-has-duty-to-defend\/\">Continue reading <span class=\"screen-reader-text\">Insurer Has Duty to Defend Faulty Workmanship Claim<\/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":[10,11092,10721],"tags":[9895,57,68,22],"class_list":["post-902210","post","type-post","status-publish","format-standard","hentry","category-duty-to-defend","category-faulty-workmanship","category-insurance","tag-advise-consult","tag-duty-to-defend-2","tag-faulty-workmanship","tag-insurance","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Insurer Has Duty to Defend Faulty Workmanship Claim - Advise &amp; 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