Construction Defect

Case Study

• Grande North Window Replacements

  In 2021, a window supplier sued for coverage under an OCIP policy to recover the $2.5 million it paid to replace more than 2,000 windows at a condo tower in San Diego, California. The underlying window claims concerned dripping sealant, which created visual obstructions. It was undisputed that the sealant only damaged the windows and that faulty installation did not cause the sealant to drip. The court granted summary judgment in favor of the insurer, finding no coverage under the OCIP policy.

• Obtained summary judgment holding that CGL coverage, part of client's primary OCIP policy, provided only a single $5 million completed-operations aggregate liability limit, regardless how projects sustained damage; defeated argument that $5 million aggregate limit was owed for each of 71 scheduled projects.
• Collaborated with defense counsel in a California arbitration seeking indemnity for OSHA/criminal penalties and fees against the insured and alleging the robotic palletizing system purchased from the insured, which was involved in the death of a worker, was defective. The panel's decision was in favor of the insurer, holding that the intentional conduct of the claimant's employees in deliberately circumventing the machine's safety features barred indemnity.
• Negotiated settlement of claims involving multiple construction defects at affordable housing complex in Colorado, which did not require client to make payments; only the other involved insurers paid.
• Obtained summary judgment regarding allocation in Colorado construction defect case, leading to favorable settlement for excess insurer.
• Obtained partial summary judgment on late-notice argument in Colorado construction-defect case, leading to favorable settlement for excess insurer.
• Negotiated favorable settlement for excess insurer after obtaining partial summary judgment as to allocation of construction defect settlement under Colorado law.
• Intervened in liability case and successfully resolved coverage issues relating to allegations against roofer for defective work and water intrusion at eight multi-unit condominiums; determining whether the claims involved property damage and the specific years when the alleged damage occurred.
• Obtained favorable settlement of Missouri construction-defect claim arising out of insured's allegedly faulty repairs and involving complex issues of trigger and the application of various exclusions.
• Successfully resolved direct action by nationwide retailer and its general contractor, against insurer client and its insured, seeking damages and CGL coverage for the cost of repairs and replacement, and for increased construction costs, resulting from insured's alleged defective performance of insulation and fireproofing operations following Hurricane Katrina.
• Negotiated favorable settlement relating to building-envelope defects at condominium development in Florida.
• Before discovery, obtained summary judgment in construction-defect coverage litigation holding that insurer had no duty to defend or indemnify, because the lone alleged damage was from the rip-and-tear of work to get access to insured's non-conforming work.
• Negotiated several settlements involving primary and excess carriers in insurance coverage litigation over construction defects at a large manufacturing plant.
• Obtained summary judgment for insurer in lawsuit for indemnity and contribution involving the interpretation of manuscript policy language addressing the qualification of additional insureds; secured affirmation of judgment on appeal.
• Secured multiple favorable summary judgment rulings in a complex coverage action involving insurers and a developer/general contractor, arising out of underlying construction defect claims, resulting in a significant recovery to the client.
• Analyzed coverage under OCIP policy for alleged construction defects at various ski resort properties.
• Resolved Illinois litigation involving "additional insured" and contractual liability disputes to minimize exposure for a judgment in excess of policy limits.
• Secured summary judgment that umbrella insurer owed no obligation to indemnify insured for more than $10 million in costs to replace non-compliant framing lumber installed at multiple apartment developments.
• Successfully negotiated dismissal of suit for breach of contract and bad faith against insurer client in exchange for a waiver of costs, on grounds that the "owned-property" exclusion barred coverage for claims arising out of water damage to a house the insured built, initially lived in, and subsequently sold.
• Secured summary judgment on basis that other insurer’s claims for equitable contribution were time-barred by California’s two-year statute of limitations.