Insurer Not Entitled to Summary Judgment on Construction Defect, Bad Faith Claims

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The federal district court denied the insurer's motion for summary judgment.

October 7, 2019
Tred R. Eyerly - Insurance Law Hawaii

The federal district court denied the insurer's motion for summary judgment seeking to establish there was no coverage for construction defect claims and for bad faith. Country Mut. Ins. Co. v. AAA Constr. LLC, 2019 U.S. Dist. LEXIS 115935 (W.D. Okla. July 12, 2019).

Jeffrey and Tammy Shaver entered two contracts with AAA Construction for the construction of a garage and of a barn on their property. After construction was completed, the Shavers sued AAA Construction for building the garage over two high-pressure gas pipelines and the utility easements associated with them. They alleged AAA Construction was negligent for constructing over a working utility line. AAA Construction's insurer, Country Mutual Insurance Company (CMIC) denied coverage because the alleged faulty workmanship of AAA Construction did not constitute an "occurrence" under the policy.

CMIC sued AAA Construction for a declaratory judgment that it had no duty to defend or indemnify. CMIC moved for summary judgment.

Mr. Eyerly may be contacted at te@hawaiilawyer.com



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