No Coverage for Counterclaim Arising from Insured's Faulty Workmanship

Construction worker in funny pose

Attorney Tred R. Eyerly analyzes Am. Family Mut. Ins. Co., S.I. v. Mid-American Grain Distributors, LLC.

August 3, 2020
Tred R. Eyerly - Insurance Law Hawaii

The Eighth Circuit found there was no coverage for the insured's faulty workmanship. Am. Family Mut. Ins. Co., S.I. v. Mid-American Grain Distributors, LLC, 958 F.3d 748 (8th Cir. 2020).

Mid-American contracted with Lehenbauer to design and construct a grain storage and distribution facility for Lehenbauer. Before the work was competed, Lehenbauer terminated Mid-American's services. Mid-American then sued Lehenbauer for breach of contract. Lehenbauer counterclaimed against Mid-American, alleged breach of "implied duties of workmanlike performance and fitness for a particular purpose" and negligence. Mid-American tendered the counterclaim to American Family. American Family accepted the tender under a reservation of rights, but sued Mid-American for a declaratory judgment.

The district court granted American Family's motion for summary judgment, concluding that the counterclaims did not allege an occurrence.

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



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