Business Risk Exclusions Dismissed in Summary Judgment Motion

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Attorney Tred R. Eyerly analyzes United Specialty Ins. Co. v. Dorn Homes.

November 9, 2020
Tred R. Eyerly - Insurance Law Hawaii

While the court denied summary judgment on whether the alleged damage was due to faulty workmanship and not covered, it granted summary judgment for dismissal of several business risk exclusions the insurer asserted against the developer. United Specialty Ins. Co. v. Dorn Homes, 2020 U.S. Dist. LEXIS 138431 (D. Ariz. Aug. 4, 2020).

Dorn, a residential home developer, developed a 350 single family residential home division. Dorn did not perform the actual construction, but contracted with various subcontractors.

After completion, Dorn began to receive complaints from homeowners about interior damage to some of the homes. Inspections showed interior cracking, wall separation and foundation movement. Dorn ultimately installed an unvented foam insulated roof system to address these issues. Therefore, it did not repair the faulty workmanship of its subcontractors because it would not have been efficient or as effective. Dorn paid for the repairs to the 87 homes at issue.

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



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