California Federal Court Finds a Breach of Contract Exclusion in a CGL Policy Bars All Coverage for a Construction Defect Action

Red block amidst white blocks

The building owner sued in May 2015 for damages for construction defects from the construction.

July 19, 2021
Robert Dennison - Traub Lieberman

The Southern District of California published a decision in May 2021 in Associated Industries Ins. Co. v. Mt. Hawley Ins. Co., 2021 WL 1921016 (S.D. Cal. 5/12/21) concerning the scope of a breach of contract exclusion in a general liability insurance policy as applied to a construction defect action.

The suit was filed by Associated Industries Insurance Company against Mt. Hawley Insurance Company for equitable contribution for amounts spent to defend and indemnify the parties co-insured, referred to as JGCI in the decision. JGCI agreed to build a building for a third party pursuant to a written construction contract. The City of Davis issued a certificate of occupancy for the building on May 6, 2005. The City’s permits stated the building was final on that date. Mt. Hawley issued the first of several annual general liability insurance policies in September 2005.

Mr. Dennison may be contacted at rdennison@tlsslaw.com



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