NEW ORLEANS – The U.S. District Court for the Eastern District of Louisiana recently denied a request for summary judgment from an insurer in a dispute alleging defective workmanship and breach of contract in the construction of a New Orleans home.
In a Dec. 10 ruling, U.S. District Judge Martin L.C. Feldman denied Starr Surplus Lines Insurance Company's motion for summary judgment that contended the insurer should not be held responsible for paying for defects in the construction of the home.
The insurer's filing arose in regard to a dispute involving Robert J. Roth who contracted with Banner Property Management Company Inc. (BPMI) and Marc B. Banner to construct a home in New Orleans, court filings said.
In August 2015, Roth filed claim against Starr Surplus over alleged defects in the construction of the residential property. BPMI had obtained a commercial general liability insurance policy from Starr Surplus during the construction of a residential property owned by Roth. The policy was effective from April 9, 2014, through April 9, 2015.
According to the suit, Roth entered into a contract with BPMI in June 2013 for the construction of the home. The suit contends Roth agreed to pay "$367,074.97 for the construction in biweekly installments, with the balance due upon the project’s completion." BPMI performed all the work associated with the construction, either directly or through subcontractors, "aside from the installation of spray foam insulation underneath the floors", the suit said. BPMI also installed appliances and fixtures in the home, some of which were purchased by Roth. During the construction process, BPMI obtained the commercial insurance policy from Starr Surplus, "effective from April 9, 2014 through April 9, 2015."
The property received a certificate of occupancy in August 2014 from the New Orleans Department of Safety and Permits, court filings said. The following year, Roth sued BPMI and Banner claiming that the company violated the New Home Warranty Act; breached the construction contract by failing to perform services in a workmanlike manner and/or by providing and utilizing defective materials; and were negligent in supplying, installing, selling, or otherwise being responsible for the installation of defective materials in the home, the filings said. In all Roth alleged 78 defects and damages in an amended complaint.
After the suit was filed, court filings said, "BPMI tendered the lawsuit to Starr for defense and indemnity." On June 4, Starr filed for declaratory judgment regarding the scope of its indemnity obligations for Roth’s claims, the filings said.
In his ruling Feldman said, "Ultimately, because Starr has not satisfied its burden of establishing that every claim pleaded in Roth’s petition unambiguously falls within an exclusion, summary judgment in its favor is inappropriate as to both the duty to defend and the duty to indemnify."