Insurance Law

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in plaintiff-insurance company’s action seeking declaration that defendant’s professional liability errors and omissions policy issued to insured covered some claims in underlying lawsuit alleging that insured conducted pattern of harassment, intimidation and interference with property rights of insured’s neighbors. Underlying lawsuit alleged that insured had commercially farmed her own property in violation of restrictive covenants, polluted adjoining lake, interfered with neighbors’ easement rights, posted offensive signs and stalked neighbors, and defendant’s policy that provided coverage for acts arising out of any professional services insured had provided to others as real estate broker did not cover any alleged acts of insured in her role as neighbor in underlying lawsuit. Moreover, plaintiffs in underlying lawsuit failed to allege that insured had breached any professional obligation as real estate broker.

Dist. Ct. did not err in granting defendants-insurance companies’ motion for summary judgment in plaintiff-insured’s action seeking declaration that one or both of defendant’s insurance policies covered plaintiff’s over $5 million loss arising out of theft by one of its vice-presidents. One policy covered theft by plaintiff’s “employee,” but vice-president responsible for said theft did not meet policy’s definition of “employee,” since, although plaintiff and third-party company had contract calling for plaintiff’s right to use vice-president’s labor, record showed that third-party company was mere alter-ego of vice-president. As such, third-party company was not “labor-leasing firm” that was required under terms of policy for vice-president to be deemed “employee.” Moreover, terms of other policy specifically excluded losses incurred by plaintiff’s “authorized representative” or anyone else to whom plaintiff had entrusted its property, and record showed that actions of vice-president fell within this exclusion, where vice-president pocketed proceeds of company property to which vice-president had been placed in charge.

Dist. Ct. did not err in granting plaintiff-insurance company’s motion for summary judgment in action seeking declaration that plaintiff’s standard commercial general liability policy did not cover losses incurred by insured in settlement of underlying lawsuit where insured was sued for breach of warranty of habitability arising out of work performed by insured when installing windows that resulted in condominium association incurring extensive water damages to parts of condominium building and to unit owners’ personal property. Applicable measure of damages for breach of implied warranty of habitability in instant case was cost of repairing defectively installed windows, and provisions in relevant policy excluded coverage for costs associated with repairing or replacing insured’s defective work. As such, where language in settlement agreement linked proceeds of settlement to costs associated with insured’s defective work, plaintiff had no duty to indemnify insured based on language in settlement.

Dist. Ct. did not err in granting defendant-insurance company’s motion for summary judgment in action seeking declaration that policy issued by defendant-insurance company covered losses incurred by plaintiff-insured arising out of accident occurring on plaintiff’s construction site. Defendant was entitled to summary judgment to extent plaintiff sought recovery under “Builder’s Risk” provisions of policy, where said provisions limited coverage to losses arising out of plaintiff’s physical structure, and where plaintiff’s economic and consequential losses concerned expenses associated with delay and loss of use of plaintiff’s airport facility. Also, plaintiff was not entitled to receive benefits under policy’s “soft cost” provisions arising out of delay in completion of construction policy, where: (1) coverage was subject to 90-day “delay” deductible; (2) plaintiff’s airport facility actually opened for business within 90 days of scheduled opening date of said facility; and (3) plaintiff failed to identify any “soft costs” in terms of bond interest payments occurring after facility’s opening date. Dist. Ct. erred, though, in granting defendant’s motion for summary judgment with respect to ERAL provisions of policy that covered losses arising out of plaintiff’s attempts to reduce delay in construction project arising out of accident, where: (1) Dist. Ct. improperly found that plaintiff could not receive such expenses in absence of any compensable soft cost claim; and (2) jury question remained as to whether plaintiff incurred additional costs for re-sequencing and accelerating construction project to minimize delay in construction project.