SCM Attorneys Secure Summary Judgment Dismissals with Prejudice
Attorney Richard A. Vazquez, assisted on briefing by Robert T. Denny and Erik R. Hamblin, recently secured summary judgment dismissals with prejudice on behalf of Zurich American Ins. Co. of breach of contract, breach of duty to defend, breach of duty to indemnify, and bad faith claims in the case of Big-D Construction Midwest, LLC v. Zurich American Ins. Co., 2018 WL 3025066 (D. Utah Jun. 18, 2018). The case involved the policyholder’s claims for reimbursement for expenses incurred in replacing lumber installed by a subcontractor in three Minnesota construction projects.
The policyholder claimed that it was entitled to reimbursement for these costs as covered, non-excluded “property damage” under a commercial general liability policy because otherwise nondefective work and property within the projects was damaged during the replacement of the lumber. In granting summary judgment for Zurich American, Senior United States District Judge Bruce S. Jenkins held that these damages would not be covered under the Zurich American’s policy under either Utah or Minnesota law because 1) rip-and-tear damages caused to non-defective property during the removal of products installed by or on behalf of the policyholder are not caused by an insurable, accidental policy-defined “occurrence” under Minnesota law; and 2) the policy’s business-risk exclusion (n) for Recall of Products, Work, Or Impaired Property (also known as the “sistership” exclusion) was broad enough to bar all categories of claimed damages arising from the installation, removal and replacement of the lumber under Utah law. The Court also held that no reasonable jury could find that Zurich American breached its duties of good faith and fair dealing to the policyholder.