A federal appeals court on Tuesday upheld a lower court ruling dismissing breach of contract and bad faith lawsuits filed by a construction company against an entity of Selective Insurance Group.
Palm Desert, Calif.-based Premier Construction and Remodel Inc. was accused in the underlying lawsuit of failing to return keys and a garage door opener to the owner of a condominium that Premier was contracted to renovate, according to the ruling by the 9th U.S. Circuit Court of Appeals in San Francisco i Premier Construction and Remodel Inc. v. Mesa Underwriters Specialty Insurance Co.
After the insurer denied coverage, Premier sued Mesa, a unit of Branchville, New Jersey-based Specialty, alleging breach of contract, bad faith and negligent misrepresentation, according to the ruling.
The U.S. District Court in Pasadena ruled in favor of the insurer and was affirmed by a three-judge panel of the Court of Appeals.
“Specifically, Premier contends that its failure to return the keys and garage door opener may have caused the condo owner to be locked out of his property is a matter constituting a “(l)oss of use”; of the condo,” it said.
Because the complaint does not raise a “plausible theory” that would trigger coverage, the district court properly granted the insurer summary judgment, the panel’s decision said.
Attorneys in the case did not respond to requests for coverage.