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Liberty Mutual Unit wins construction conflict



A subcontractor cannot recover under a property owner's Liberty Mutual Insurance Group unit's building risk policy because of the coverage's exclusion for failure to perform, a federal appeals court says.

Colorado Center Development LLC, which owns a Denver property and had a builder risk policy with Liberty Mutual Fire Insurance Co., hired a construction company to build an office building, according to Tuesday's ruling of the 10th U.S. Circuit Court of Appeals in Denver Rocky Mountain Prestress LLC v Liberty Mutual Fire Insurance Co.

The construction company employed Denver-based Rocky Mountain Prestress to design, supply and install connections and designs of prefabricated concrete components and to provide and install grouting and / or patching of all connections required by the design for the precast construction. s structural integrity, according to the decision.

An engineering firm hired by the construction company concluded there were "potential structural problems" with RMP's work and submitted a plan detailing the repair of repairs that would be required at various defective joints, according to the decision.

RMP filed an application with Liberty Mutual seeking coverage under the Colorado Center policy. It then appealed against the insurer seeking coverage, and Liberty Mutual responded with a motion for summary judgment. The proposal was granted by the US District Court in Denver.

The appeal was upheld by a court panel. A loss "caused by an act during a renovation will be covered if the law causes a covered hazard, such as a fire, and the latter hazard damages the building," the decision said.

"In the present case, there was only one cause of (insured) loss ̵

1; spraying of the building that caused damage to the windows – and because it was not a covered danger, the resulting loss provision did not apply," said the decision.

" In summary, the RMP does not point to any evidence for which a reasonable jury could find that it suffered a loss in addition to its costs of repairing its own erroneous performance when joining joints, "the decision said.

"This asserted correction loss is unequivocally consistent with the policy's exclusion for improper execution, and the policy's loss of profit exception does not restore coverage for this expressly excluded cause; any contrary interpretation would contravene the terms of the policy and allow exceptions to swallow the rule, "the high court judge said, affirming the subpoena.

Since one of the judges who heard the appeal was killed before the decision, the decision was issued by the two remaining judges, which is allowed if they agree, according to the decision.

Attorneys in the case could not be reached for comment.

                    


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