A federal appeals court Friday affirmed a lower court ruling in an insurer’s favor in a coverage dispute with an Idaho carpentry company.
In September 2019, a fire broke out in shop space in Ucon, Idaho, rented by Northland LLC, an interior carpentry contractor, according to court papers in Northland LLC, Kayla Briggs v. Contractors Bonding & Insurance Co.
Phoenix-based Contractors Bonding, whose policy included commercial general liability and inland marine property coverage, paid Northland for certain damages and claims, according to court papers.
During the investigation, Northland notified Contractors Bonding of two lawsuits filed against it. Contractors Bonding determined there was no coverage under the policy and Northland sued the insurer in US District Court in Seattle.
The district court ruled in the insurer̵
7;s favor and was affirmed by a three-judge appeals court panel of the 9th US Circuit Court of Appeals in San Francisco.Contractors Binding had a duty to defend the lawsuits “if the allegations of the complaint ‘read broadly reveal a potential for liability’ for damages arising from property damage caused by an occurrence,” the appeals court panel said, citing an earlier lawsuit.
“Neither complaint includes such allegations. Instead, both complaints allege breaches of contract and seek liability arising from contractual obligations and debts rather than from property damage,” the panel said.
Attorneys in the case did not respond to requests for comment.
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