917 F. Supp. 2d 1096
D. Nev.2013Background
- IGT and Big-D entered a remodeling contract; TIFGT was subcontractor installing stonework.
- Nautilus insured TIFGT with two CGL policies; Big-D added as an additional insured for TIFGT’s ongoing operations.
- Century issued a blanket additional insured endorsement for Big-D with respect to TIFGT’s ongoing operations.
- Stonework failures at IGT building (April 2008, July 2008, December 2008) led IGT to demand remediation and prompted safety measures.
- Nautilus and Century denied/limited coverage; Travelers notified Nautilus/Century; settlements occurred between Big-D and IGT; this suit seeks declaratory relief, breach, and unfair insurance practices; motions for summary judgment were filed and ruled in parts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the tile falls an occurrence under the policies? | Big-D: falls were unexpected consequences of defective work. | Nautilus/Century: faulty workmanship itself is not an occurrence; only unexpected consequences may be. | Yes for each tile fall; occurrences exist for the three falls. |
| Is there “property damage” caused by an occurrence? | Damage to tiles, stucco substrate, loss of use, and safety measures are property damage. | Some claimed damages are not property damage or are excluded; need more fact-finding. | There are genuine issues; some damages are not property damage, but others (tiles that fell, loss of use, safety measures, water intrusion) may be property damage. |
| When did the property damage occur relative to policy periods (Nautilus vs Century) and pre-existing damage? | Property damage occurred during both policy periods; some post-dates fall within Century; first stone in April 2008 overlaps Nautilus. | Damage may pre-exist Century or occur outside coverage; some damages occur after policy end. | Nautilus liable for April 2008 damage only; Century liable for July 2008 and December 2008 damages; issues remain for some overlapping or post-policy damages. |
| Do exclusions (k, j(5), j(6), 1) bar coverage? | Exclusions do not apply to scope of Big-D’s damages; some damages fall under products-completed operations. | Exclusions can bar coverage for damaged products and work. | Exclusion k bars damages to TIFGT’s tiles (your product); exclusions j(5), j(6), and exclusion 1 require fact-finding on timing and completed operations. |
| Century’s duty to indemnify and settlement consent issues; notice and consent disputes | Big-D may have contractual obligation to remediate; indemnity triggered by contract damages; consent issues unresolved. | Indemnity may require judgment or suit; consent to settlement required; facts in dispute. | Denial of summary judgment on Century’s indemnity duty and settlement-consent issues; genuine issues of material fact remain. |
Key Cases Cited
- Beckwith v. State Farm Fire & Cas. Co., 120 Nev. 23, 83 P.3d 275 (Nev. 2004) (definition of accident/occurrence; unforeseeable event standard)
- Powell v. Liberty Mut. Fire Ins. Co., 127 Nev. 14, 252 P.3d 668 ( Nev. 2011) (policy interpretation; insured-friendly construction; ambiguity in policy terms)
- Fourth St. Place v. Travelers Indem. Co., - Nev. -, 270 P.3d 1235 (Nev. 2011) (interpretation of policy language; ambiguity and deference to insured)
- Las Vegas Metro. Police Dep’t v. Coregis Ins. Co., 256 P.3d 958 (Nev. 2011) (unfair claims handling; prompt communication and investigation considerations)
- Desert Mountain Props. Ltd. P’ship v. Liberty Mut. Fire Ins. Co., 236 P.3d 421 (Ariz. Ct. App. 2010) (reasonableness of safety measures; property damage exclusion context)