James McHugh Construction Co. v. Travelers Property Casualty Co. of America, 223 F. Supp. 3d 462

James McHugh Construction Co. was general contractor for a Chicago high‑rise insured under an all‑risk Builders Risk/Inland Marine policy issued to the owner; the policy included a blanket named‑insured endorsement covering contractors.
McHugh hired subcontractor Corporate Cleaning Services (CCS) to perform exterior window washing, including removal of construction debris (mortar, cement, paint) that could not be removed by ordinary cleaning.
CCS used improper methods (e.g., a six‑inch scraper, multi‑direction scraping, no pre‑soak/mock‑up) in violation of the subcontract and GANA industry standards, and scratched numerous exterior glass panels.
Owner rejected scratched glass; McHugh incurred repair/replacement costs and submitted a claim to Travelers, which denied coverage based solely on the policy’s ‘‘omission in, or faulty, inadequate or defective…materials, workmanship or maintenance’’ exclusion.
McHugh sued for coverage; cross‑motions for summary judgment followed. The district court applied Maryland law and ruled for the insurer.

Issue	McHugh's Argument	Travelers' Argument	Held
Whether the policy’s "faulty workmanship" exclusion is ambiguous	Term is ambiguous (could mean process or finished product) and ambiguity should be construed for the insured	Term is plain and refers to defects in the building process or product, excluding coverage	Exclusion unambiguous; covers workmanship/process including cleaning
Whether CCS’s window cleaning constituted "faulty workmanship"	Scratches were an unusual/fortuitous result of ordinary cleaning and not excluded	CCS failed to follow subcontract/industry standards; its conduct was faulty workmanship that directly caused the damage	CCS’s conduct violated industry standards and constitutes faulty workmanship; exclusion applies
Burden of proof for exclusion	N/A (argues exclusion ambiguous / does not apply)	Insurer must show exclusion applies; evidence (affidavit, undisputed facts) satisfies burden here	Insurer met its burden given undisputed facts; plaintiff produced no contrary evidence
Whether the policy’s ‘‘ensuing loss’’ (resulting loss) exception covers the scratched glass	Even if exclusion applies, ensuing loss exception covers fortuitous damage resulting from excluded act	Ensuing loss applies only to independent, covered perils that result from excluded cause, not to the initial damage to the defective item itself	Ensuing loss clause does not apply; plaintiff seeks recovery for the initial damage (scratched glass), not a separate ensuing covered peril

Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard)
Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (standard for genuine dispute at summary judgment)
Connors v. Gov’t Employees Ins. Co., 442 Md. 466 (2015) (Maryland contract/insurance interpretation principles; ambiguity analysis)
U.S. Indus., Inc. v. Aetna Cas. & Sur. Co., 690 F.2d 459 (5th Cir. 1982) (treating faulty workmanship exclusion as excluding workmanship/process defects)
Bangert Bros. Const. Co. v. Americas Ins. Co., 888 F. Supp. 1069 (D. Colo. 1995) (similar construction of workmanship exclusion)