Home Back to News

Markel Unit Fights To Secure Win In Builder Defect Fight

(October 3, 2016) A Markel Corp. insurer asked a Florida federal court Monday to keep in place its finding that the insurer doesn’t have to defend a builder in a lawsuit alleging construction defects at one of its condominium complexes, arguing the judge correctly applied an exclusion in the builder’s insurance policy for damage to its own work.

U.S. District Judge Roy B. Dalton Jr. held last month that Markel subsidiary Evanston Insurance Co. has no duty to defend DiMucci Development Corp. of Ponce Inlet Inc. in the underlying action filed by the unit owners association at the Towers Grande high-rise in Daytona Beach Shores, Florida. Judge Dalton said the “your work” exclusion in DiMucci’s commercial general liability policy with Evanston precludes coverage because the underlying complaint alleges only damage to the builder’s own work.

Since then, DiMucci has asked that the court circle back on its summary judgment order. But Evanston says the request doesn’t meet the legal threshold for reconsideration; to induce a judge to reverse a prior decision, the court must be presented with strongly convincing facts or law that shows there’s been an intervening change in controlling law, new evidence, or a clear error, Evanston said, adding that none of those conditions apply to this case.

“Reconsideration of a previous order is an extraordinary remedy to be employed sparingly,” the insurer said.

Clifford B. Shepard, an attorney representing DiMucci, said he’s hopeful the court will grant DiMucci’s motion and reconsider the ruling. “[Evanston’s] response makes no substantive argument that the points we asserted are incorrect,” he said.

In its motion for reconsideration, DiMucci had argued that the underlying suit stemmed in part from work performed by a subcontractor and included direct claims against the subcontractor, making the “your work” exclusion inapplicable.

DiMucci held three consecutive CGL policies with Evanston predecessor Essex Insurance Co. between 2003 and 2005, according to court documents. During that span, DiMucci constructed Towers Grande, a 132-unit condominium building, with subcontractor Wayne’s Roofing and Sheet Metal handling the roofing work, court papers said.

In 2012, the Towers Grande Condominium Association sued DiMucci and Wayne’s, alleging they failed to construct the building properly and adequately, resulting in damage to the roof and heating, ventilation and air conditioning systems, as well as multiple water intrusion issues purportedly tied to poor waterproofing. That case remains pending.

Evanston filed suit in Florida federal court in September 2014, seeking a ruling that it doesn’t have to defend or indemnify DiMucci with respect to the underlying action.

Ruling on the parties’ cross-motions for summary judgment, Judge Dalton found that, as a preliminary matter, the underlying complaint alleged an accidental “occurrence” resulting in property damage, rejecting Evanston’s contention that the damage was expected or intended by DiMucci.

But the judge ultimately concluded that the “your work” exclusion negated Evanston’s duty to defend, noting that DiMucci’s work encompasses the Towers Grande building in its entirety.

The underlying complaint alleged only that poor construction on parts of DiMucci’s own work damaged other parts of its work; As a result, the exclusion applies, the judge said.

Evanston is represented by Rebecca C. Appelbaum, R. Steven Rawls and Anthony M. Horrnik of Butler Weihmuller Katz Craig LLP.

DiMucci is represented by Clifford B. Shepard of Shepard Smith & Cassady PA.

The case is Essex Insurance Co. v. DiMucci Development Corp. of Ponce Inlet Inc., case number 6:15-cv-00486, in the U.S. District Court for the Middle District of Florida, Orlando Division.

By Kat Sieniuc
–Additional reporting by Jeff Sistrunk. Editing by Aaron Pelc.