Brownson, PLLC is pleased to report that Managing Shareholder Kristi Brownson, together with Senior Litigation Attorney Joe Lulic, and Attorney Olivia Cooper, have obtained summary judgment for a property and casualty insurer, where Peter D. Welte, the Chief Judge of the United States District Court, District of North Dakota, held there was no duty of defense and no duty to indemnify an “additional insured” general contractor under a policy issued to a subcontractor for construction of a parking lot in Williston, North Dakota. On cross-motions for summary judgment, Kristi’s client won on all grounds. The motion by its putative additional insured, CSC, Inc., was denied.

The case arose from the faulty construction of a parking lot at an Acme Tool Co. store in Williston. The insured, Glosson, was a subcontractor who did the concrete work for the general contractor, CSC General Contractors, Inc. CSC was an additional insured under Glosson’s  insurance policy with Kristi’s client. After being informed it had specified an incorrect PSI level for the concrete, CSC nevertheless went ahead, and over the next winter, the concrete failed. The owner Acme then sued CSC. CSC tendered the case to Kristi’s client, who reviewed the Complaint, and made a timely denial shortly thereafter. In a separate arbitration, Glosson was found to owe CSC indemnification for the Acme case, pursuant to those parties’ contract.

On behalf of the insurer, Kristi promptly filed a declaratory judgment case against CSC in the U.S. District Court of North Dakota at Bismarck, North Dakota; the current case. 

The Court held:

1) There was no “Occurrence” under Kristi’s client’s insurance policy as a result of the “Your Work” exclusion;

2) Insurance coverage is barred by the “Contractual Liability” exclusion;

3) Insurance coverage is barred by the “Damage to Your Product” exclusion;

4) Insurance coverage is barred by the “Damage to Your Work” exclusion;

5) Kristi’s client acted reasonably in denying coverage for CSC, and had good reason to do so, precluding CSC’s bad faith claim;

6) CSC was not allowed to assert estoppel against Kristi’s client;

7) The Court upheld a default judgment Kristi’s client had obtained against Glosson.

The claim by CSC against Kristi’s client was for approximately $1,678,844 in damages.

The case is Selective Way Insurance Company v. The Glosson Group, LLC, CSC General Contractors, Inc., and CSC General Contractors ND, LLP, U.S. District Court, District of North Dakota, Case No. 1:17-cv-230.

For a copy of the Court’s Memorandum Opinion and Order, click here.