A Case In Review: Transportation Insurance Company v. Regency Roofing Companies, Inc.
August 19th, 2015/By Admin/In Blog
In this case, Transportation Insurance Company moved for partial summary judgment on the grounds that it had no duty to defend Regency in a case between it and an individual homeowner (Rhoads). Rhoads sued Regency for damages for mold injuries arising out of faulty installation of the roof, which caused leakage and flooding problems. Transportation had been providing Regency with a defense in the action since its commencement in January 2002, based on the existence of three primary insurance policies and three umbrella policies, spanning from May 2000 to May 2002. The policies provided that Transportation would pay sums the insured became obligated to pay for damages due to “bodily injury” or “property damage.” Transportation argued that summary judgment was proper because of various exclusionary provisions precluding coverage for damage to the insured’s property and damage resulting from faulty work, to name a few. Transportation also based its motion for summary judgment on the fact that the Policies also contained pre-existing condition provisions which required that the insured was unaware of any property damage prior to the policy period, and must first have learned of the damage during the term of the policy. These provisions are known as “known loss endorsements” or Montrose Endorsements. Transportation argued that Regency knew about Rhoads’ claims before the two policies’ effective dates because Regency’s employee was repeatedly requested to do repair work on the roof because of the leaks.
Summary judgment was denied. The Court held that the exclusions did not apply because the Rhoads’ action sought recovery of damage for mold related injuries arising out of the allegedly faulty roof repair and not recovery for damage to Regency’s roof work or the replacement of the roof. The Court also interpreted the Montrose Endorsement narrowly, and denied summary judgment on the basis of the Montrose Endorsements because Regency offered no evidence proving that Regency knew about the existence of mold damage to the home allegedly caused by defective roof repairs prior to commencement of any policy. Regency’s knowledge of water intrusion was not tantamount to knowledge of mold damage, which was the basis of the Rhoads’ action.
Transportation Insurance Company v. Regency Roofing Companies, Inc., 2007 U.S. Dist. LEXIS 74364
