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Griggs Road, L.P. v. Selective Way Insurance Company of America

United States District Court, M.D. Pennsylvania

June 19, 2017

GRIGGS ROAD, L.P., and BLAISE ALEXANDER, Plaintiffs,
v.
SELECTIVE WAY INSURANCE COMPANY OF AMERICA, Defendant.

          MEMORANDUM OPINION AND ORDER

          Matthew W. Brann United States District Judge.

         Before the Court for disposition is Plaintiffs Griggs Road, L.P. and Blaise Alexander's Motion to Remand Pursuant to 28 U.S.C. § 1447(c). For the following reasons, this Motion will be denied.

         I. BACKGROUND

         On February 3, 2017, this insurance coverage dispute was brought before the Court by Notice of Removal pursuant to diversity jurisdiction under 28 U.S.C. § 1332 from the Court of Common Pleas of Lycoming County.[1] On February 15, 2017, Defendant Selective Way Insurance Company of America (“Defendant”) filed an Answer and Counterclaim. The factual scenario underlying Plaintiffs Griggs Road, L.P. and Blaise Alexander's (“Plaintiffs”) claims involves a loss incurred on June 1, 2015 during the construction of their residence (“Alexander Residence”).[2]

         From July 2013 to July 2014, a subcontractor poured NuDura Insulated Concrete Form (ICF) walls to form the foundation and walls of the Alexander Residence.[3] In December 2014, another subcontractor began installing stucco directly over the exterior of the NuDura ICF walls, including all exposed lower level exterior walls, all first floor exterior walls, all exterior walls of the dormers/towers, and all exterior walls of the chimneys.[4] The stucco was affixed to the NuDura ICF walls by the subcontractor with a layer of petroleum-based tar paper followed by a layer of wire mesh.[5]

         Following this insulation, it was discovered in May 2015 that the subcontractor had affixed the stucco in a way which damaged the insulating properties of the NuDura ICF walls.[6] This damage to the walls would allow weather elements to affect the interior of the residence.[7] The process of removing the improperly applied stucco resulted in damage to the existing NuDura ICF walls in excess of $1, 700, 000.00.[8] In addition to the foundation walls, the existing soffits on the Alexander Residence were also damaged by the subcontractor's improper installation of the stucco and subsequent efforts to remediate the said installation.[9]

         On or about October 13, 2015, Plaintiffs notified Defendant Selective Way, their insurer, of their claim for damage to the existing foundation walls resulting from the remedial action taken to correct the faulty installation of the stucco.[10]

         Defendant denied coverage by way of letter on November 18, 2015 citing the operative policy's exclusion for defective workmanship and faulty materials.[11] On November 20, 2015, Plaintiffs again wrote to Defendant citing specific policy provisions and case law in support of their position that the damages were covered by the policy.[12] The relevant provisions of that policy state:

A. COVERAGE
We will pay for direct physical loss or damage to Covered Property from any of the Covered Causes of Loss.
1. COVERED PROPERTY, as used in this Coverage Form means:
a. Buildings and structures while in the course of construction, erection, or fabrication at the “job site, ” including foundations of such buildings or structures;
b. If intended to become a permanent part of the buildings and structures at the "job site, " materials, supplies, fixtures, machinery and equipment of any nature whatsoever:
. . .
3. COVERED CAUSE OF LOSS
Covered Cause of Loss means direct physical loss or damage to Covered Property except those causes of loss or damage listed in SECTION B. EXCLUSIONS.
. . .
B. EXCLUSIONS
. . .
3. We will not pay for loss or damage caused by or resulting from any of the following. But if loss or damage by a Covered Cause of Loss results, we will pay for the loss or damage caused by the Covered Cause of Loss.
. . .
c. Faulty, inadequate or defective:
. . .
(2) Design, specifications, workmanship, repair, construction, renovation, remodeling, ...

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