Pat Wielinski Continues Amicus Curiae Assistance for the Construction Industry

Over the past fifteen years, Pat Wielinski has leant his assistance to the Associated General Contractors of America and its local chapters not only in Texas, but throughout the United States. His assistance takes the form of drafting and filing amicus curiae (friends of the court) briefs in appeals involving important insurance coverage issues for the construction industry. Other industry organizations, such as the Associated Builders and Contractors, and the American Subcontractors Association, also routinely sign on to sponsor these briefs. Their purpose is to provide the construction industry’s point of view to courts and to impress upon them the need for consistency in court opinions so that contractors, subcontractors – and owners – can depend on insurance coverage to protect them from risks they face on a daily basis.

Many of these cases involve insurance coverage for construction defects, always a hard-fought battle with any insurance company. The latest example of such a case in which Pat has filed a brief, together with local counsel, is currently before the Michigan Supreme Court in Skanska USA Building, Inc. v. Amerisure Insurance Company, Michigan Supreme Court Nos. 15910/159511.  In that case, the AGC of America and its Michigan chapter seek leave to appeal the opinion of the Michigan Court of Appeals in Skanska USA Building, Inc. v. M.A.P. Mechanical Contractors, Inc., 2019 WL 1265078 (Mich. App. March 19, 2019), in which the court held that Skanska was not entitled to insurance coverage under a commercial general liability (CGL) policy for a claim involving damage and repair of a defective HVAC system. The system was installed by a subcontractor, but did not damage any other parts of the work. Under those facts, the court held that defective workmanship, standing alone, does not meet the definition of an occurrence within the meaning of CGL policy, i.e., an accident.

The court rejected Skanska’s reliance upon case law from other jurisdictions, including Lamar Homes Inc. v. Mid-Continent Casualty, Co., 242 S.W.3d 1 (Tex. 2007), that recognize the existence of an occurrence where defective work causes property damage that was neither expected nor intended from the standpoint of the insured. A key element of Lamar Homes, and other foreign case law, is the presence of an exception within an exclusion to the policy that preserves coverage for property damage arising out of the defective work of a subcontractor. Instead, the Michigan Court of Appeals chose to follow Michigan case law applying older editions of the CGL policy.

Construction trade groups believe that when presented with cogent arguments not only by Skanska itself, but by the AGC as amicus curiae, the Michigan Supreme Court will likely uphold the existence of an “occurrence” for defective work involving a subcontractor. The existence of an occurrence has proven to be one of the most contentious issues between construction insureds and their insurers, because absent the existence of an occurrence, there can be no coverage under the CGL policy. Briefs filed by CY on behalf of construction industry trade organizations have played a central role in changing the law for many states, not only Texas, but other states including Florida, New Jersey, Mississippi, and Georgia. Therefore, these efforts have proven to be of great benefit to the construction industry, the industry that CY serves.

About the Author:  Patrick J. Wielinski is Principal in the Dallas/Fort Worth office of Cokinos | Young.  Pat Wielinski practices in the areas of construction, insurance coverage and risk management. He provides advice on risk management issues and programs, integrating insurance, contract documents and project relationships to manage and transfer risk for his clients. He also counsels clients as to insurance coverage and contractual risk transfer disputes, having been involved in insurance coverage claims for defective workmanship for over 30 years.