Berkley Assurance Company v. Hunt Construction Group, Inc.

Background

Berkley brought a declaratory-judgment action seeking a ruling that insurance policies issued to Hunt in 2016 and 2017 did not cover claims arising from the renovation of Hard Rock Stadium. Hunt counterclaimed for declarations that the claims were covered, that Berkley had a duty to defend Hunt, and that Berkley owed damages for breach of contract. Hunt moved for partial summary judgment, and Berkley moved for summary judgment.

The 2016–2017 policy was a claims-made-and-reported policy. Generally, it covered claims first made against Hunt and reported to Berkley during the policy period or an applicable extended reporting period. Its automatic extended reporting period allowed 60 additional days to report claims made before policy termination, but only if Berkley or Hunt terminated or did not renew the policy under the specified conditions. The parties instead renewed the insurance coverage.

Hillsdale asserted contract claims against Hunt concerning Hunt’s alleged handling of design, scheduling, coordination, change orders, and related project responsibilities. Hunt reported the Hillsdale claim to Berkley on July 20, 2017—five days after the 2016–2017 policy period ended. South Florida Stadium later asserted that Hunt had to indemnify it for damages related to Hillsdale’s counterclaim. Hunt notified Berkley of that claim in 2018.

The Hillsdale Claim

The court held that the Hillsdale claim was not covered by the 2016–2017 policy because Hunt did not report it within the time required by the policy. The court rejected Hunt’s argument that the 60-day automatic extended reporting period applied. The policy required termination or nonrenewal by Berkley or Hunt, and neither occurred. The policy period simply expired and was followed by renewed coverage.

The court also rejected Hunt’s arguments that the policy was ambiguous, that the word “automatic” meant the extension always applied, and that Berkley had waived or was barred from raising the late-reporting defense. The court explained that waiver could not create coverage where the policy did not provide coverage, and Hunt had not shown the prejudice required for estoppel. Because the claim was outside the policy’s reporting period, the court did not decide Berkley’s alternative argument that the contractual-liability exclusion independently barred coverage.

The South Florida Stadium Claim

The policies provided that claims arising from related acts, errors, incidents, or events would be treated as one claim, considered first made when the earliest related claim was made, and covered only under the policy covering that earliest claim. The parties did not dispute that the South Florida Stadium claim was related to the Hillsdale claim.

The court therefore treated the two claims as a single claim first made when Hillsdale’s claim was made. Because the Hillsdale claim was not timely reported, the court held that the South Florida Stadium claim was also outside the reporting period and not covered. The court rejected Hunt’s waiver and estoppel arguments because Hunt did not show the necessary prejudice. The court likewise did not reach Berkley’s alternative contractual-liability-exclusion argument.

Disposition

Judge Jesse M. Furman denied Hunt’s motion for partial summary judgment in its entirety and granted Berkley’s motion for summary judgment in its entirety. The court held that Berkley had no duty to defend Hunt against the Hillsdale claim and that the South Florida Stadium claim was not covered. The court directed the parties to show cause within two weeks if materials temporarily filed under seal should remain sealed or redacted, and directed the Clerk to terminate the specified motions and close the case.