Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

The claim arose from an accident at a construction site. The company was insured under its own commercial general liability policy, issued by Acadia, and as an additional insured on a subcontractor's policy, issued by AIG. Both policies contained provisions that: This insurance is excess over: (1) Any of the other insurance, whether primary, excess, contingent, or on any other basis . . . (a) That is . . . coverage for "your work"; . . .(2) Any other primary insurance available to you covering liability for damages arising out of the premises or operations for which you have been added as an additional insured by attachment of an endorsement. The company and Acadia sought declaratory judgment that AIG was obligated to defend the construction company and compensation of costs incurred by Acadia that defense. The district court granted judgment in AIG's favor. The First Circuit reversed, holding that the plain language of the policy requires that the Acadia policy be treated as excess over the AIG policy. The word "you" refers solely to the listed Named Insured in the policy Declarations or "qualifying as Named Insureds" under the policy.

The hospital engaged a contractor for renovations and expansion. Before occupancy the hospital noted problems with the flooring in operating rooms; the contractor completed some repairs. After the project was complete, new problems continued to appear and the contractor repeatedly repaired the floors. All of the problems documented by January 2005, the expiration of a one-year warranty period, were repaired. The contractor continued to perform repairs through early 2006, when the hospital conducted its own investigation and replaced the floors at a cost of $398,070, without involving the contractor. The cost was higher than the original installation because of the need for containment systems so that the facility could continue to operate. A jury awarded $331,835 in damages on the warranty plus pre-judgment interest. The First Circuit affirmed. A reasonable jury could find that the problems were due to faulty workmanship or materials for which the contractor was responsible under the warranty, that the hospital properly invoked the warranty, and that the hospital was not required to give the contractor the option of doing the job.