Curtin & Heefner LLP attorney, Michael Lorenz, recently obtained summary judgment in favor of an insurer in a Federal Court case involving a “faulty workmanship” exclusion.

In Jones vs. Allstate, the insured made claims for losses after a “fly-by-night” driveway sealer company allegedly got oil-based sealant onto the insured’s property during the course of sealing the driveway. The insured claimed damages approaching six figures. Allstate’s policy covered “sudden and accidental direct physical losses…except as limited or excluded.” Allstate denied the claim on the basis of a “faulty workmanship” exclusion.

Judge McHugh of the Eastern District of Pennsylvania found that courts have concluded that “faulty workmanship” exclusions similar to that found in Allstate’s policy are unambiguous. We
successfully argued that the contractor’s workmanship – the manner the contractor applied the driveway sealant – was the cause of the damages to the abutting surfaces. Judge McHugh found that this workmanship was “faulty.” He also accepted another of our arguments when he concluded that the contractor’s attempts to clean the sealant was workmanship and was faulty and noted that courts have held that defective cleaning is considered defective maintenance. These efforts by the contractor were faulty, worsened the damage, and therefore amounted to excluded losses.

Finding that the losses were excluded by the “faulty workmanship” exclusion, the Judge also granted the Motion to Dismiss the bad faith claim. There can be no bad faith, as Judge McHugh explained, where the “exclusion was properly invoked.”