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Legislative Bill Seeks to Address Group Builders’ Decision on Construction Defects

February 7, 2011 — a href="mailto:te@hawaiilawyer.com">Tred R. Eyerly - Insurance Law Hawaii - February 7, 2011

In Group Builders, Inc. v. Admiral Ins. Co., 123 Haw. 142, 231 P.3d 67 (Haw. Ct. App. 2010), the Hawaii Intermediate Court of Appeals determined that construction defects did not arise from an occurrence and therefore were not covered under a CGL policy. [See our Group Builders' post here]. Bills were recently submitted to the Hawaii State Legislature in an effort to rectify the Group Builders’ decision.

The bills are identified as SB1192, HB939 and HB929. They are patterned after a Colorado statute, Colo. Rev. Stat. sec. 13-20-808, seeking to overturn an appellate court decision, General Security Indemnity Co. of Arizona v. Mountain States Mutual Cas. Co., 205 P.3d 529 (Colo. Ct..App. 2009). Similar to Group Builders, General Security held that damages from faulty workmanship did not arise from an occurrence. Ironically, Group Builders relied heavily upon the General Security”s outline of the majority/minority positions regarding construction defects.

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Reprinted courtesy of Tred R. Eyerly, Insurance Law Hawaii. Mr. Eyerly can be contacted at te@hawaiilawyer.com

Legislative Bill Seeks to Address Group Builders’ Decision on Construction Defects