United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
TALWANI UNITED STATES DISTRICT JUDGE.
this court is an insurance coverage dispute. In early 2013, a
private school hired Lee Kennedy Co., Inc.
(“LKC”), a construction contractor, to construct
their new gymnasium. LKC hired a subcontractor to construct
the gymnasium floor. However, the subcontractor's
workmanship allegedly resulted in deficiencies with the floor
that LKC ultimately corrected. LKC now brings this suit
against Arch Insurance Company (“Arch”) claiming
entitlement to coverage under the Arch Contractor Controlled
Insurance Program policy (“the Policy”) for the
costs LKC incurred to fix the floor deficiencies caused by
the subcontractor's work.
parties have filed cross-motions for summary judgment.
Arch's Motion for Summary Judgment [#25] seeks
summary judgment on both the breach of contract (Count I) and
declaratory judgment (Count III) claims, and LKC's
Cross-Motion for Summary Judgment [#32] seeks
summary judgment on the declaratory judgment
foregoing reasons, Arch's Motion for Summary
Judgment [#25] is ALLOWED and LKC's Cross-Motion
for Summary Judgment [#32] is DENIED.
early 2013, LKC signed a contract with the Winsor School to
construct a new gymnasium (the “Project”), and in
May 2013, Arch's previously issued Policy covering LKC
for specific construction projects was amended to include the
Project. Transmittal Aff. Barbara O'Donnell Supp.
Def.'s Mot. Summ. J. (“O'Donnell Aff.”)
Ex. C [#28-3], Ex. D [#28-4].
December 2013, LKC subcontracted the Project floor work to a
subcontractor, Kenvo Floor Co., Inc. (“Kenvo”),
who subsequently enrolled in the Policy as an insured
subcontractor. Id. Ex. B [#28-2], Ex. E [#28-6].
Kevno's primary work included the installation of
“kip” pads, the subfloor, and the finish floor
surface. Id. Ex. A ¶ 8 [#28-1]. At the time of
the installation, LKC had no knowledge of any negligent or
faulty installation by Kenvo. Id. Ex. A ¶ 9
Project was completed in April 2015. Id. Ex. A
¶ 10 [#28-1]. In a series of three reports, dated May
29, August 6, and August 26, 2015, the Project's
architect, William Rawn Associates (“the
Architect”) notified LKC of a series of flooring system
deficiencies. Id. Ex. F [#28-6], Ex. G [#28-7],
Ex. H [#28-8]. On September 14, 2015, LKC informed Kenvo that
LKC was withholding $192, 383.39 in payments to Kenvo to
offset amounts anticipated by LKC to fix the floor
deficiencies. Id. Ex. I [#28-9], Ex. J ¶¶
6, 9 [#28-10].
2, 2016, the Architect sent LKC a “Letter of
Non-Compliance, ” noting that “[t]he Resilient
Acoustic Isolation Subfloor in the gymnasium is not in
compliance with the Contract Documents” and requiring
specific performance under “Actions Required.”
Id. Ex. O at 2 [#28-15]. On June 3, 2016, LKC,
through its insurance broker, submitted a request to Arch for
coverage of the costs LKC expected to incur in order to
remedy the Project floor, see id. Ex. P [#28-16],
which Arch denied on July 19, 2016, raising the same
arguments that Arch has in defense of this litigation,
see id. Ex. R [#28-18].
The Policy Terms
Section I, Part 1, titled “Coverages, ” Arch:
Will pay those sums that the insured becomes legally
obligated to pay as damages because of “bodily
injury” or “property damage” to which this
insurance applies. We will have the right and duty to defend
the insured against any “suit” seeking those
damages. However, we will have no duty to defend the insured
against any “suit” seeking damages for