Pulte Homes Sues Insurers Over Defense Refusals in NJ Condo Defect Dispute

Pulte Homes of NJ, Limited Partnership has filed a federal lawsuit in the US District Court for the District of New Jersey against Erie Insurance Exchange, Pennsylvania National Mutual Casualty Insurance Company, and Evanston Insurance Company. The suit alleges that these insurers wrongfully refused to defend Pulte as an additional insured in ongoing construction defect litigation concerning the Signature Place at Garfield condominium community in Bergen County, New Jersey. Pulte developed the community and had contractual agreements requiring the contractors' liability insurers to provide primary coverage and defense to Pulte as an additional insured party. The underlying state litigation involves claims of construction defects impacting the condominium buildings and common amenities, alleging property damage due to negligent work by subcontractors Construction Applicators Philadelphia, LLC (CAP) and Michael J. Wright Construction Co., Inc. (MJW). Pulte contends that under the contractors' policies issued by Erie, Pennsylvania National, and Evanston, it is covered as an additional insured for damages caused by the subcontractors' work, with the insurers bearing a duty to defend under commercial general liability provisions and additional insured endorsements. The insurers denied or delayed coverage, prompting Pulte's federal action seeking declaratory judgment and reimbursement of defense costs and fees. No judicial ruling has yet been made regarding the insurers' defense obligations. This case highlights insurer obligations under additional insured endorsements in the construction defect context and the ongoing disputes over coverage for property damage claims in multi-party construction litigation in New Jersey.