Capstone Bldg. Corp. v. Am. Motorists Ins. Co.Annotate this Case
Plaintiffs served as the general contractor and the project developer for construction of a student housing complex at the University of Connecticut (UConn). UConn procured a commercial general liability (CGL) policy for the project, which insured Plaintiffs and their work. Defendant, American Motorists Insurance Company (AMICO), was the issuing insurer's successor in interest. UConn alleged that Plaintiffs breached the agreement with UConn, and Plaintiffs demanded that AMICO defend against UConn's claims. AMICO denied coverage. Plaintiffs settled their claims with UConn and then brought this action against Defendant for breach of contract and bad faith. The U.S. district court certified three questions of law for the Connecticut Supreme Court's consideration. The Court answered (1) allegations of unintended defective construction work by a subcontractor that damages nondefective property may trigger coverage under a CGL policy; (2) under the plain language of the insurance policy in this case, there is no cause of action based on AMICO's failure to conduct a discretionary investigation of claims for coverage; and (3) in global settlements encompassing multiple claims, the insured has the burden of proving that a pre-suit settlement is reasonable in proportion to claims that the insurer has a duty to defend.