A federal judge has ruled that Amerisure Insurance Company, the insurer of The Auchter Company, must pay $8.5 million in fines for construction defects without seeking contributions from third-party insurers. The ruling stems from a dispute over liability for defects in a condominium project in Jacksonville, Florida.

Legal Battle Over Construction Deficiencies

The case centers around The Auchter Company, a general contractor that was responsible for constructing a condominium building in Jacksonville, Florida. The project suffered from multiple construction defects, including issues with sliding doors, windows, and balcony floors.

After a lengthy legal battle involving multiple parties, U.S. District Judge Anne Conway ruled that third-party insurers—Century Surety Company and Companion Specialty Insurance Company—were not responsible for covering the settlement owed by Amerisure Insurance Company.

Amerisure Liable for $8.5 Million Judgment

The dispute began when the condominium association, The Peninsula at St. John’s Center Condominium Association Inc., filed a construction defect complaint against Auchter. Auchter then turned to Amerisure Insurance Company for defense, but Amerisure refused to defend or indemnify the contractor.

“Community solar projects like the ones we’ve energized create jobs, reduce energy costs and help Maryland meet its energy needs,” said Shaun Keegan, CEO and co-founder of Solar Landscape. “Putting large solar installations on commercial rooftops is a smart, shovel-ready energy solution that also pays dividends to building owners.”

The case also involved subcontractor Blanchard Caulking and Coating Company, which was hired to furnish and install all damp proofing for the project. Blanchard carried general liability insurance policies that included coverage for completed operations. These policies were underwritten by Century Surety Company and Companion Specialty Insurance Company.

However, in a separate settlement, Blanchard agreed to pay $250,000 to resolve claims related to its work. This agreement also released Blanchard’s insurers from further claims tied to the project.

Years of Legal Disputes and the Final Ruling

The case spanned nearly a decade of legal disputes, including third-party claims by Auchter’s sureties against subcontractors. Ultimately, Auchter and the condominium association reached a multi-million-dollar settlement, with $1.8 million specifically allocated to damp proofing deficiencies.

Amerisure then sought to recover part of the settlement costs from Blanchard’s insurers, arguing that their policies should contribute to the payment. However, Judge Conway ruled that Blanchard’s previous settlement agreement protected its insurers from further claims, stating:

“Since the $8.5 million Auchter settlement was reached in 2021, Auchter had no rights against the third-party defendants when it was signed three years later.”

Backstory: Construction Issues and Financial Collapse

Auchter initially oversaw the project but was unable to financially complete the work after two years. The company handed over construction to Skanska USA Inc., which finished the project and secured a certificate of occupancy. However, subsequent inspections uncovered water leaks, missing fire seals, and other structural deficiencies throughout the building.

These defects led to the condominium association’s lawsuit against Auchter, prompting a protracted legal fight over who was financially responsible for the repairs and damages.

Impact of the Ruling

The ruling reinforces the finality of prior settlement agreements and limits the ability of insurers to shift liability after settlements have been reached. It also underscores the risks that general contractors and their insurers face when legal disputes arise over construction defects.

With the court siding against Amerisure, the insurer will now have to cover the entire $8.5 million judgment without seeking reimbursement from Blanchard’s insurers. The ruling brings closure to a complex case that has lasted for years, leaving Amerisure fully accountable for the settlement costs.

Originally reported by US Glass MAG.