United States District Court, D. Maryland
Xinis United States District Judge
in this insurance action are Plaintiff's and
Defendant's cross-motions for summary judgment (ECF Nos.
6, 33). The issues are fully briefed and the Court now rules
pursuant to Local Rule 105.6 because no hearing is necessary.
For the reasons stated below, Defendant's motion is
granted and Plaintiff's motion is denied.
following facts are undisputed. James McHugh Construction
Company (“Plaintiff”) was selected to be the
general contractor for the construction of a high-rise
apartment building at 360 West Hubbard in Chicago, Illinois.
Pl.'s Resp. to Undisputed Facts, ECF No. 36-1 at 2-3. 360
West Hubbard Joint Venture LLC, as the owner of the project,
purchased an insurance policy from Defendant Travelers
Property Casualty Company of America
(“Defendant”) covering Builders Risk and Inland
Marine risks for 360 Hubbard. See Insurance Policy,
ECF No. 31-2. The insurance policy contains a blanket named
insured endorsement and names all contractors, including
Plaintiff, as named insureds on the Policy. Pl.'s Resp.
to Undisputed Facts, ECF No. 36-1 at 19. The insurance policy
also contains a broad form insuring agreement, which states
that all loss to the project is covered except for those
claims which are excluded:
We will pay for direct physical loss of or damage to Covered
Property from any of the Covered Causes of Loss . . . .
Covered Causes of Loss means RISKS OF DIRECT PHYSICAL LOSS OR
DAMAGE except those causes of loss listed in the Exclusions .
. . .
Policy, ECF No. 31-2 at 23 (emphasis in original).
fall of 2013, tenants began moving into the 360 West Hubbard
building, and so the project owner requested Plaintiff to
clean the exterior glass windows. Pl.'s Resp. to
Undisputed Facts, ECF No. 36-1 at 5. Plaintiff engaged a
subcontractor, Corporate Cleaning Services, Inc.
(“CCS”), to clean the exterior glass.
Id. The subcontract between Plaintiff and CCS
describes CCS's scope of work as all “Exterior
Window Washing.” Specifically, the subcontract states:
limiting the generality of [the term “Exterior Window
Washing”], the following items are specifically
1. Exterior washing of windows and surrounding frames.
2. Protection of all existing finishes from damage during
3. Rubbish removal to dumpsters provided by others.
4. Daily cleanup, including load out of debris to dumpsters
provided by the Contractor.
5. Cooperation and coordination with all project personnel
and other trades.
6. Coordination with all agencies having jurisdiction over
7. All applicable taxes.
CCS-McHugh Subcontract, ECF No. 31-4. CCS was tasked with
removing both dirt and “construction debris” that
had settled on the window surfaces during the construction
process. Construction debris includes dried mortar, concrete,
cement, and paint. Pl.'s Resp. to Undisputed Facts, ECF
No. 36-1 at 7. The construction debris on the exterior glass
could not be removed using standard cleaning methods,
Id. at 8, so CCS removed the debris using a metal
scraper or similar tool. Id. at 12. CCS failed to
follow industry standards when removing debris from the glass
designed to eliminate or reduce the risk of damaging glass.
see Id. at 12-17 (“McHugh believes that CCS
failed to properly execute its work method because it was not
in conformance with the Subcontract and all applicable
industry standards.”). As a result, the glass surfaces
scratched windows were rejected by the building's owner
and thus Plaintiff was forced to incur the costs of repairing
and replacing the scratched windows. Pl.'s Mot. Sum.
ECF No. 31 at 3. Plaintiff reported the loss and claim to
Defendant. On July 15, 2014, Defendant denied the claim. The
sole basis for Defendant's denial was Exclusion
B(3)(d)(2) in the insurance policy for “Omission or
faulty, inadequate or defective: Materials, workmanship or
maintenance.” Def.'s Rejection Letter, ECF No.
31-3. The insurance policy's exclusion clause states, in
1. We will not pay for loss or damage caused directly or
indirectly by any of the following. Such loss or damage is
excluded regardless of any other cause or event that
contributes concurrently or in any sequence to the loss or
3. We will not pay for loss or damage caused by or resulting
from any of the following. But if loss or damage by a Covered
Cause of Loss results, we will pay for that resulting loss or
d. Omission in, or faulty, inadequate or defective:
(2) Materials, workmanship or maintenance.
Policy, ECF No. 31-2 at 30-32. According to Defendant,
CCS's cleaning of the windows is “considered
faulty, inadequate or defective maintenance” under the
policy. Def.'s Rejection Letter, ECF No. 31-3.
February 5, 2016, Plaintiff filed a complaint in the Circuit
Court for Montgomery County alleging breach of contract and
seeking a declaratory judgment that Plaintiff's claim is
covered by the insurance policy. ECF No. 2. On April 13,
2016, Defendant timely removed the case to this Court based
on diversity of citizenship pursuant to 28 U.S.C. §
1332. ECF No. 1. That same day, Plaintiff filed a motion for
summary judgment. ECF No. 6.
August 1, 2016, Plaintiff filed an amended memorandum in
support of its motion for summary judgment. ECF No. 31. It
argues that it prevails as a matter of law because the
“faulty workmanship” exclusion, which served as
the sole basis for Defendant's denial of Plaintiff's
claim, is ambiguous and the ambiguity should be resolved in
favor of Plaintiff as the insured. Plaintiff's position
is that the term “faulty workmanship” does not
cover the damage caused by CCS. ECF No. 31 at 2. And even if
this Court finds that Defendant has met its burden in proving
the faulty workmanship exception applies, the “ensuing
loss” exception to the faulty workmanship exclusion
applies to Plaintiff's loss, and thus policy covered the
loss. Defendant filed a cross-motion for summary judgment on
August 15, 2016. ECF No. 34. It argues that the faulty
workmanship exclusion justifies its denial of Plaintiff's
claim and that the ensuing loss exception does not apply.