In Liberty Insurance Corp. v. HNTB Corp., Case No. 22-3301 (8th Cir. Dec. 5, 2023), the Eighth Circuit reversed a lower court that had ruled in a construction company’s favor and asked that it reconsider whether a Liberty Mutual Insurance Group unit was liable for coverage of a highway bridge deck’s collapse during construction. The litigation concerned a construction project that involved lowering a bridge deck onto abutments to improve a stretch of highway in Corona, California. Water became trapped in the deck, which caused it to fall, resulting in serious injuries to workers.
An engineer from Kansas City, Missouri-based HNTB was onsite when the accident happened and, according to the injured workers, was responsible for inspecting the bridge deck, which should have revealed the water trapped inside, the ruling said. After workers sued HNTB in state court, Liberty Mutual and a professional liability insurer (the policy was issued by Lloyd’s underwriters) initially agreed to split the cost of the defense.
Eventually, Liberty determined there was no coverage for the accident under its policy’s construction management and professional liability exclusions. HNTB, without Liberty’s involvement, settled the case for $2.5 million. Liberty filed a DJ action claiming that it was not liable for the settlement, and HNTB filed a counterclaim.
The District Court granted partial judgment to HNTB and was overturned by the 8th Circuit. “Under the terms of HNTB’s policy, Liberty’s obligation to pay depends on the focus of the workers’ lawsuit,” the panel said. One excluded activity is construction management, which includes supervisory or inspection activities “performed as part of any related architectural or engineering activities.” “Whether HNTB’s work on the project included those types of specialized activities is the main point of contention,” the ruling said.
The workers’ theory, which Liberty adopted, was that HNTB had a contract to perform both construction management services and independent quality assurance, the ruling said. “Evidence backs up this theory,” the ruling said. “With coverage hanging on the resolution of a factual dispute over HNTB’s role on the bridge project, summary judgment is unavailable,” it said, in remanding the issue for further proceedings.