In Mock v. Allstate Ins. Co., 796 F. App'x 546 (10th Cir. 2020) (Colorado law), the Tenth Circuit Court of Appeals applied Colorado law in an opinion not reported in Fed Third:
{W]hether the undisputed flaw qualifies as faulty, inadequate, or defective design or construction is a legal issue. The statement of a legal conclusion is insufficient to create a material dispute of fact. [Citation omitted.]
The undisputed facts show that the manufacturer’s design of the EIFS system [exterior insulation finish system] caused water infiltration and damage. We are not presented with any authority for the proposition that a flawed design does not qualify as “faulty, inadequate or defective” merely because the problem was unknown to drafters of past building codes. And as Allstate notes, Colorado courts use the synonyms “flaw” and “defect” interchangeably.
Mock, 796 F. App'x at 550.
In the same case, the Tenth Circuit panel held that the bad faith claim actually advanced by the policyholder in that case did not legally exist because coverage was excluded in the first place, reaching the same result that the majority of courts have reached across the country. Mock, 796 F. App'x at 550. Moreover, the policyholders' unalleged, potential bad faith claim based on delayed payment was waived for appellate review. More to the point, the record showed that the policyholder did not make a potential bad faith claim in the court below in this case based on alleged delay in payment, and so the appellate court could not review a bad faith claim that was never made. Mock, 796 F. App'x at 550.
See generally Design/Construction Defect issues discussed by Dennis J. Wall in § 7:11 of CATASTROPHE CLAIMS: INSURANCE COVERAGE FOR NATURAL AND MAN-MADE DISASTERS (Thomson Reuters West November 2019, 2020 Supplements forthcoming).
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