An employee of a construction subcontractor was injured on the job. He sued the general contractor. The general contractor was insured by Merchants Insurance Company. It was also an additional insured on a policy issued by USF&G to the subcontractor, but, under the additional insured endorsement, “only with respect to liability arising out of” the subcontractor’s work for the general contractor."
Merchants defended and settled the case, and then sought contribution from USF&G. USF&G refused to contribute. Attorney Kallen successfully represented Merchants in the United States District Court for the District of Massachusetts and then on appeal to the United States Court of Appeals for the First Circuit. In Merchants Insurance Company of New Hampshire, Inc. v. United States Fidelity & Guaranty Co., 143 F.3d 5 (1st Cir. 1998), the court adopted Attorney Kallen’s argument that even though the accident was caused solely by the negligence of an employee of the general contractor, it still “arose out of” the subcontractor’s work for the general contractor.
A masonry subcontractor worked on the construction of a school. After construction was completed, the owner sued the general contractor, alleging that faulty workmanship allowed water leakage that caused property damage to the school building. The general contractor brought a third-party complaint against the masonry subcontractor, alleging that all damages were due to the subcontractor’s defective work. The subcontractor sought insurance coverage from Public Service Mutual Insurance Company (PSM). PSM denied the claim and the subcontractor sued it.
Attorney Kallen assisted the attorney hired by PSM throughout the lawsuit and was the attorney of record on appeal. She convinced the United States District Court for the District of Massachusetts and then, in B&T Masonry Construction Co., Inc. v. Public Service Mutual Insurance Co., 382 F.3d 36 (1st Cir. 2004), the United States Court of Appeals for the First Circuit, that business risk exclusions excluded coverage because the damage was to the building itself. She successfully overcame the arguments of the subcontractor that summary judgment should be denied because it was unclear from the allegations of the complaint whether the plaintiff subcontractor or another subcontractor caused the damage, and that the business risk exclusions rendered coverage illusory.