EAST ST. LOUIS - An insurance company argues that it does not owe a duty to reimburse homeowners for repair work after a construction company allegedly failed to complete home renovations and that it is not required to defend the insureds against defamation claims.
Shelter Mutual Insurance Company filed a federal lawsuit in the U.S. District Court for the Southern District of Illinois against Daniel Corey, Teresa Corey and Phil Kayser, doing business as Kayser Construction, alleging the defendants do not have coverage for defective or incomplete work.
According to the lawsuit, Shelter Mutual Insurance insures the Coreys. The Coreys allegedly filed a complaint against Kayser Construction in the Madison County Circuit Court on May 30, 2019, seeking damages for breach of contract and consumer fraud. The Coreys allege in the underlying lawsuit that Kayser Construction performed defective work at their home.
The Coreys claim in their underlying lawsuit that a garage floor was poured so that water flows toward their home rather than away from their home. They also claim there was damage to the walls of the home during the installation of plumbing and electrical as part of the remodel, which was repaired before reporting the damage to Shelter Mutual Insurance. The Coreys allege heavy equipment utilized by the contractors put ruts in the yard, which were also repaired before the issue was reported to the insurer. Further, the Coreys claim that 12 new windows were installed but were not trimmed, which has since been corrected, the suit states.
Then on June 28, 2019, Kayser Construction filed a counterclaim against Daniel Corey, alleging breach of contract and defamation.
The counterclaim alleges Corey failed to pay for work according to the contract and "approached others who have dealt with Kayser in a business capacity and stated to those individuals that Kayser committed fraud, and that Kayser failed to pay his subcontractors, all statements being detrimental to Kayser in his business/professional capacity."
On Oct. 11, 2021, Daniel Corey placed Shelter on notice of the underlying litigation. The Coreys asked Shelter to provide reimbursement for costs paid to finish the incomplete or improper work.
Shelter Mutual Insurance claims it does not owe a duty to cover the insureds' claims for reimbursement. It also alleges it does not have a duty to defend Daniel Corey against Kayser Construction's counterclaim, because the counterclaim does not allege property damages, bodily injury or an accident.
Shelter Mutual Insurance asks the court to issue an order finding and declaring that it does not owe a duty to defend or indemnify the Coreys against the counterclaim in the underlying litigation. Shelter Mutual Insurance Company is represented by Peter G. Syregelas of Lindsay Pickett & Postel LLC in Chicago.
U.S. District Court for the Southern District of Illinois case number 3:22-cv-00068