Attorneys for defendant Cincinnati Insurance have removed a complaint for declaratory judgment filed by plaintiffs Charter Homes Building Company and Charter Homes at Mill Creek Inc. from a court of common pleas to Pennsylvania Eastern District Court. The dispute stems from whether or not Cincinnati Insurance is obligated to defend the plaintiffs in a Lancaster County, Pa., lawsuit alleging construction defects in purchased homes at the Mill Creek development, including issues with window installation.

In October 2020, nearly 50 homeowners in the Mill Creek development in Pennsylvania filed suit against Charter Homes alleging construction defects in the homes they purchased. Pella Corp. is also named as a nominal defendant in the complaint for declaratory judgment.

“The Homeowner Complaint catalogs numerous alleged defects in different parts of the [homes] and the common areas, including issues with the stucco finish on the exterior of the buildings; the sheathing and framing used to build the exterior walls, the installation of windows … and numerous other issues,” reads a summary of the underlying litigation.

In November 2022, plaintiffs filed a motion for declaratory judgment with the court of common pleas seeking a declaration calling for Cincinnati Insurance to defend them in the homeowners’ lawsuit. The filing came as the insurance provider denied coverage, defense and indemnification for Charter Homes under its policy. Cincinnati Insurance contends that the alleged damage occurred in late 2019 or early 2020, with the associated policy expiring in October 2005.

“Contrary to Cincinnati’s position, a fair reading of the Homeowner Complaint establishes that there were likely one or more occurrences during the period between October 1, 2003, and October 5, 2005, when the Cincinnati policy was in effect,” the motion reads.

Cincinnati Insurance, among other arguments, petitions that Pennsylvania Eastern District Court is the proper venue for the dispute as the action involves citizens from different states: Ohio and Pennsylvania. Cincinnati also argues nominal defendants that are entities, such as Pella Corp., should be dismissed as they are not plaintiffs in the underlying action, nor do they have “conceivable interest in this action.”

In the event nominal defendants aren’t dismissed, Cincinnati still argues that Pennsylvania Eastern District Court has jurisdiction, as the interests of nominal defendants actually align with the plaintiffs and not Cincinnati.

“When properly aligned, removal is proper because there is complete diversity between defendant Cincinnati, a citizen of Ohio, and plaintiffs Charter Homes, Mill Creek, and the nominal defendants, none of whom are citizens of Ohio,” Cincinnati argues in court documents.

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