Westfield Insurance v. Sheehan Construction Co.

EASTERBROOK, Chief Judge.

Sheehan Construction Co. was the general contractor for the Crystal Lake resi dential subdivision in Indianapolis. A few years after moving in, the owners began to notice moisture in places that should have been dry. An investigation traced the problem to defective work by one of Sheehan’s subcontractors. Litigation in state court ended with a settlement of about $2.8 million. Sheehan wants its insurer, Westfield Insurance Co., to indemnify that expense. (The settlement assigned to the homeowners Sheehan’s rights in the policy, but for simplicity we refer to Sheehan.)…