The Aldredge development was built by John Wieland Homes; in 2016, Atlanta-based Pulte purchased its assets, including the Peachtree Road development which hosts 24 units in five buildings.

In late 2016, according to court filings, some homeowners started to complain about water intrusion, floor deflection and other issues; upon inspection, Pulte also allegedly discovered problems with framing, masonry and other "construction related" issues.

In 2019, Pulte filed the first of its lawsuits. Its amended complaint alleged it had and would spend "millions of dollars" remediating defective flooring, drywall, sheathing, brick veneer, paint and more.

That complaint—filed by Simon Bloom, Ryan Pumpian and Robert Mulhollen Jr. of Bloom Parham—claimed the contractors had signed contracts with John Wieland, including provisions to indemnify it for any damages or losses relating to their work.

When Pulte purchased John Wieland's assets, it was also assigned "all of [John Wieland's] rights under its agreements with the vendors who were performing services and/or supplying materials at Aldredge," the complaint claimed.

In 2020, Pulte separately sued 18 insurers for the defendant contractors for claims including declaratory judgment, breach of contract and bad faith failure to pay.

The complaint and amended complaint remain sealed, but the pleadings indicate that Pulte is seeking more than $15 million form the various insurers for repairs to the buildings.

The general counsel for one defendant, Builders Insurance Group, said the issue is not new, particularly for Pulte.

"This comes up a lot," said Builders' GC Stephen Berry. "It's a recurring issue where Pulte gives all these contractors and artisans a hard time and tried to say, 'They left us with all these problems we had to fix,' then they send us a bill later."

"There are two big issues in this case," Berry added. "The first is Pulte's unilateral decision to proceed with repairs, which violates the 'late notice' and 'voluntary payments' conditions in the policies.

"The other issue that makes this interesting is that Pulte is seeking the status of an additional insured on the subcontractors' policies.

"There are a couple of problems with that," he said. "Many of the policies at issue provide 'additional insured' status only for ongoing operations, but the damages in this case were noticed after work was complete and certified.

"Pulte argued that problems started before the project was completed, but was unable to present an issue of fact avoiding summary judgment," Berry said.

Then there's the voluntary payment clause, he said, which forbids a party from seeking indemnification from an insurer for payments it volunteered to make.

"Pulte went ahead and fixed what it said were all these problems, then told the subcontractors' insurers they had to pay to fix them," Berry said. "They told the court it was an emergency, but it took them two years to do it."

Lead defense counsel Bloom did not respond to requests for comment about the case, nor did media contacts for Pulte.

A Who's Who of insurance litigation lawyers and firms are represented among the defense lawyers, and multiple defendants filed motions to dismiss and/or judgment on the pleadings.

In June, Kell granted those motions for Builders, Ohio Security Insurance, Main Street American Assurance, Grange Insurance, Specialty Insurance and Nationwide Mutual Insurance.

In similar orders for each, Kell wrote that Pulte was not an additional insured under the subcontractors' contracts.

"A policy that protects the insured from liabilities owed to third parties does not protect the insured from its own losses," Kell wrote.

Pulte accepts that it cannot be an additional insured for purposes of its claims … but seeks to characterize its claim as based on warranty claims owed to homeowners."

Even if that were so, "Pulte's characterization of its claims as amounts owed to the homeowners under a warranty does not transform Pulte's first-party claims into third-party claims for which it could be covered as additional insured claims," Kell said.

Pulte also breached its duty to notify the insurers "as soon as practicable" of an incident or claim. "An unreasonable delay in notifying an insurer of a claim or occurrence voids coverage under the policy," the judge wrote.

"Additionally, an insured's failure to secure the insurer's consent to payments and expenses related to the claim renders those payments voluntary such that it cannot seek reimbursement from the insurer."

Pulte's bad faith claims also failed, since it was not an additional insured.

"Moreover, even if Pulte had been an additional insured, the only bad faith claim it made was dated … two weeks after it commenced this lawsuit," Kell noted. "As such, the demand would not constitute the required presuit demand for payment."

On Aug. 16, Pulte's lawyers filed a notice for voluntary dismissal and a consent to entry of final judgment in favor of the half-dozen insurance companies that were dismissed in June.

"This was a victory for Georgia homebuilders," said Berry. "These big nationwide homebuilders try to bully these subcontractors and their insurers, and if successful it's the small guys who really get hurt, because it goes on their loss history and costs them more when they renew their policies."