Union Insurance Company and Chuck Hamilton Construction, Inc. v. Auto-Owners Insurance Company

── Union Insurance Company and Chuck Hamilton Construction, Inc. v. Auto-Owners Insurance Company ── Court: Court of Appeals of Arkansas Date: March 11, 2026 Category: General Cite as 2026 Ark. App. 166 ARKANSAS COURT OF APPEALS DIVISION IV No. CV-25-104 UNION INSURANCE COMPANY AND Opinion Delivered March 11, 2026 CHUCK HAMILTON CONSTRUCTION, INC. APPEAL FROM THE PULASKI APPELLANTS COUNTY CIRCUIT COURT, FIFTH DIVISION [NO. 60CV-20-2309] V. HONORABLE LATONYA AUTO-OWNERS INSURANCE HONORABLE , JUDGE COMPANY APPELLEE AFFIRMED RAYMOND R. ABRAMSON, Judge Union Insurance Company (Union) and Chuck Hamilton Construction, Inc. (Chuck Hamilton), appeal the Pulaski County Circuit Court order entering summary judgment in favor of Auto-Owners Insurance Company (Auto-Owners). We affirm. This case involves an insurance-coverage dispute. Union insured Chuck Hamilton under a commercial general-liability policy. Chuck Hamilton is a general residential building contractor, and in February 2010, Chuck Hamilton contracted with Kristen and Cliff Lee to remodel their house in Little Rock. In December 2010, Chuck Hamilton contracted with Freddie Cobbs d/b/a Cobbs Stonework (Cobbs) to perform stonework and masonry on the Lees’ house. Cobbs had a commercial general-liability policy with Auto-Owners.  In the summer of 2012, Chuck Hamilton completed the construction of the Lees’ house. However, on June 6, 2017, in a proceeding separate from this case, the Lees filed suit in circuit court against Chuck Hamilton alleging claims of breach of contract, breach of express warranty, and breach of implied warranty. They claimed the following: -The construction of the rock veneer around all new additions and new construction on the residence is causing moisture and mold damaging the structure. -The mortar in the rock driveway is popping out and the edges are breaking apart. -The rock patio around the pool has similar issues, and the rock pavers have voids under them indicating poor adherence -Poor installation of pool house roof decking and placement of insulation is causing vaulted ceiling wood veneer to sweat and warp. After the Lees filed their complaint, Chuck Hamilton moved to compel arbitration as set forth in its contract with the Lees, and the case proceeded to arbitration. During the separate proceedings with the Lees, by written letters, Chuck Hamilton and Union demanded that the Cobbs and Auto-Owners defend, indemnify, and hold them harmless from any further expense and liability from the Lees’ claims. They asserted that Cobbs’s stonework was at issue and had caused the Lees’ damages. However, Cobbs and Auto-Owners did not participate in the proceedings with the Lees. On December 9, 2019, Union and Chuck Hamilton settled with the Lees for $750,000. On March 24, 2020, Union and Chuck Hamilton filed a complaint against Cobbs and Auto-Owners, which is the complaint that gave rise to this appeal. They alleged that Chuck Hamilton was an additional insured in Cobbs’s policy with Auto-Owners and that 2 Auto-Owners had breached its duty to defend and indemnify Chuck Hamilton in the proceedings with the Lees. They asserted that Cobbs and Auto-Owners are liable for Cobbs’s pro rata apportionment of fault for the Lees’ damages as well as the amount of reasonable and necessary defense costs. They alleged claims for breach of contract, implied indemnity, and contribution against both Auto-Owners and Cobbs and for negligence against Cobbs. Concerning the negligence claim, they asserted that Cobbs’s negligence in performing stonework and masonry on the Lees’ house was the sole and proximate cause of the damages they incurred and gave rise to the Lees’ claims against Chuck Hamilton. On April