On August 22, 2025, Foran Glennon shareholders Matthew Ponzi and John Eggum obtained a complete defense verdict following a two-week trial in the United States District Court for the Central District of California, in downtown Los Angeles.
The case stemmed from a $57 million, 11-building luxury apartment construction project completed in 2021. The developer’s chosen contractor made serious errors constituting faulty and defective workmanship, including improperly sequencing the installation of millions of dollars worth of moisture-sensitive building components and materials in various parts of the complex. As a result, a significant amount of mold developed in approximately 60% of the apartments under construction, requiring an extensive and costly mold remediation project.
The project’s builder’s risk insurance policies, issued by a consortium of insurers led by a Lloyds of London market member, properly denied coverage for the loss, which was unavailable due to both an exclusion for mold, as well as a Costs of Making Good exclusion, which precluded coverage for the costs to rectify faulty workmanship. Although it was clear based on facts determined near the time of the loss that the mold stemmed from the contractor’s faulty workmanship, the developer still brought suit against the Insurers, seeking to recover substantial damages. The Insurers’ exposure at trial was in excess of $13 million.
After three years of litigation including a two week trial with an eight member Los Angeles jury, Matt and John defeated the breach of contract and bad faith claims asserted by the developer. The jury, via its special verdict, unanimously agreed found that both the mold exclusion and the Costs of Making Good exclusion applied to preclude coverage. It similarly found no coverage available under the policy’s coverage extension entitled Limited Coverage for Fungus and it found a complete failure to prove a covered delay under the Delay in Opening coverage provided by the Insurers’ policies. These findings also amounted to a rejection of the assertion that the denial of the claim was in bad faith. The developer recovered nothing and will be assessed and required to pay costs of the litigation.
Matt concentrates his practice in insurance coverage and commercial litigation, specifically in the analysis and litigation of commercial property, liability and reinsurance claims. Clients trust his extensive trial experience at both the federal and state level when faced with challenging litigation matters.
John litigates property insurance claims (including builder’s risk and energy claims) around the country, including in lawsuits where bad faith and claim handling disputes are at issue. In jury trials, bench decisions and other aspects of property litigation, he has established a strong track record of success for insurers facing significant contractual and extracontractual exposure. Additionally, he is a frequent speaker at insurance industry events, including on topics of, property loss causation, delay-in-startup measurement in the builder’s risk context, appraisal, and claim handling practices. He’s been recognized by various organizations for his work and leadership in the legal and insurance industries, including by The American Lawyer, which named him a Midwest Trailblazer, the Illinois Association of Defense Trial Counsel, the Chicago Daily Law Bulletin and Chicago Lawyer, Super Lawyers and Leading Lawyers.