Texas Judge Rejects Insurer’s Bid to Apply EIFS Exclusion, Stays Coverage Action

SAN ANTONIO — A federal judge has ruled that an Exterior Insulation and Finish Systems (EIFS) exclusion does not bar coverage of a lawsuit that Texas homeowners brought against a homebuilder alleging damage caused by allegedly defective stucco.

Responding to a motion for default judgment filed by Catlin Specialty Insurance Co., U.S. Dist. Ct. Judge Xavier Rodriguez said April 18 that because plaintiffs in the underlying case also allege damage caused by latent defects unrelated to the stucco, the EIFS exclusion may not apply. The judge also noted that the alleged damage could have been caused by traditional stucco, …