In Westfield Insurance Company v. Wensmann (Scott County District Court, 2013), general contractor Wensmann had constructed a small townhome development in Byron, Minnesota. Brick arches were built on the rear elevations of the units in the development, overlooking the adjacent golf course. During construction, it became apparent that the brick arch design was inadequate and the arches were failing. Diseworth hired an engineer, and an engineered solution was used for future arches.

In December 2010, years after construction ended, the association for the townhome development sued Wensmann for construction defects. The association’s allegations included the claim that the brick arches were cracked and deteriorating. Westfield Insurance Company was one of several insurers to insure Wensmann during the construction of the development, but the first Westfield policy did not begin until after Wensmann learned of the arch problems.

Deborah Eckland and Scott Johnson represented Westfield Insurance Company in a declaratory judgment action against Wensmann, arguing that the known loss doctrine barred coverage for the association’s claims because Wensmann knew of the arch problems before the inception of the initial Westfield policy. The district court agreed, ruling Westfield had no obligation to defend or indemnify Wensmann for any damages claimed by the association.