Tred R. Eyerly – April 3, 2013
The federal district court predicted that the Utah Supreme Court would find that damage to property other than the insured’s work product is unexpected and arises from an occurrence. Cincinnati Ins. Co. v. AMSCO Windows, 2013 U.S. Dist. LEXIS 15999 (D. Utah Feb. 5, 2013).
The insured, AMSCO Windows, installed windows in new homes constructed in Nevada. A number of homeowners asserted claims against the contractors who built their homes, alleging numerous construction defects, including the windows, and that the defects caused property damage to their homes. The contractors, in turn, asserted claims against AMSCO.
The insurer, Cincinnati Insurance Company, filed for a declaratory judgment that it had no duty to defend or indemnify AMSCO. AMSCO filed a motion for summary judgment, contending that the claims against AMSCO alleged “occurrences”, triggering a duty to defend.
The federal district court surveyed Utah cases. The cases demonstrated that the fact that injury or damage may be the foreseeable consequence of the insured’s own negligence did not foreclose a finding that such injury or damage was accidental, and resulted from an “occurrence.” Utah cases held that the test was not whether the result was foreseeable, but whether it was expected. Therefore, the federal district court predicted that the Utah Supreme Court would hold that where defective workmanship causes damage to property other than the work product itself, that such damage results from an accidental “occurrence” within the meaning of CGL policy language.