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Judges differ on if 'property damage' occurred

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A majority of Indiana Court of Appeals judges affirmed summary judgment in favor of a homebuilder's insurance provider, insurance broker, and subcontractor's insurer, ruling the damage to the homes wasn't "property damage" as covered by the insurance policies. The dissenting judge looked to other jurisdictions to support her belief the claims would be covered.

In Sheehan Construction Co., et al. v. Continental Casualty Co., et al., No. 49A02-0805-CV-420, Sheehan Construction and a class of homeowners whose homes were damaged allegedly by negligent Sheehan subcontractors appealed the affirmation of summary judgment in favor of Sheehan's insurer, Continental Casualty, Sheehan's insurance broker MJ Insurance, and a subcontractor's insurer, Indiana Insurance.

Continental brought an action seeking a declaration it wasn't obligated to indemnify Sheehan; Sheehan counterclaimed and filed complaints against Indiana Insurance and MJ Insurance.

The homes suffered water damage including leaks around windows, discolored carpet, mold, and decay of window frames, all caused by the subcontractors' faulty workmanship.

At issue in the appeal is whether the property damage falls under the Continental and Indiana insurance policies comprehensive general liability coverage for "property damage" caused by an "occurrence."

Judges Melissa May and Patricia Riley relied on Amerisure Inc. v. Wurster Const. Co. Inc., 818 N.E.2d 998 (Ind. Ct. App. 2004), and R.N. Thompson & Assn., Inc. v. Monroe Guar. Ins. Co., 686 N.E.2d 160 (Ind. Ct. App. 1997), in their affirmation of summary judgment for the insurers. These cases found damage to a construction project due to faulty workmanship or defective materials weren't considered "property damage" for purposes of CGL coverage.

Using the reasoning in R.N. Thompson - which held damage to a roof's plywood caused by excessive heat and moisture as a result of faulty workmanship was inseparable from the faulty workmanship - the damage to the homes in the instant case can't be treated as distinct from the underlying faulty workmanship that allowed the water penetration, wrote Judge May.

The majority also affirmed the trial court's holding that Sheehan's claim against MJ Insurance for negligent failure to procure insurance was barred by the statute of limitations.

Judge Elaine Brown used caselaw from Florida, New Hampshire, and Kansas to support reversal of summary judgment in favor of the insurers. In her dissent, she wrote there was a question of fact regarding whether Sheehan's claims are for "property damage" caused by an "occurrence." She would hold the type of damage suffered in the instant case may constitute "property damage," and that damage to property other than that installed by the subcontractors may constitute an "occurrence" under the policies.

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  1. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  2. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  3. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

  4. I am sorry to hear this.

  5. I tried a case in Judge Barker's court many years ago and I recall it vividly as a highlight of my career. I don't get in federal court very often but found myself back there again last Summer. We had both aged a bit but I must say she was just as I had remembered her. Authoritative, organized and yes, human ...with a good sense of humor. I also appreciated that even though we were dealing with difficult criminal cases, she treated my clients with dignity and understanding. My clients certainly respected her. Thanks for this nice article. Congratulations to Judge Barker for reaching another milestone in a remarkable career.

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