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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. Such things are no more elections than those in the late, unlamented Soviet Union.

  2. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  3. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  4. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  5. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

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