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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. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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