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By David A. O’Neill, JD
Since damage to real property caused by poor workmanship is usually “neither expected or intended,” it may qualify as an “occurrence” under Colorado law construing commercial general liability policies and coverage may apply. Such was the ruling of the U.S. Tenth Circuit Court of Appeals in the case styled Greystone Const. Inc. v. National Fire & Marine Ins. Co., No. 09-1412 (10th Cir., Nov. 1, 2011).
The Greystone case was an appeal from the U.S. District Court of Colorado’s 2009 grant of summary judgment on the basis that homeowners’ allegations of faulty workmanship did not allege accidents amounting to covered occurrences under the contractor’s CGL policies. In that case, Greystone employed subcontractors to build two houses. The houses were built on soils containing expansive clays and over time, soil expansion caused the foundations to shift, causing extensive damage to the houses. The homeowners sued Greystone in 2005 asserting negligent design and construction by its subcontractors. Greystone tendered its claim to its insurers but one refused to defend. Greystone and its defending insurer brought suit against the non-defending insurer, seeking to recover a portion of the defense costs. Continue reading “Tenth Circuit Holds Faulty Workmanship Is Unforeseeable; Qualifies as “Occurrence” Under Colorado CGL Policies”