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Marc Brown & A. v. Concord Group Insurance Company

April 20, 2012

MARC BROWN & A.
v.
CONCORD GROUP INSURANCE COMPANY



The opinion of the court was delivered by: Dalianis, C.J.

a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme.

Argued: January 18, 2012

The plaintiffs, Marc and Laurie Brown, appeal an order of the Superior Court (McHugh, J.) granting summary judgment to the defendant, Concord Group Insurance Company (Concord Group), in the plaintiffs' insurance coverage action. We reverse and remand.

The following facts are taken from the record. In 2003, Eugene Spencer, the insured, built a house located at 4 Whortleberry Island in Tuftonboro. The plaintiffs purchased the house in 2005 from then-owner Michael Rogers. Two years later, in 2007, the plaintiffs discovered water leaking into the house near a sliding glass door. They contacted Spencer to repair the problem.

Spencer removed the exterior siding near the sliding door and discovered black mold. He also discovered what he thought was the source of the leak. He installed flashing on the windows near the leak, and applied bituthene to the exposed wall to protect it from ice and water. He then reinstalled the siding. It took him a total of four hours to complete the job and he charged the plaintiffs $1,000.

In the summer of 2009, the plaintiffs again observed evidence of water leaking into the house near the same sliding door. This time, they contacted Daniel Lewis to investigate the problem. Lewis removed all of the exterior siding near the relevant area and observed substantial water damage to the wood behind the siding, including damage to structural components. In a deposition, plaintiff Marc Brown testified that "the water was still getting into the wall. . . . [The water] was behind the ice and water shield, so [the wall] was staying wet as opposed to drying out." He also testified that the damage was caused by additional leaks that Spencer did not discover during his 2007 repair and that Spencer probably would have discovered those leaks if he had removed all of the siding on the wall. The damage required extensive repair work, costing the plaintiffs $16,205.

At all relevant times, Concord Group insured Spencer under a Commercial General Liability policy. Spencer's policy provides coverage for "property damage" caused by an "occurrence," which the policy defines as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." The policy, however, does not cover "'[p]roperty damage' to 'your work' arising out of ['your work'] or any part of ['your work'] and included in the 'products-completed operations hazard.'"

In 2010, the plaintiffs filed a petition for declaratory judgment, alleging that Spencer defectively repaired their house and that Concord Group is required to insure against the resulting damage. Concord Group filed a motion for summary judgment. The plaintiffs objected and filed a cross-motion for summary judgment.

The plaintiffs argued that the policy provides coverage because Spencer negligently repaired their house in 2007 and the damage in 2009 would not have occurred but for his negligence. Relying upon our case law, Concord Group argued that the property damage at issue was not caused by an "occurrence" because, regardless of whether the damage was to Spencer's 2003 original construction of the home or his 2007 repairs, "Spencer's defective work has not caused damage to property other than his work product." The plaintiffs disagreed, arguing that the damage at issue was to the 2003 completed work product and was caused by the 2007 negligent repairs.

Concord Group further argued that the "your work" exclusion bars recovery because any damage caused by Spencer's 2007 repair work was damage to "his work" - the original 2003 work on the construction of the house. The plaintiffs argued that the "your work" clause does not "combine both the initial construction and subsequent construction into one act." Thus, according to the plaintiffs, although the damage was to Spencer's previous 2003 work, it is not excluded under the "your work" clause because it was caused by Spencer's subsequent 2007 repair work, a separate act, distinct from his 2003 original construction of the house.

The court granted summary judgment in favor of Concord Group. The court first explained that it did not agree with the plaintiffs' interpretation of the "your work" exclusion.

The Court does not read the insurance policy as indicating that the first time a person performs construction constitutes "your work," and any subsequent work is not considered "your work." The plain language of the policy states that "your work" is "work . . . performed by you." There is no qualification on that language, or limitation on when that work must occur. Thus, both the work completed in 2003 and the 2007 repair constitutes [sic] "your work" under the policy, and are excluded from coverage absent any policy exceptions.

The court then stated that there was no evidence that the 2007 work caused the damage in 2009, and that the evidence indicated that the problem originated with the original 2003 construction. The court concluded that the damage was not covered by the "occurrence" provision because it was property damage to Spencer's work product.

On appeal, the plaintiffs reiterate the arguments they made in the trial court. "We review de novo the trial court's application of the law to the facts in its summary judgment ruling." Progressive N. Ins. Co. v. Concord Gen. Mut. Ins. Co., 151 N.H. 649, 652 (2005). We consider all of the evidence presented in the record, and all inferences properly drawn therefrom, in the light most favorable to the non-moving party. Id. "If our review of that evidence discloses no genuine issue of material fact and if the moving party is entitled to judgment as a matter of law, then we will affirm the grant of summary judgment." Id. ...


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