United States District Court, D. New Hampshire
MEMORANDUM AND ORDER
Barbadoro United States District Judge.
declaratory judgment action concerns a commercial general
liability insurance policy issued by Patriot Insurance
Company (“Patriot”) to Holmes Carpet Center, LLC
(the “Carpet Center”). Patriot seeks a
determination that it has no duty to defend or indemnify the
Carpet Center in an underlying action asserting claims for
breach of contract and violation of New Hampshire's
Consumer Protection Act because the action seeks damages only
for uncovered defective workmanship. The matter is before me
on Patriot's motion for summary judgment.
The Insurance Policy
insurance policy at issue in this case provides in pertinent
part that Patriot “will pay those sums that the insured
becomes legally obligated to pay as damages because of
‘bodily injury' or ‘property damage' to
which this insurance applies.” Doc. No. 12-2 at 115,
§ I(1)(a). The policy goes on to explain that coverage
is available only if the “bodily injury” or
“property damage” is caused by an
“occurrence.” See Id. at 115,
§ I(1)(b)(1). An “occurrence, ” in turn, is
defined as “an accident, including continuous or
repeated exposure to substantially the same general harmful
conditions.” Doc No. 12-3 at 8, § V(13).
“Property damage” is further defined as
“[p]hysical injury to tangible property, including all
resulting in loss of use of that property” or
“[l]oss of use of tangible property that is not
physically injured.” See Id. at 9,
The Underlying Action
seeks a declaratory judgment that it has no duty to defend or
indemnify the Carpet Center in a suit filed against it by Red
Oak Apartments, LLC (“Red Oak”), in Hillsborough
County Superior Court. See Complaint, Red Oak Apartments, LLC v.
Holmes Carpet Center, LLC, et al., No. 216-2015-CV-00807
(N.H. Super. Ct. Nov. 11, 2016); see also Doc. No. 12-1 (copy
of state court complaint). The complaint in the underlying
action alleges that Red Oak, which owns and manages several
rental properties, hired the Carpet Center to install
Versalic vinyl plank flooring in approximately 195 of its
apartment units. Doc. No. 12-1 at 2. Red Oak purportedly paid
the Carpet Center more than $272, 000 for materials and labor
in connection with the flooring installation. Id.
Shortly after the Carpet Center completed its work, flooring
planks in several units began to shift and slide out of
place, creating large gaps between the planks. Id.
at 2-3. Red Oak notified the Carpet Center of the issue and
it subsequently performed repair work in some of the units.
Id. at 3. Red Oak, however, was ultimately
dissatisfied with the Carpet Center's remedial efforts,
and sued for breach of contract and violation of the New
Hampshire Consumer Protection Act, N.H. R.S.A. Chapter 358-A.
See Id. at 3.
underlying complaint alleges that the Carpet Center
“failed to complete the contract work in a workmanlike
manner in accordance with accepted flooring installation
practices . . . [and] failed, refused, and neglected to
repair the flooring in a good and workmanlike manner.”
Id. at 4. The complaint further alleges that the
Carpet Center “deceptively misrepresented the quality
and character of [its] services” in connection with the
flooring installation, in violation of Chapter 358-A.
Id. at 4-5. As a result, Red Oak claims it suffered
receiving the complaint, the Carpet Center submitted an
insurance claim to Patriot requesting a defense and
indemnification. Doc. No. 12 at 3. Patriot, in turn,
commenced the instant declaratory judgment action.
Anticipated Damage to Apartment Units, Due to Removal
of its supplemental briefing in this case, the Carpet Center
produced correspondence from Red Oak's counsel and its
retained expert “indicating that property damage is an
aspect of the underlying claim.” Doc. No. 24 at 2. Red
Oak's expert identified specific areas in the apartment
units that he anticipates will be damaged during the removal
of the vinyl flooring and its attendant components.
See Doc. No. 24-3. According to the expert, Red Oak
should “expect door jambs, baseboards and any vertical
surface between the moldings to be scrapped, scratched and
marred” during the removal process. See
Id. Such damage will apparently require spackling,
sanding, and painting to repair. See Id.
Expected damage to drywall will require similar repairs.
See Id. He further opined that, in most
cases, moldings will likely be “fractured, broken and
damaged beyond repair; requiring full replacement, priming
and painting.” See id.
STANDARD OF REVIEW
case concerns both Patriot's duty to defend and its duty
to indemnify. The duty to defend is broader than the duty to
indemnify: whereas the duty to indemnify arises only when the
insured is actually liable, the duty to defend turns on the
nature of the allegations against the insured. ...