A Delaware trial court found that the carrier properly denied coverage to a contractor who allegedly caused property damage due to faulty workmanship. Westfield Ins. Co., Inc. v. Miranda & Hardt Contracting and Building Serv., L.L.C., 2015 Del. Super. LEXIS 160 (Del. Super. Ct. March 30, 2015).
In 2004 and 2005, Miranda built a home pursuant to a contract with Fenwick Ventures, LLC. The homeowners purchased the home from Fenwick in 2006. In 2012, the homeowners contacted Fenwick to complain about defects in the home's construction. In 2014, the homeowners filed a complaint against Fenwick and Miranda.
The lawsuit alleged that during the construction of the home, Miranda used inadequate building materials, improperly installed building materials, violated building codes, and fraudulently represented that the home was properly constructed.
Westfield denied coverage and filed suit for a declaratory judgment that it had no duty to defend or indemnify. After Miranda answered, Westfield filed a motion for judgment on the pleadings.
The parties agreed that the underlying lawsuit alleged property damage. Westfield argued that there was no "occurrence." The only allegations against Miranda in the underlying lawsuit were for defective workmanship, so there was no occurrence. The trial court agreed that defective workmanship did not constitute an occurrence under a CGL policy because such action was within the control of the insured and not a fortuitous circumstance.