The federal district court found there was no coverage for alleged defects caused by the insured homebuilder. Canal Indem. Co. v. Carbin, 2017 U.S. Dist. LEXIS 126662 (N.D. Ala. Aug. 10, 2017).
Carbin Construction filed suit against Aaron and Sherry Ford, asserting mechanic's and materialman's liens, and seeking sums allegedly due for work performed under a construction contract. The Fords filed a counterclaim, alleging that over a year had passed since Carbin was to complete construction, and that Carbin refused to do any further work on the house until he was paid an additional $11,771.43. The Fords further contended that Carbin had walked off the job after receiving 96.6 percent of the money owed under the contract although only 88 percent of the construction work had been completed. Carbin tendered the counterclaim to Canal. Canal then filed suit seeking a declaration that it had no duty to defend.
Under Alabama law, "accident" meant an unintended and unforeseen injurious occurrence, or something that did not occur in the usual course of events or that could have been reasonably anticipated. Carbin argued that its actions were not done with expectation or intent of injury. Carbin submitted it did not intend or expect the fixed price of the contract to be changed, but the Fords made oral modifications to the allowances, choosing expensive upgrades in excess of the allowances. The court found these arguments unavailing because the contract's express provisions regarding changes or upgrades affecting the final price and timely payment for such modifications showed that, where these events may have been unexpected, they were not unforeseeable.
Carbin also contended that its actions were unintentional and therefore an accident. But Carbin left the site before finishing the home because of monetary disputes with the homeowners. Regardless of whose fault it was, the builder's abandonment of the project was still an intentional act.
Therefore, the Fords' alleged injuries did not arise out of bodily injury or property damage caused by an accident. Accordingly, Canal's motion for summary judgment was granted.
