Resolving a dispute on whether damage was limited to "that particular part of real property," the court found in favor of the insured for purposes of defending the claim. Nash St., LLC v. Main St. Am. Assur. Co., 2020 Conn. LEXIS 197 (Conn. Sept. 1, 2020).
Plaintiff's property needed repairs after being damaged by Hurricanes Sandy and Irene. Plaintiff contracted with New Beginnings to renovate the house, including site grading and foundation work. The required the house to be lifted and temporarily placed onto cribbing. While a subcontractor was lifting the house in preparation for the foundation work, the house shifted off the supporting cribbing and collapsed. At the time of the collapse, the only work being performed on the house was related to the lifting.
The plaintiff sued New Beginnings for property damage arising out of the collapse. New Beginnings tendered its defense to its insurer, Main Street, but a defense was denied. Plaintiff was awarded a default judgment in the amount of $58,007.
Plaintiff then sued Main Street under Connecticut's direct action statute, seeking recovery for the judgment against New Beginnings. Main Street relied upon exclusions k (5) and (6) to justify the denial of coverage. Exclusion k (5) precluded coverage for property damage to "that particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the 'property damage' arises out of those operations." Exclusion k (6) barred coverage for property damage to "that particular part of any property that must be restored, repaired or replaced because 'your work' was incorrectly performed on it."
The plaintiff argued that "that particular part" of the property on which the subcontractor was working was the site grading and foundation work underneath the house. New Beginnings was not performing any renovation work on the house itself. Main Street argued that "that particularly part" of the property on which the subcontractor was performing operations was the whole house because the whole house was being lifted. The trial court granted summary judgment to Main Street.
The Supreme Court reversed. There was no Connecticut appellate authority on how broadly Exclusions k (5) or (6) would be interpreted. It was possible the Supreme Court would decide that "that particular part" of the house on which the defective work was performed was only that portion underneath the house that was not properly supported. Therefore, Main Street was presented with a legal uncertainty with regards to its duty to defend. Because of such an uncertainty worked in favor of providing a defense to an insured, Exclusions k (5) and (6) did to relieve Main Street of its duty to defend New Beginnings. The judgment was reversed.
