Insurance Law Hawaii

We Hit Eleven Years of Blogging

  Insurance Law Hawaii hit eleven years of blogging last week. We started in December 2007, 1251 posts ago. Blogging has served as a invaluable self-education on multiple coverage issues in an effort to keep abreast of the constantly changing landscape. We hope readers have found the posts to be useful and informative.

      As we head into our twelfth year, thanks hanks also to you, the readers, for your support and interest again this year. On to another year of blogging in 2019.

Claims Against Agent Rejected

    The court granted the agent's motion for summary judgment, rejecting the insureds' claim that he negligently failed to obtain snow-ice coverage for two new chicken houses. Slaubaugh Farm, Inc v. Farm Family Cas. Ins. Co., 2018 Del. Super. LEXIS 1144 (Del. Super. Ct. Oct. 29, 2018). 

    The plaintiffs purchased a farm in 1998 and secured a property policy through Joseph McGowan, an insurance agent for Farm Family. Farm Family issued a Notice of Cancellation of the policy because plaintiffs failed to comply with its request for an inspection of two chicken houses on the farm. After a severe winter in which many chicken houses were damaged, Farm Family non-renewed all of its chicken business in the region. Coverage in the future would be provided only under a Peril Group 4 policy and an inspection of the buildings before issuance of the policy. 

    In 2015, the plaintiffs informed McGowan that they intended to build two new chicken houses and again requested coverage from Farm Family. Plaintiffs also requested confirmation of the insurance coverage be sent to the mortgage company. Plaintiffs did not request any specific coverage. McGowan prepared an application and submitted it to Farm Family. McGowan also submitted a binder request to Farm Family for coverage of the two chicken houses. Farm Family approved the binder request under Peril Group 4 subject to an inspection. A copy of the binder was emailed to the mortgage company.

    McGowan's office was responsible for scheduling new chicken houses for inspection. An inspection was requested, but Family Farm never inspected the two new chicken houses. Six months later, a blizzard caused one of plaintiffs' new chicken houses to collapse. Coverage was denied and plaintiffs sued Family Farm and McGowan. McGowan moved for summary judgment.

    The court first determined there was a genuine issued of material fact as to whether McGowan had a duty to obtain snow-ice coverage for plaintiffs. The court further denied the motion regarding McGowan's duty to ensure that the inspection of the new chicken houses took place. If McGowan had inquired about the status of the inspection, and communicated that to the plaintiffs, then the plaintiffs could have decided to continue seeking coverage from Family Farm or pursued coverage from another insurer. 

    McGowan's final argument was that plaintiffs had to show that his alleged negligence was a proximate cause of their injury. This meant plaintiffs had to show there was snow-ice coverage that was commercially available for their loss. The court agreed it was too speculative to conclude that Farm Family, or any other insurance company, would have provided snow-ice coverage to plaintiffs had an inspection been conducted. The plaintiffs could have presented testimony and information on the availability of such coverage, but failed to do so. 

    Therefore, McGowan's motion for summary judgment was granted. 

Anti-Concurrent Causation Clause Preserves Possibility of Coverage

    The policy's anti-concurrent causation clause preserved the possibility of coverage when the insurer's motion for summary judgment to disclaim its indemnity obligation for damage caused by Hurricane Sandy was overturned by the Second Circuit. Madelaine Chocolate Novelties, Inc. v. Great Northern Ins. Co., 2018 U.S. App. LEXIS 29821 (Oct. 23, 2018 2nd Cir. )

    In 2012, Madelaine Chocolate suffered significant damage to its business due to storm surges created by Hurricane Sandy. Madelaine Chocolate had an "all-risk" policy issued by Great Northern. Madelaine Chocolate filed a claim for property damage of approximately $40 million and business income loss and extra operation expenses of $13.5 million. Great Northern denied most of the claim, reasoning that the storm surge damage was excluded under the policy.

    The policy included a Windstorm Endorsement which defined "windstrom" as  "wind" or "wind-driven rain . . . which contributes concurrently to or contributes in any sequence to the loss or damage, even if such other cause or event would otherwise be covered." Therefore, the Windstorm Endorsement contained its own anti-concurrent causation (ACC) clause. Madelaine Chocolate interpreted the Windstorm Endorsement, particularly its ACC clause, to encompass losses caused by storm surge, a wind-driven peril.

    Great Northern, however, denied coverage based upon the policy's flood exclusion provision, which stated the insurance did not apply to loss or damage caused by "waves, tidal water or tidal waves" which "contributes concurrently to or contributes in any sequence to the loss or damage, even if such other cause or event would otherwise be covered." Therefore, the parties disputed whether storm surge damage was excluded from coverage under the Flood Exclusion in light of the Windstorm Endorsement's ACC clause. The district court granted summary judgment to Great Northern, finding that the Flood Exclusion unambiguously excluded storm surge damage from coverage under the policy. 

    The Second Circuit vacated the district court's judgment and remanded for further proceedings. The district court was instructed to assess whether the Windstorm Endorsement's ACC clause conflicted with or otherwise created an ambiguity due to the policy's Flood Exclusion. It was suggested that the district court may wish to permit discovery into interpretive materials relating to the Windstorm Endorsement and its relationship to the policy's coverage provisions. 

Connecticutt Class Action on Collapse Claims Faces Motion to Dismiss

    The federal district court dismissed some insurers from a class action suit alleging failure to provide coverage for collapse claims. Halloran v. Harleysville Preferred Ins. Co., 2018 U.S. Dist. LEXIS 179807 (D. Conn. Oct. 19, 2018).

    A class of homeowners brought suit in 2016 against their homeowners insurance companies ("defendants") for failure to cover collapse claims. Plaintiffs alleged they bought their homes between 1984 and 2015. Each of the homes had basement walls that were "crumbling and cracking due to the oxidation of certain minerals contained in the concrete." As a result of the deteriorating concrete, plaintiffs claimed that their basement walls were in a state of collapse. 

    Plaintiffs alleged that the Insurance Services Office, Inc. ("ISO") and the insurance companies were aware of the concrete issues in Connecticut at least as early as 1996, when claims began to be filed. Defendants and the ISO deliberately changed their policies' definitions of "collapse" to try to avoid or minimize liability for potential claims brought by plaintiffs. The new language excluded losses to a foundation or retaining wall and "settling, cracking, shrinkage, bulging or expansion" from coverage of collapse. 

    The standard policy language produced by the ISO and adopted by the insurers went through several iterations between 1990 and the present. Originally, the coverage provided for the "direct physical loss to covered property involving collapse of a building  . . ."  The term "collapse" was undefined.

    In 1999, ISO language allegedly changed and defined collapse as "an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its current intended purpose." Further, a building "in danger of falling down or caving in" or that "is standing" is "not considered to be in a state of collapse." Plaintiffs alleged that each defendant changed the language of their policies over time and that these changes attempted to delete coverage.

    The defendants moved to dismiss the fourth amended complaint. The court looked at specific policy language to determine whether the term "collapse" was ambiguous. The first set of claims submitted by plaintiffs arose under language adopted by the ISO in 1997. The policies provided for coverage of "direct physical loss to covered property involving collapse of a building or any party of a building" when the result of several different causes, such as "hidden decay," "use of defective materials," etc. Prior Connecticut cases had found the term "collapse" in these policies to be ambiguous. Plaintiffs with claims arising under the older policy language therefore properly alleged a "collapsed" that could be covered under the policies. 

    Plaintiffs who alleged that their policy included collapse provisions without temporal modifiers such as "abrupt" also survived a motion to dismiss because the policy language was sufficiently ambiguous.

    A second category of policies also included temporal modifiers, requiring the collapse to be "abrupt' and the building to be unusable for its normally intended purposes. Still other policies required the collapse to be "sudden and accidental." Under these policies, the "collapse" provision was not ambiguous, requiring a "sudden" collapse. The defendants' motion to dismiss was granted as to these policies. 

    The third category of policies, over time, adopted more restrictive language. The motion to dismiss as to these policies was denied. There remained issues of fact and law as to whether the insurers were obligated to notify the insureds of changes in the policy definition of collapse and whether the insurers did so. 

    Defendants also moved to dismiss plaintiffs' claims for breach of he implied covenant of good faith and fair dealing. Because several plaintiffs had not pled a plausible claim for breach of contract, their claims for breach of the implied covenant of good faith and fair dealing also failed. For plaintiffs who survived dismissal of their breach of contract claims, however, the motion to dismiss the breach of the implied covenant of good faith and fair dealing was denied. Plaintiffs alleged that defendants knew that plaintiffs' claims were covered. Further, defendants misled plaintiffs in order to receive their premiums without providing the requisite coverage. 

    Finally, the arguments of certain defendants to strike the class allegations was denied. The issues would be better addressed when the motion for class certification was considered, after more development of the record in the case. 

    

    

Full Coverage Extended for Loss of BitCoin

    The Court of Common Pleas in Ohio determined that BitCoin was property and denied the insurer's motion for judgment on the pleadings seeking to establish there was limited coverage for the loss. Kimmelman v. Wayne Ins. Group, 2018 Ohio Misc. LEXIS 1953 (Ohio Misc. Sept. 25, 2018). 

    James Kimmelman submitted a claim to Wayne Insurance Group based upon a loss of $16,000 of BitCoin that had been stolen. The insurer investigated the claim and awarded $200 to Kimmelman. The insurer determined that the property was "money" and governed by a sublimit within the policy. Kimmelman filed suit and Wayne Insurance moved for judgment on the pleadings, arguing that BitCoin was "money" under the policy, and that Kimmelman had no claim for breach of contract or bad faith. 

    The insurer relied upon references in articles from CNN, CNET, and the New York Times to support the argument that BitCoin was recognized as "money." The only authority, however, that the court could rely on in determining the status of BitCoin was the Internal Revenue Service Notice 2014-21. There, the IRS stated, "For federal tax purposes, virtual currency is treated as property." Therefore, BitCoin was recognized as property by the IRS and would be so recognized by the court.

    Accordingly, Kimmelman properly pled his complaint for breach of contract and bad faith. The motion for judgment on the pleadings was denied. 

Ohio Supreme Court Holds No Occurence Arises from Subcontractor's Faulty Workmanship

    The Ohio Supreme Court bucked the modern trend by finding that there was no coverage under CGL policy's the subcontractor's exception for faulty workmanship claimed against the insured. Ohio N. Univ. v. Charles Constr. Servs. 2018 Ohio LEXIS 2375 (Ohio Oct. 9, 2018).

    The University contracted with Charles Construction Services, Inc. to build a new luxury hotel and conference center on campus. After work was completed, the University discovered extensive water damage from hidden leaks that it believed were caused by the defective work of Charles Construction and its subcontractors. Repairs were made at the cost of $6 million. 

    The University sued Charles Construction for breach of contract and other claims related to the damage. Charles Construction answered and filed third-party complaints against its subcontractors. Charles Construction tendered to its insurer, Cincinnati Insurance Company (CIC), seeking a defense. CIC agreed to defend under a reservation of rights. CIC intervened in the lawsuit and sought a declaratory judgment that it did not have a duty to defend or indemnify. CIC then filed a motion for summary judgment.

    CIC relied upon a prior decision from the Ohio Supreme Court, Westfield Ins. Co. v Custom Agri. Sys., Inc., 979 N.E. 2d 269 (Ohio 2012), which held that property damage caused by a contractor's own faulty work was not accidental and therefore not covered. The issue currently before the court was whether the general contractor's policy covered claims for property damage caused by a subcontractor's faulty work. 

    The trial court found in favor of CIC. The court of appeals reversed, noting that Custom Argi. had not addressed issues raised by the policy's products-completed operations hazard coverage or subcontractor specific policy terms. 

    Those provisions can be summarized as follows. The policy excluded property damage to:

(6) That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it.

Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard."

The policy defined "products-completed operations hazard" as including,

"property damage" occurring away from premises you own or rent and arising out of . . . "your work" except:

. . .

(2) Work that has not yet been completed or abandoned.

    Despite these provisions, a subcontractor's faulty work did not meet the definition of an "occurrence" because it was not based upon fortuity. The insuring agreement agreed to pay for property damage under certain circumstances. But the damage must be due to an "occurrence." There was no question that the water-related damage was "property damage" and was discovered after the work had been completed. But unless there was an "occurrence," the products-operations completed hazard provision and subcontractor exception had no effect, despite the fact that Charles Construction had paid additional money for it. 

    The court was aware that is reasoning was at odds with recent decisions of other courts. But the language requiring that "property damage" be caused by an "occurrence" remained a constant in the policies. Under the court's precedence, faulty workmanship was not an occurrence as defined in CGL policies. 

    The court therefore reverted to reasoning used before changes to the standard CGL policy in 1986, finding that inadvertent faulty workmanship could never be fortuitous or an accident. The CGL policy was altered in 1986 to provide coverage for certain kinds of property damage caused by inadvertent faulty work. The exclusions were modified to narrow the scope of coverage that was provided when property damage was caused by faulty workmanship. The subcontractor exception was intended to provide coverage for a general contractor when property damage was caused by the faulty work of a subcontractor. This was particularly the case when the property damage occurred after the general contractor had completed the project and the damage was to something other where the allegedly defective work was done. This history was neither addressed nor reconciled by the Ohio Supreme Court's decision. 

 

Data Breach Does Not Constitute "Personal Injury" Under CGL Policy

    The federal district court agreed with the insurer that there was no coverage for the insured's causing a data breach. St. Paul Fire & Marine Ins. Co. v. Rosen Millennium, Inc., 2018 U.S. Dist. LEXIS 173072 (M. D. Fla. Sept. 28, 2018).

    Millennium provided data security services for Rosen Hotels & Resorts, Inc. (RHR). In February 2016, RHR became aware of a potential credit card breach at on of their hotels. RHR hired a forensic investigator to determine whether a data breach occurred. The forensic investigator found malware installed on the payment network and determined that customers' cards may have been affected. RHR disclosed the data breach to potentially affected customers.

    Millennium submitted a Notice of Claim to St. Paul after receiving an email from RHR indicating that RHR believed that the data breach was caused by Millennium's negligence and inquiring as to whether Millennium had insurance to cover such a loss. St. Paul issued a reservation of rights, indicating there was no coverage for the claim. Millennium then provided a letter from RHR in which RHR alleged it was entitled to payment from Millennium as a result of the data breach. RHR did never filed suit.

    St. Paul filed suit for a declaratory judgment that it had no defense obligations and moved for summary judgment. RHR argued St. Paul was obligated to defend because: (1) the customers' loss of use of their credit cards, and the inevitable replacement of the cards, was covered as "property damage;" and (2) the costs incurred by RHR in complying with the notification statutes were covered under the policy. 

    The court noted there was no underlying complaint, so it looked at RHR's Notice of Claim and demand letter. The Notice of Claim had no substantive information other than the fact that a 'credit card systems breach occurred. Details in the demand letter were also sparse, but it specifically stated that Millennium "made private information known to third parties that violated a credit care holder's right of privacy." Therefore, the court addressed St. Paul's duty to defend under the personal injury provisions of the policy.

    The policy defined "personal injury" as an "injury other than bodily injury or advertising injury, that's caused by a personal injury offense." A "personal injury offense" included "making known to any person or organization covered material that violates a person's right of privacy." The parties disputed whether the "making known" requirement was met. The parties agreed that "making known" was synonymous with "publication." 

    The court determined there was no publication. The CGL policy required covered personal injuries to result from the insured's business activities. RHR's alleged injuries did not result from Millennium's business activities but rather the actions of third parties. Therefore, RHR's personal injury claim was not covered under the policy and St. Paul had no duty to defend. 

Insurer Liable for Bad Faith Despite Actions of Insured Contributing to Excess Judgment

    Reversing the intermediate appellate court, the Florida Supreme Court held the insurer liable for bad faith despite imperfect actions by the insured. Harvey v. GEICO Gen. Ins. Co., 2018 Fla. LEXIS 1705 (Fla. Sept. 20, 2018).

    Insured James Harvey was involved in an auto accident in which the other driver, 51 year old John Potts, was killed. Harvey's vehicle was registered in both his name and his business's name, and was covered under a $100,000 liability policy. Harvey reported the accident to his insurer, GEICO. The claim was assigned to a claims adjuster, Fran Korkus. 

    Two days after the accident, GEICO resolved the liability issue against Harvey. GEICO realized there was significant financial exposure to Harvey because Potts had died leaving a wife and children. Karkus sent Harvey a letter explaining that Potts' claim could exceed his policy limits and that he had the right to hire his own attorney.

    The law office representing Potts' estate called Korkus and requested a statement from Harvey to determine the extent of his assets, whether he had additional insurance, and if he was in the course and scope of his employment at the time of the accident. Korkus did not immediately communicate the request to Harvey and denied the law office's request.

    Three days later, GEICO tendered the full amount of the policy limits to the estate's attorney, Sean Domnick, along with a release and affidavit of coverage. Dominck wrote back to Korkus, noting that she refused to make Harvey available for a statement. Korkus faxed the letter to Harvey, who learned for the first time that a statement had been requested. Dominck wrote another letter explaining a statement from Harvey was requested to determine what other coverage or assets may be available. 

    The next day, Harvey called Korkus to discuss Domnick's letter. Harvey told Korkus that he planned to meet with his attorney, whom he had hired at Korkus's suggestion, to review his financial documents and to provide the information requested. But he advised Korkus that his attorney would not be available for a few days. Korkus entered notes in her activity log, stating the insured had hired an attorney and did not want the claimant attorney to think GEICO was not acting fast enough. The insured also asked what GEICO could do to the let the claimant's attorney know that Harvey was working on a response. Kurkus's supervisor instructed her to relay Harvey's message to Domnick, but she did not. 

    One month after the initial request for a statement from Harvey, the estate returned GEICO's check and filed a wrongful death action against Harvey. The case was tried before a jury that found Harvey 100% at fault and awarded the estate $8.47 million in damages.

    Harvey sued GEICO for bad faith based upon the judgment that exceeded his policy limits of $100,000. At the trial, Dominick testified that had he known that Harvey's only other asset was a business account worth $85,000, he would not have filed suit and would have instead advised the estate to accept the policy limits. Korkus conceded that it was reasonable for Domnick to request information about whether Harvey had other insurance coverage and the extent of his assets. Potts' widow testified that if Domnick had recommended that she settle, she would have followed his advice and accepted the policy limits offered by GEICO. 

    Harvey's expert witness testified it would have been in Harvey's best interests for Korkus to inform Domnick that he had retained an attorney, as this would have facilitated the recorded statement. The expert further explained that because GEICO was handling the claim, Harvey could not contact Domnick directly. Instead, Harvey had to use Korkus as "a go-between given his duty to cooperate with his insurer." The evidence also showed that Korkus had poor job reviews and that she had trouble managing her claims properly.

    GEICO moved for a directed verdict, which was denied. In a special verdict, the jury found that GEICO acted in bad faith and the trial court entered judgment in favor of Harvey in the amount of $9.2 million. GEICO appealed and the District Court reversed, concluding the evidence was insufficient to show GEICO acted in bad faith. 

    The Florida Supreme Court reversed the District Court. GEICO's independent investigation of the facts revealed, within days after the accident, that this was a case of clear liability and substantial damages. Not only did GEICO know that Harvey was at fault, but it knew that Potts, a husband and father of three children, died as a result. Consequently, this was a case of catastrophic damages. 

    Had GEICO acted with due regard for Harvey's interests, the excess judgment could have been prevented. Therefore, there was substantial evidence to support the jury's finding that GEICO acted in bad faith in failing to settle the estate's claim against Harvey. 

    GEICO argued that the insurer's obligations ended by tendering the policy limits. Under Florida law, however, the insurer's duty to act in good faith in handling the defense of claims against its insured continued through the duration of the claims process. 

    The District Court held that where the insured's own actions or inactions result, at least in part, in an excess judgment, the insurer cannot be held liable for bad faith. The Supreme Court disagreed. The focus in bad faith case was not on the actions of the claimant but rather on those of the insurer in fulfilling its obligations to the insured. 

    Thanks to my Damon Key blogging colleague, Robert Thomas (here) for flagging this case.

Questions of Fact Regarding Collapse of Basement Walls Prevent Insurer's Motion for Summary Judgment

    The court denied the insurer's motion for summary judgment on whether the policy covered the collapse of basement walls based upon factual issues presented. Sirois v. USAA Cas. Ins. Co., 2018 U.S. Dist. LEXIS 158508 (D. Conn. Sept. 18, 2018). 

    The insureds' purchased their home in 2010. In December 2015, a crack in the basement wall was noticed. It was not thought to be a serious problem. But in 2016, the insured read an article about defective concrete problems affecting homeowners in Connecticut. An inspector, Dean Soucy, was hired. He found faults and cracks in the foundation walls. Thereafter, a claim was submitted to USAA under homeowners' policies issued over the years to the insureds. USAA denied coverage. 

    The insureds sued, alleging that the basement walls had collapsed as defined in the policies. USAA moved for summary judgment. The court determined there were issues of fact concerning whether the claimed losses fell within the coverage of policies issued from 2010 to 2014 and policies issued from 2014 to 2016. 

    Under the pre-2014 policies, "collapse" was defined as "a sudden falling or caving in" or " a sudden breaking apart or deformation such that the building . . . is in imminent peril of falling or caving in and is not fit for its intended use." The policy further stated that "[d]amage consisting solely of settling, cracking, shrinking, bulging or expansion is not covered . . . unless it is the direct result of collapse." The insureds contended that damage to their home constituted a "caving in." A dictionary definition defined "cave in" as "yield" or to "submit to pressure." USAA contested the definition, claiming the insureds' definition referred to a colloquial definition of "cave in." The court found the term "caving in" was ambiguous because both parties' interpretations were reasonable. 

    Under the post-2014 policies, the definition of "collapse" was the same. Therefore, the term "caving in" was ambiguous here as well. The policies' exclusions differed, however, stating that there was no coverage for loss caused by "settling, cracking, shrinking, bulging or expansion of . .  foundations, walls . . ." Consequently, this phrase was moved from the definition of "collapse" to the policies' exclusions. If this exclusion were interpreted to prelude coverage for all damage consisting or resulting from cracking, shrinking, and bulging, it would contradict the "collapse" provision. For example, if cracking caused a "falling in," it would constitute a covered "collapse" under the policy. but fall within the exclusion noted above. 

    Therefore, the evidence in the record showed that the insureds' losses could fall within their proposed definition of "caving in." The Insured's expert repeatedly described the damage to the home in terms of the submission to pressure and yielding of the concrete and the walls generally. The expert also described the damage as a "substantial impairment to the structural integrity" of the property. The expert distinguished between homes with mere "cracking" damage and those where the cracking had caused a "substantial impairment to the structural integrity" of the property. He noted that, for example, a property containing only a small area of cracking did not contain a "substantial impairment." This further underscored that fact that there could be "cracking" that did not rise to the level of collapse under the policy. 

    Consequently, there was a genuine dispute of material fact regarding whether the home was subject to a "caving in" that fell within the "collapse" coverage in the policies. 

Coverage Denied Where Occurrence Takes Place Outside Coverage Territory

    The court held there was no coverage for construction defect claims that occurred outside the coverage territory. Foremost Signature Ins. Co. v. Silverboys, 2018 U.S. Dist. LEXIS 154524 (S.D. Fla. Sept. 11, 2018).

    Solo Design, LLC, a Miami-based design company, entered into a contract with Silverboys, LLC (Owner) to provide interior design services in conjunction with the renovation of the Owner's vacation home in the Bahamas. Solo retained Whittingham, a Bahamian architect, as a subcontractor to serve as project manager. 

    Owner sued Solo, Whittingham and others in Florida for breach of contract, fraud, conversion and negligence when the project did not go as planned. The underlying complaint alleged intentional misconduct, lying about qualifications and the progress of the project, submitting false invoices, requesting money for services that were not performed, etc. Owner alleged that the damages included: (a) the cost to repair substandard work; (b) loss of use of the home due to delay; and (c) overcharges for furnishings, contract fees, and expenses. The underlying complaint set forth only a few instances of physical injury to the home, including mold on the ceiling in the master shower, faulty millwork on the children's playroom bookshelf, and a defective front door and resysta facade. 

    Solo had three CGL policies with Foremost that covered "property damage" caused by an "occurrence" that took place in the "coverage territory" during the policy period. 

    Foremost brought suit for a declaratory judgment that the policies did not cover the Owner's claims and there was no duty to defend or to indemnify. Both parties moved for summary judgment. 

    The court first found that allegations regarding mold in the shower and the damaged resysta façade - injuries to otherwise nondefective property caused by defendants' failure to properly perform their job - could be read to fall within the definition of covered property damage so long defendants' failures were not intentional. Therefore, in the context of a duty to defend, the underlying complaint sufficiently alleged property damage caused by an occurrence. 

    The policies' coverage territory included " the United States . . . or all parts of the world if the damages arises out of . . . good or products made or sold by [Solo] in the United States; or activities of a person whose home is in the United States, but is away for a short time on your business." Foremost argued there was no duty to defend because all alleged property damage was caused by an occurrence in the Bahamas, outside the coverage territory. Defendants argued that the alleged negligent conduct that caused the damage occurred in the coverage territory since Solo failed to supervise Whittingham, made billing mistakes, and drafted the designs in Miami. The court determined that the location of the injuries, not of some precipitating cause, determined the location of the event for purposes of coverage. Here, the alleged property damage was in the Bahamas, outside of the coverage territory. There was no indication that Solo employees traveled to the Bahamas for a short or long period of time. 

    Accordingly, there was no property damage caused by an occurrence in the coverage area, and not duty to defend.