Tred R. Eyerly | Insurance Law Hawaii | May 8, 2019
The Eleventh Circuit reversed the district court’s determination that there was no coverage based upon the policy’s “your work” exclusion. Southern-Owners Ins. Co. v. Mac Contractors of Fla, LLC, 2019 U.S. App. LEXIS 10689 (11th Cir. April 11, 2019).
Mac Contractors contracted with the homeowners to custom build their home. After construction began, Mac left the site before completing the project and before the issuance of a certificate of occupancy. The homeowners sued, alleged damage to wood floors and the metal roof.
Southern-Owners originally agreed to defend under the CGL policy, but later withdrew the defense and filed this action for declaratory relief. The parties cross-filed motions for summary judgment. Southern-Owners argued that the “your work” exclusion applied to bar coverage. The “your work” exclusion barred coverage for “‘property damage’ to ‘your work’ arising out of it or any part of it and included in the ‘products’ completed operations hazard.'” The “products’ completed operations hazard” included all “‘property damage’ occurring away from premises you own or rent and arising out of . . . ‘your work’ except . . . (1) products that are still in your physical possession; or (2) work that has not yet been completed or abandoned.”
The district court found that the “your work” exclusion applied and granted summary judgment to Southern-Owners.
On appeal, Mac argued that the underlying complaint was silent as to the timing of damages and could reasonably be construed to allege “property damage” occurring during ongoing operations, i.e., before Mac abandoned the project. Mac argued the property damage occurring before the work was “completed” or “abandoned” was not included in the “products-completed operations hazard” and fell outside the “your work” exclusion. The “your work” exclusion applied to only property damage included in the “products-completed operations hazard.”
The Eleventh Circuit agreed. Although the underlying allegations were silent as to the timing of the damages, the allegations could be reasonably construed to alleged damages that occurred during ongoing operations. The homeowners alleged that Mac failed to remediate damage to the wood floors and metal roof despite its assurances that the damages would be fixed. The district court’s judgment was vacated and the case remanded for further proceedings.