{"id":159,"date":"2011-11-22T13:28:17","date_gmt":"2011-11-22T20:28:17","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=159"},"modified":"2011-11-22T13:28:17","modified_gmt":"2011-11-22T20:28:17","slug":"greystone-construction-v-national-fire-marine-insurance-affects-construction-defect-coverage","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/greystone-construction-v-national-fire-marine-insurance-affects-construction-defect-coverage\/","title":{"rendered":"Greystone Construction v. National Fire &#038; Marine Insurance affects construction-defect coverage"},"content":{"rendered":"<p>November 21, 2011<\/p>\n<p>On November 1, 2011, the Tenth Circuit Court of Appeals issued a ruling that will significantly impact construction-defect\u00a0insurance coverage.<\/p>\n<p>In Greystone Construction, Inc. v. National Fire &amp; Marine Insurance Co., the court addressed the definition of the term \u201caccident,\u201d as it relates to the meaning of the term \u201coccurrence\u201d in Commercial General Liability (CGL) insurance policies issued and expiring before the effective date of \u00a7 13-20-808, C.R.S., a statute addressing insurance coverage\u00a0for construction professionals.<\/p>\n<p>The decision has two significant rulings.\u00a0 First, the court addressed retroactive application of the definition of \u201coccurrence\u201d incorporated into \u00a7 13-20-808.\u00a0 Effective May 21, 2010, this statute defines \u201caccident\u201d and, therefore, the term \u201coccurrence,\u201d in standard CGL policies, to include \u201cwork of a construction professional that results in property damage, including damage to the work itself or other work . . . unless the property damage is intended or expected by the insured.\u201d \u00a0This expressly overruled a narrower definition of the term applied by the Colorado Court of Appeals in General Security Indemnity Co. of Arizona v. Mountain States Mutual Casualty Co., 205 P.3d 529 (Colo.App. 2009). \u00a0In an issue that has divided state trial courts, the Tenth Circuit held that this definition did not apply to insurance policies where the coverage period expired before the effective date of the statute.<\/p>\n<p>The court then addressed the pre-statutory definition of \u201coccurrence\u201d as defined by General Security, which had been adopted by the federal district court in Greystone.\u00a0 These cases had defined \u201coccurrence\u201d to require consequential property damage to property other than the insured\u2019s work.\u00a0 Based on the rarely used proposition that \u201c[w]here jurisdiction rests solely on diversity of citizenship and there is no controlling decision by the highest court of a state, a decision by an intermediate court should be followed by the Federal court, absent convincing evidence that the highest court would decide otherwise,\u201d the Tenth Circuit rejected the General Security definition of \u201coccurrence\u201d \u00a0In its view, there was convincing evidence that if this issue were before the Colorado Supreme Court, given the existing law regarding the interpretation of insurance policies, that court would not follow General Security.\u00a0 Rejecting General Security, the Tenth Circuit in Greystone held that unanticipated damage to the insured\u2019s own work constitutes an \u201coccurrence.\u201d\u00a0 Therefore, if the work at issue were performed by a subcontractor, and the policy contained the standard subcontractor exception to the \u201c\u201byour work\u2019 exclusion,\u201d allegations of property damage to the insured\u2019s own work would constitute an \u201coccurrence\u201d and trigger the duty to defend.<\/p>\n<p>The court\u2019s ruling creates a potentially unusual situation.\u00a0 In cases interpreting insurance policies where the coverage period expired before May 21, 2010, Colorado state court trial judges will, presumably, still be bound by the Colorado Court of Appeals\u2019 decision in General Security; federal trial court judges, however, will be bound by the Tenth Circuit\u2019s decision in Greystone.\u00a0 Thus, if construction-defect coverage lawsuits concern policies expiring before the effective date of \u00a7 13-20-808, and do not meet the requirements for diversity jurisdiction, the insurer may receive a favorable ruling regarding coverage in a Colorado state court, but the exact same factual situation might result in a ruling adverse to the insurer if the elements of diversity jurisdiction are present.\u00a0 Accordingly, unless the Colorado Supreme Court addresses this issue, we may see two disparate interpretations of the law that will impact construction-defect litigation for the next several years, until the statutory definition of \u201caccident\u201d found in \u00a7 13-20-808, controls all construction-defect claims.<\/p>\n<p>via <a href=\"http:\/\/www.gdnlaw.net\/blog\/ruling-affects-construction-defect-insurance-coverage\">Greystone Construction v. National Fire &amp; Marine Insurance affects construction-defect coverage | GRUND \u00b7 DAGNER, P.C.<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>November 21, 2011 On November 1, 2011, the Tenth Circuit Court of Appeals issued a ruling that will significantly impact construction-defect\u00a0insurance coverage. In Greystone Construction, Inc. v. National Fire &amp; Marine Insurance Co., the court addressed the definition of the term \u201caccident,\u201d as it relates to the meaning of the term \u201coccurrence\u201d in Commercial General&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/greystone-construction-v-national-fire-marine-insurance-affects-construction-defect-coverage\/\">Continue reading <span class=\"screen-reader-text\">Greystone Construction v. National Fire &#038; Marine Insurance affects construction-defect coverage<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14,4,30,3],"tags":[12,19,64,3],"class_list":["post-159","post","type-post","status-publish","format-standard","hentry","category-construction-2","category-construction-defects","category-general-liability-policy","category-insurance-claims","tag-construction","tag-construction-defects-2","tag-general-liability-policy-2","tag-insurance-claims","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Greystone Construction v. 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