{"id":1700,"date":"2013-06-07T06:06:03","date_gmt":"2013-06-07T12:06:03","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=1700"},"modified":"2013-06-04T16:06:25","modified_gmt":"2013-06-04T22:06:25","slug":"alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy\/","title":{"rendered":"Alabama Supreme Court Affirms Summary Judgment In Favor Of Insurer Where Policyholders Cannot Demonstrate That Faulty Workmanship Claims Constitute Occurrences Under Policy"},"content":{"rendered":"<p>Hillary Coombs Jarvis and Jill C. Maguire &#8211; May 28, 2013<\/p>\n<p>In Shane Traylor Cabinetmaker, L.L.C. et al. v. American Resources Insurance Co., No. 1110418, 2013 Ala. LEXIS 42 (Ala. May 3, 2013), the Alabama Supreme Court affirmed summary judgment in favor of insurer American Resources because its policyholders did not establish that faulty workmanship claims (asserted by counterclaim in underlying litigation) constituted &#8220;occurrences&#8221; triggering coverage under a business liability policy.\u00a0 The policyholders also failed to establish coverage under the &#8220;products\u2013completed operations hazard&#8221; provisions.\u00a0 American Resources thus had no duty to defend or indemnify the insureds in the underlying litigation.<\/p>\n<p>The underlying lawsuit arose out of a dispute between Robert L. Barbee and his company (&#8220;Barbee&#8221;), on one hand, and Shane Traylor Cabinetmaker, L.L.C. (&#8220;STC&#8221;) and Michael Shane Traylor (&#8220;Traylor&#8221;), on the other.\u00a0 Barbee had engaged STC and Traylor to undertake cabinetry and woodworking on homes that Barbee was building.\u00a0 STC and Traylor sued Barbee for breach of contract, among other claims, relating to the cabinet and wood work that STC had performed in the Barbee homes.\u00a0 Barbee filed a counterclaim against STC and Traylor, alleging breach of contract, negligence, and misrepresentation, among other claims.\u00a0 Barbee later filed an amended counterclaim, seeking mental anguish damages.\u00a0 Barbee also sought a declaratory judgment concerning the issue of whether Barbee had an ownership interest in STC.<\/p>\n<p>STC and Traylor notified their insurer, American Resources, of Barbee&#8217;s counterclaim in the underlying litigation and twice requested that American Resources defend and indemnify them.\u00a0 American Resources refused, asserting that Barbee&#8217;s claims were not covered under the policy.\u00a0 STC and Traylor sued American Resources, alleging breach of contract and bad faith.<\/p>\n<p>American Resources&#8217;s policy provided coverage for legal damages due to &#8220;bodily injury&#8221; or &#8220;property damage&#8221; only where either was caused by an &#8220;occurrence.&#8221;\u00a0 The policy defined &#8220;occurrence&#8221; as &#8220;an accident, including continuous or repeated exposure to substantially the same general harmful conditions.&#8221;\u00a0 The trial court concluded that the policy required that an &#8220;accident&#8221; take place in order to trigger coverage and that Barbee&#8217;s claims amounted to a business dispute\u2014not an &#8220;accident.&#8221;\u00a0 2013 Ala. LEXIS 42, *9 (citations omitted).<\/p>\n<p>STC and Traylor argued that Barbee&#8217;s allegations that their cabinet and wood work was &#8220;defective and deficient in several particulars and had to be repaired or replaced&#8221; constituted an &#8220;accident&#8221; under Alabama case law.\u00a0 Id. at *10.\u00a0 The Alabama Supreme Court rejected this contention, finding that it had previously determined that &#8220;&#8216;faulty workmanship itself&#8217; simply does not constitute an accident or &#8216;occurrence&#8217; within the meaning of a comprehensive general-liability insurance policy . . . , such as the policy here.&#8221;\u00a0 Id. at *10-11 (quoting Town &amp; Country Property, LLC v. Amerisure Insurance Co., 2011 Ala. LEXIS 183, at *16-17 (Ala. Oct. 21, \u00a02011)).\u00a0 Because Barbee did not allege &#8220;damage to [Barbee&#8217;s homes] as a result of the alleged faulty workmanship, additional repairs or remodeling to [Barbee&#8217;s homes] necessitated by STC and Traylor&#8217;s allegedly faulty work, . . . any loss of use of [Barbee&#8217;s homes] . . . [or] damage resulting from . . . a condition other than STC and Traylor&#8217;s allegedly defective work,&#8221;\u00a0 id. at *12-13, no &#8220;occurrence&#8221; had taken place.<\/p>\n<p>The Court also rejected STC&#8217;s and Traylor&#8217;s arguments that one could reasonably infer from Barbee&#8217;s counterclaim a claim for damage for loss of use.\u00a0 Barbee&#8217;s counterclaim did not allege damage to other property resulting from STC&#8217;s and Traylor&#8217;s allegedly defective work and the Court &#8220;decline[d] to infer loss of use or other injuries based on speculation as to damage that was not alleged.&#8221;\u00a0 Id. at *17.<\/p>\n<p>The Court also rejected with dispatch several other arguments STC and Traylor raised.\u00a0 In particular, although the Court assumed for the sake of argument that mental anguish could satisfy the &#8220;bodily injury&#8221; provision of American Resource&#8217;s policy, Barbee&#8217;s claim for mental anguish did not arise from STC and Traylor&#8217;s allegedly defective work \u2013 but rather a dispute surrounding the ownership of STC.\u00a0 Id. at *18-19.\u00a0 STC and Traylor also sought coverage under the &#8220;products\u2013completed operations hazard&#8221; provisions, which, in other cases, the Alabama Supreme Court had interpreted to provide coverage for losses resulting from breaches of warranty and misrepresentations tied to the insured&#8217;s work.\u00a0 Id. at *19-20.\u00a0 In Shane Traylor, the Court concluded that, to the extent that Barbee alleged misrepresentations, those misrepresentations related to the ownership dispute only \u2013 and not to the quality of the work performed.\u00a0 Thus, the &#8220;products\u2013completed operations hazard&#8221; provisions likewise provided no coverage.<\/p>\n<p>The Alabama Supreme Court&#8217;s ruling in Shane Traylor reinforces prior decisions holding that faulty workmanship, by itself, is not an &#8220;accident&#8221; triggering coverage under Alabama law.\u00a0 Considering the ongoing debate concerning the &#8220;occurrence&#8221; issue in the construction defect dispute context, the Shane Traylor decision likely will be looked to by both insurers and policyholders in future litigation \u2013 both within and outside of Alabama.<\/p>\n<p>via <a href=\"http:\/\/www.mondaq.com\/unitedstates\/x\/241664\/Reinsurance\/Alabama+Supreme+Court+Affirms+Summary+Judgment+In+Favor+Of+Insurer+Where+Policyholders+Cannot+Demonstrate+That+Faulty+Workmanship+Claims+Constitute+Occurrences+Under+Policy&amp;email_access=on\">Alabama Supreme Court Affirms Summary Judgment In Favor Of Insurer Where Policyholders Cannot Demonstrate That Faulty Workmanship Claims Constitute Occurrences Under Policy &#8211; Insurance &#8211; United States<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hillary Coombs Jarvis and Jill C. Maguire &#8211; May 28, 2013 In Shane Traylor Cabinetmaker, L.L.C. et al. v. American Resources Insurance Co., No. 1110418, 2013 Ala. LEXIS 42 (Ala. May 3, 2013), the Alabama Supreme Court affirmed summary judgment in favor of insurer American Resources because its policyholders did not establish that faulty workmanship&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy\/\">Continue reading <span class=\"screen-reader-text\">Alabama Supreme Court Affirms Summary Judgment In Favor Of Insurer Where Policyholders Cannot Demonstrate That Faulty Workmanship Claims Constitute Occurrences Under Policy<\/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":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14,4,172,3],"tags":[68,11,346],"class_list":["post-1700","post","type-post","status-publish","format-standard","hentry","category-construction-2","category-construction-defects","category-construction-law-2","category-insurance-claims","tag-faulty-workmanship","tag-insurance-claim","tag-occurrences","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>Alabama Supreme Court Affirms Summary Judgment In Favor Of Insurer Where Policyholders Cannot Demonstrate That Faulty Workmanship Claims Constitute Occurrences Under Policy - Advise &amp; Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Alabama Supreme Court Affirms Summary Judgment In Favor Of Insurer Where Policyholders Cannot Demonstrate That Faulty Workmanship Claims Constitute Occurrences Under Policy - Advise &amp; Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Hillary Coombs Jarvis and Jill C. Maguire &#8211; May 28, 2013 In Shane Traylor Cabinetmaker, L.L.C. et al. v. American Resources Insurance Co., No. 1110418, 2013 Ala. LEXIS 42 (Ala. May 3, 2013), the Alabama Supreme Court affirmed summary judgment in favor of insurer American Resources because its policyholders did not establish that faulty workmanship&hellip; Continue reading Alabama Supreme Court Affirms Summary Judgment In Favor Of Insurer Where Policyholders Cannot Demonstrate That Faulty Workmanship Claims Constitute Occurrences Under Policy\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.myconstructionexpert.com\/blog\/alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy\/\" \/>\n<meta property=\"og:site_name\" content=\"Advise &amp; Consult, Inc.\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/\" \/>\n<meta property=\"article:published_time\" content=\"2013-06-07T12:06:03+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:site\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7\"},\"headline\":\"Alabama Supreme Court Affirms Summary Judgment In Favor Of Insurer Where Policyholders Cannot Demonstrate That Faulty Workmanship Claims Constitute Occurrences Under Policy\",\"datePublished\":\"2013-06-07T12:06:03+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy\/\"},\"wordCount\":852,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\"},\"keywords\":[\"faulty workmanship\",\"insurance claim\",\"Occurrences\"],\"articleSection\":[\"Construction\",\"Construction Defects\",\"Construction Law\",\"Insurance Claims\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.myconstructionexpert.com\/blog\/alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy\/\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/alabama-supreme-court-affirms-summary-judgment-in-favor-of-insurer-where-policyholders-cannot-demonstrate-that-faulty-workmanship-claims-constitute-occurrences-under-policy\/\",\"name\":\"Alabama Supreme Court Affirms Summary Judgment In Favor Of Insurer Where Policyholders Cannot Demonstrate That Faulty Workmanship Claims Constitute Occurrences Under Policy - Advise &amp; 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