{"id":898540,"date":"2021-03-04T14:04:26","date_gmt":"2021-03-04T21:04:26","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898540"},"modified":"2021-03-04T14:04:30","modified_gmt":"2021-03-04T21:04:30","slug":"occurrence-insurers-obligation","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/occurrence-insurers-obligation\/","title":{"rendered":"Triable Issue of Fact Exists as to Insurer\u2019s Obligation to Provide Coverage Under Occurrence Policy"},"content":{"rendered":"\n

Valerie Moore and Kathleen Moriarty | Haight Brown & Bonesteel<\/a><\/p>\n\n\n\n

In\u00a0Guastello v. AIG Specialty Ins. Co.<\/em>\u00a0(No. G057714. filed 2\/19\/21 ord. pub. 2\/23\/21), a California appeals court held that triable issues of material fact exist which precluded summary judgment for an insurer seeking to disclaim coverage on the basis that the \u201coccurrence<\/a>\u201d pre-dated the policy period where a dispute exists as to the timing of the subject \u201coccurrence.\u201d<\/p>\n\n\n\n

In Guastello<\/em>, a subcontractor built retaining walls from 2003 to 2004 for a housing development in Dana Point, California. In 2010, one of these retaining walls collapsed causing damage to a residential lot owned by Thomas Guastello.<\/p>\n\n\n\n

Guastello initially sued the subcontractor alleging negligent design and construction and seeking various damages, including diminution in value of his property. The subcontractor had an \u201coccurrence\u201d policy with AIG Specialty Insurance Company with an effective period of 2003-2004. AIG denied any duty to defend or indemnify the subcontractor on the basis that the property damage occurred in January 2010 and was therefore outside of the policy period of 2003-2004.<\/p>\n\n\n\n

Shortly after AIG\u2019s disclaimer, Guastello obtained a default judgment against the subcontractor and filed a direct action against AIG for enforcement of the default judgment, breach of the covenant of good faith and fair dealing and declaratory relief pursuant to Insurance Code section 11580. AIG filed a motion for summary judgment contending Guastello did not suffer any property damage until the retaining wall collapsed in 2010, thus the occurrence did not take place until seven years after expiration of the policy.<\/p>\n\n\n\n

Guastello\u2019s opposition to AIG\u2019s motion included a declaration by an expert civil engineer whose declaration proffered a latent construction defect theory. The expert opined that the contractor\u2019s negligent construction of the retaining wall began to cause damage to the wall itself and to Guastello\u2019s property within months of the wall\u2019s substantial completion in 2003 by way of \u201ccontinuous and progressive destabilization\u201d to Guastello\u2019s lot beginning before the end of November 2004. The engineer opined that the \u201ccontinuous and progressive destabilization\u201d eventually led to the complete collapse of the wall in 2010.<\/p>\n\n\n\n

The trial court granted AIG\u2019s motion for summary judgment as to all three causes of action, finding Guastello did not experience property damage until after the policy\u2019s expiration and that all three causes of action were \u201cpredicated on\u201d AIG\u2019s \u201cwrongful refusal to satisfy the judgment.\u201d<\/p>\n\n\n\n

Guastello appealed the trial court\u2019s decision contending a triable issue of material fact existed as to whether the property damage took place during the coverage period of the AIG policy.<\/p>\n\n\n\n

The Guastello<\/em> court first discussed the general principles of law applying to liability insurance, distinguishing a \u201cclaims made\u201d policy, which provides coverage if the claim is made during the policy period, and an \u201coccurrence\u201d policy, which provides coverage for damages which occur during the policy period, even if the claim is made after the policy expired. (Citing Carolina Casualty Ins. Co. v. L.M. Ross Law Group LLP <\/em>(2010) 184 Cal.App.4th<\/sup> 196, 206-207 and Garriott Crop Dusting Co. v. Superior Court<\/em> (1990) 221 Cal.App.3d 783, 792.)<\/p>\n\n\n\n

The AIG policy defined \u201coccurrence\u201d as \u201can accident, including continuous or repeated exposure to substantially the same general harmful conditions. Where \u2018continuing or progressive\u2019 property damage is at issue, the \u2018property damage\u2019 shall be deemed to be one \u2018occurrence\u2019 and shall be deemed to occur when such\u2026;\u2019property damage\u2019 first commenced.\u201d<\/p>\n\n\n\n

The AIG policy defined \u201cproperty damage\u201d as \u201ca. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the \u2018occurrence\u2019 that caused it.\u201d<\/p>\n\n\n\n

Considering the language of the policy and the substance of the declaration of Guastello\u2019s expert, the Guastello<\/em> court found that timing of the \u201coccurrence\u201d \u2014 the alleged damage to Guastello\u2019s property \u2014 was \u201cplainly a disputed issue of material fact.\u201d<\/p>\n\n\n\n

AIG argued that the engineer\u2019s declaration was inadmissible under Evidence Code section 720 because it lacked foundation, was speculative and conclusory because he did not personally inspect the retaining wall or affected property and Guastello had offered the expert\u2019s opinions to rebut his own declarations as to the damages he had sustained.<\/p>\n\n\n\n

The Guastello<\/em> court flatly rejected AIG\u2019s argument as to admissibility of the declaration, pointing to AIG\u2019s failure to make an evidentiary objection to the declaration in the trial court, thereby waiving the objection. The Guastello<\/em> court found the declaration was sufficient as the declarant set forth his education, training and experience and stated the bases for the opinions he gave.<\/p>\n\n\n\n

Further, the Guastello<\/em> court held that AIG\u2019s arguments as to the validity of the expert\u2019s opinions went to the weight of his testimony, which is a factual issue for a jury and not a legal issue for the court. (Citing Polk v. Ford Motor Co.<\/em> (8th<\/sup> Cir. 1976) 529 F.2d 259, 271.)<\/p>\n\n\n\n

Finally, AIG contended Guastello\u2019s evidence in support of the default against the subcontractor established the alleged damage took place no earlier than 2010 and directly conflicted with the expert\u2019s declaration that the damage began before the end of November 2004.<\/p>\n\n\n\n

The Guastello<\/em> court disagreed with AIG, stating that the evidence submitted with the default motion was not necessarily inconsistent with the latent construction defect theory of liability proffered by the expert engineer and was arguably consistent with the latent construction defect theory. Fittingly, the Guastello<\/em> court concluded \u201cAgain, this is a contested issue of material fact.\u201d<\/p>\n\n\n\n

This document is intended to provide you with information about insurance law related developments. The contents of this document are not intended to provide specific legal advice. If you have questions about the contents of this alert, please contact the authors. This communication may be considered advertising in some jurisdictions.<\/p>\n","protected":false},"excerpt":{"rendered":"

Valerie Moore and Kathleen Moriarty | Haight Brown & Bonesteel In\u00a0Guastello v. AIG Specialty Ins. Co.\u00a0(No. G057714. filed 2\/19\/21 ord. pub. 2\/23\/21), a California appeals court held that triable issues of material fact exist which precluded summary judgment for an insurer seeking to disclaim coverage on the basis that the \u201coccurrence\u201d pre-dated the policy period… Continue reading Triable Issue of Fact Exists as to Insurer\u2019s Obligation to Provide Coverage Under Occurrence 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":[9914],"tags":[9895,23,10727],"class_list":["post-898540","post","type-post","status-publish","format-standard","hentry","category-insurance-coverage","tag-advise-consult","tag-insurance-coverage","tag-occurrence-2","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nTriable Issue of Fact Exists as to Insurer\u2019s Obligation to Provide Coverage Under Occurrence Policy - 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