Acuity v. Society Insurance, 810 N.W.2d 812

VPP Group, LLC owned the building; Acuity insured VPP and paid its damage claims after a loss from construction work.
RS Construction and Flint's Construction were contracted to remove and reinstall the engine room south wall; VPP supplied the materials while RS/Flint supplied labor.
The contract was a May 21, 2006 Bid Memo for removing/replacing the south wall, with a total price of $8,500.
During excavation in June 2006, soil erosion undermined the engine room subgrade, causing cracking, collapse, and damage to the engine room, roof, and adjacent structure, and reducing the plant’s refrigeration capacity.
The loss forced VPP to incur extra costs and repairs; Acuity paid $636,466.39; Acuity then sued RS/Flint and Society Insurance under the CGL policies for coverage and subrogation.
The circuit court granted summary judgment for Society, holding no occurrence under the CGL policy; Acuity appealed arguing there was an occurrence and coverage.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether there was a covered occurrence under Society’s CGL policy	Acuity: occurrence occurred due to accidental soil erosion from faulty excavation	Society: no occurrence under the policy	Yes, there was an occurrence under Society’s CGL policy
Whether the economic loss doctrine bars coverage	Acuity: economic loss doctrine does not bar coverage; policy governs	Society: doctrine bars tort recovery; no coverage for breach	Economic loss doctrine does not bar coverage; remains viable but does not defeat coverage under the policy
Whether exclusions k.(5) and k.(6) apply to defeat coverage	Exclusions do not apply because damages were to parts beyond the contracted area	Exclusions apply to damage to property where work was performed	Exclusions do not apply to defeat coverage; there was coverage for damage to the engine room and related equipment

American Girl, Inc. v. American Family Mut. Ins. Co., 268 Wis. 2d 16 (Wis. 2004) (defining accident and occurrence; faulty workmanship may cause an occurrence)
Glendenning's Limestone & Ready-Mix Co. v. Reimer, 295 Wis. 2d 556 (Wis. Ct. App. 2006) (faulty workmanship may cause an occurrence when damage is unanticipated)
Kalchthaler v. Keller Constr. Co., 224 Wis. 2d 387 (Wis. Ct. App. 1999) (leakage as an accident; occurrence when damage is not intended)
Acuity v. Burd & Smith Construction, Inc., 721 N.W.2d 33 (N.D. 2006) (exclusions analyzed by scope of insured contract; damage to interior not excluded)
Fortney & Weygandt, Inc. v. American Manufacturers Mutual Insurance Co., 595 F.3d 308 (6th Cir. 2010) (interprets phrase that particular part; limits exclusion scope to component parts)
Stuart v. Weisflog's Showroom Gallery, Inc., 311 Wis. 2d 492 (Wis. 2008) (intentional acts; not applicable to accidental occurrence analysis)
Sustache v. American Family Mut. Ins. Co., 311 Wis. 2d 548 (Wis. 2008) (intentional act context; reaffirmation of accident/occurrence framework)