AIR MASTER & COOLING, INC. VS. SELECTIVE INSURANCECOMPANY OF AMERICA(L-6861-14, ESSEX COUNTY AND STATEWIDE)
A-5415-15T3
| N.J. Super. Ct. App. Div. | Oct 10, 2017Background
- Air Master & Cooling, a subcontractor, performed HVAC and roof work at a 7‑story, 101‑unit condominium (Nov 2005–Apr 2008). Water infiltration and interior unit leaks were reported beginning in 2008.
- Multiple suits by unit owners and the association were consolidated; the general contractor and others filed third‑party claims against Air Master.
- Air Master had successive occurrence‑based CGL policies: Penn National (covering when work occurred), Selective (June 22, 2009–June 22, 2012), and Harleysville (after 2012). Penn National defended under reservation; Selective and Harleysville denied coverage as damage had allegedly manifested before their policy periods.
- A May 3, 2010 Jersey Infrared roof moisture survey identified 111 moisture‑damaged spots on the roof and recommended replacement, but stated it was impossible to determine when infiltration occurred and noted possible migration of moisture.
- Trial court granted summary judgment for Selective, finding manifestation predated Selective’s policy; court reconsidered and recognized continuous‑trigger applies to third‑party progressive property damage but still held manifestation occurred before Selective’s period. Appellate court vacated and remanded for factual development.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether continuous‑trigger theory applies to third‑party progressive property damage in construction‑defect cases | Continuous‑trigger should apply so all insurers on risk from work through manifestation share liability | Continuous‑trigger not applicable or unnecessary; manifestation occurred pre‑Selective | Court: Continuous‑trigger doctrine applies to third‑party progressive property damage in construction‑defect cases |
| When is the "last pull" (end point) of the trigger for progressive property damage | Trigger should run until damage is known or reasonably knowable as to the property (Air Master: until May 2010 Jersey Infrared report attributable to Air Master) | Manifestation occurred earlier (2008 reports of leaks); Selective not on the risk at manifestation | Court: Last pull is when the essential nature and scope of the property damage first becomes known or reasonably knowable (manifestation), not when attributable proof to a specific contractor exists |
| Whether the trigger end should be delayed until damage is attributed to a specific insured | Attribution to a specific defendant should determine end of coverage trigger (analogous to discovery/attribution in statutes of limitations) | Attribution requirement is impractical, inefficient, and unsupported; would convert occurrence policies into claims‑made equivalents | Court: Rejects an attribution requirement; manifestation date common to all potential defendants governs, for efficiency and underwriting reasons |
| Sufficiency of record to determine manifestation date and summary judgment for Selective | Air Master: disputed facts — manifestation (esp. roof damage) not shown to predate Selective; remand needed | Selective: damage manifested before its policy; summary judgment appropriate | Court: Vacates summary judgment; factual record insufficient re: when the essential nature/scope of roof and unit damage was known or reasonably knowable; remand for further discovery/hearing guided by Winding Hills analysis |
Key Cases Cited
- Owens‑Illinois, Inc. v. United Ins. Co., 138 N.J. 437 (1994) (adopted continuous‑trigger for progressive harms and explained exposure, manifestation, and continuous‑trigger theories)
- Winding Hills Condominium Ass'n, Inc. v. North Am. Specialty Ins. Co., 332 N.J. Super. 85 (App. Div. 2000) (manifestation marked by expert report delineating essential nature/scope of defects)
- Polarome Int'l, Inc. v. Greenwich Ins. Co., 404 N.J. Super. 241 (App. Div. 2008) (held last pull occurs at initial clinical/diagnostic manifestation for progressive toxic injuries)
- Quincy Ins. Co. v. Borough of Bellmawr, 172 N.J. 409 (2002) (applied continuous‑trigger principles in environmental contamination context)
- Carter‑Wallace v. Admiral Ins. Co., 154 N.J. 312 (1998) (discussed continuous‑trigger in progressive injury/environmental cases)
- Potomac Ins. Co. v. PMA Ins. Co., 215 N.J. 409 (2013) (implicitly approved continuous‑trigger analysis in construction‑defect roof case when allocating defense costs)