Crossmann Communities of North Carolina, Inc. v. Harleysville Mutual Insurance
395 S.C. 40
| S.C. | 2011Background
- Crossmann constructed multiple Myrtle Beach condo projects 1992–1999; subcontractors were used.
- Water intrusion caused progressive damage to otherwise nondefective components; homeowners settled for about $16.8 million.
- Crossmann sought coverage under Harleysville CGL policies; other insurers settled with Crossmann, leaving Harleysville as primary remaining insurer.
- Trial court ruled the homeowners’ claims were covered under Harleysville’s policies and that Harleysville was jointly and severally liable; prejudgment interest issues were unresolved.
- Court reheard, clarifying coverage exists for progressive damages and addressing allocation among insurers under a time-on-risk framework, overruling Century Indemnity.
- This opinion remands for further proceedings applying time-on-risk allocation to distribute damages among Crossmann’s triggered insurers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether progressive property damage triggers CGL coverage | Crossmann contends ongoing damage falls within occurrence coverage. | Harleysville argues coverage limited by policy terms and exclusions. | Yes, occurrence coverage is triggered for progressive damages. |
| What framework governs allocation among triggered insurers | Crossmann supports joint and several or a broad allocation. | Harleysville supports pro rata allocation based on time on risk. | Adopt pro rata/time-on-risk allocation; overrule joint/several approach. |
| Whether Century Indemnity is controlling on allocation | Century Indemnity would allocate based on a broader or single-period approach. | Century Indemnity is consistent with prior law and should govern. | Overruled; Century Indemnity rejected; adopt time-on-risk framework. |
| How to implement the time-on-risk allocation when exact damages per period are unknown | Default calculations should fairly allocate across periods. | Discretion may be limited; precise apportionment is ideal but often impractical. | Adopt a default pro rata formula (years on risk ÷ total years of damage progression) with court flexibility for practical adjustments. |
Key Cases Cited
- Joe Harden Builders, Inc. v. Aetna Casualty & Surety Co., 326 S.C. 231 (1997) (modified continuous trigger; injury-in-fact and progression across policies)
- Century Indemnity Co. v. Golden Hills Builders, Inc., 348 S.C. 559 (2002) (original allocation framework; paired with time-on-risk critique)
- Boston Gas Co. v. Century Indemnity Co., 910 N.E.2d 290 (Mass. 2009) (pro rata allocation promotes stability; supports time-on-risk concept)
- Joe Harden Builders, Inc. v. Aetna Casualty & Surety Co., 326 S.C. 231 (1997) (injury-in-fact trigger; multiple policies during progressive damage)
- Newman (Auto Owners Ins. Co. v. Newman) v. Auto Owners Insurance Co., 385 S.C. 187 (2009) (progressive-damage framework and occurrence concept)
- L-J, Inc. v. Bituminous Fire & Marine Ins. Co., 366 S.C. 117 (2005) (predecessor discussion of triggering and property damage)
- Montrose Chemical Corp. v. Admiral Ins. Co., 10 Cal.4th 645 (1995) (trigger of coverage description and timing in complex claims)