HDI-Gerling America Insurance Company v. Morrison Homes, Inc., 701 F.3d 662

Diversity action addressing whether property damage from California homebuyer class action is an “occurrence” under Morrison’s CGL policy with Gerling.
Policy insuring agreement: pay damages for “bodily injury” or “property damage” caused by an “occurrence”; definition of “occurrence” includes an accident or exposure to harmful conditions.
Allegations in Rosa plaintiffs’ amended complaint (April 2006) include concealment, misrepresentation, and warranty claims related to construction defects (gravel layer omission, vapor retarder, cement-to-water ratio).
District Court granted summary judgment for Gerling (Sept. 17, 2010): no coverage because claims were not based on an “occurrence” and/or were barred by exclusions, including business risk and “expected or intended injury.”
Rosa plaintiffs’ damage centered on damage to Morrison’s own work (homes) rather than to “other property.”
Eleventh Circuit certifies Georgia Supreme Court questions clarifying whether (1) an “occurrence” requires damage to “other property,” and (2) if not, whether claims must avoid contract/fraud/breach-of-warranty related to non-disclosure to trigger coverage.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether, for an occurrence to exist under a standard CGL policy, Georgia law requires damage to other property.	Morrison; occurrence can include damage to other property due to faulty workmanship.	Gerling; no occurrence when damage is limited to the insured’s own work.	Questions certified; no ruling on the merits.
If the answer to (1) is negative, whether the claims must not be for breach of contract, fraud, or breach of warranty from failure to disclose material information.	Morrison contends exclusions do not bar coverage where an occurrence exists.	Gerling argues exclusions or policy terms preclude coverage for such claims.	Questions certified; no ruling on the merits.

Hathaway II v. American Empire Surplus Lines Ins. Co., 707 S.E.2d 369 (Ga. 2011) (defines occurrence as unexpected damage, clarifying ‘other property’ treatment)
Hathaway I v. Am. Empire Surplus Lines Ins. Co., 686 S.E.2d 855 (Ga. Ct. App. 2009) (faulty workmanship may constitute an occurrence when it damages other property)
McDonald Constr. Co. v. Bituminous Cas. Corp., 632 S.E.2d 420 (Ga. Ct. App. 2006) (construction defects; coverage for damage to property other than the completed work)
Custom Planning & Dev., Inc. v. Am. Nat’l Fire Ins. Co., 606 S.E.2d 39 (Ga. Ct. App. 2004) (discussion of “other property” concept and exclusions)
Forster v. State Farm Fire & Cas. Co., 704 S.E.2d 204 (Ga. Ct. App. 2010) (treatment of exclusions and duties to defend under Georgia law)
JNJ Found. Specialists, Inc. v. D.R. Horton, Inc., 717 S.E.2d 219 (Ga. Ct. App. 2011) (duty to defend depends on policy language and underlying complaint; ambiguity resolved for insured)
SawHorse, Inc. v. Travelers Prop. Cas. Co., 604 S.E.2d 544 (Ga. Ct. App.) (relation of ‘other property’ concept to coverage (cited in background discussions))
Guar. Trust Co. v. York, 326 U.S. 99 (1945) (guidance on when to certify questions and deference to controlling law)