Pennsylvania National Mutual Casualty Insurance v. Parkshore Development Corp.
403 F. App'x 770
3rd Cir.2010Background
- Parkshore Development Corporation was the general contractor and developer of Catalina Cove Condominiums in Linwood, New Jersey, using subcontractors for roofing, framing, windows/doors, caulking, irrigation, grading, foundation, gutters, and leaders.
- Construction completed between 1989 and 1998, and in July 1999 the CCCA notified Parkshore that stucco caulking around some windows caused water leakage.
- Parkshore hired Keen’s Caulking & Waterproofing to re-caulk the affected windows.
- In October 2006 the CCCA sued Parkshore for breach of contract, negligence, implied warranties, remediation negligence, and Consumer Fraud Act violations; Hyland’s reports indicated site deficiencies and water damage to multiple components.
- Parkshore tendered defense to Penn National, which issued a CGL policy for 1989–2006; Penn National sought a declaratory judgment that there was no coverage.
- The District Court granted summary judgment for Penn National on all claims except consumer fraud; this appeal concerns coverage under the policy for the underlying water-damage claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether faulty workmanship causing damage to Parkshore's own work constitutes an occurrence | Parkshore argues the damage is an occurrence under the policy. | Penn National maintains no occurrence because the damage is to Parkshore’s own work. | No occurrence; damages to own work do not trigger coverage. |
| Whether water intrusion from defective workmanship is an occurrence under the NJ approach | Parkshore relies on Weedo to show consequential damage qualifies as an occurrence. | Defects causing damage to completed work are not an occurrence per Weedo and later cases. | Weedo does not support coverage for damage to the completed project itself; no occurrence. |
| What is Parkshore's ultimate exposure under the CGL policy for the underlying suit | Parkshore contends there is coverage for damage to non-defective work caused by subcontractors. | Penn National contends there is no coverage because the damage was to Parkshore’s own work. | Affirmed; whole project was Parkshore’s own work, not an insured occurrence. |
Key Cases Cited
- Weedo v. Stone-E-Brick, Inc., 405 A.2d 788 (N.J. 1979) (distinguishes fault in subcontractor work from insured occurrence)
- Firemen’s Ins. Co. of Newark v. Nat’l Union Fire Ins. Co., 904 A.2d 754 (N.J. Super. Ct. App. Div. 2006) (faulty workmanship causing damage to general contractor’s work not an occurrence)
- S.N. Golden Estates, Inc. v. Continental Cas. Co., 680 A.2d 1114 (N.J. Super. Ct. App. Div. 1996) (considered occurrence when faulty construction damaged neighboring property)