103 So. 3d 1280
La. Ct. App.2012Background
- Provosts hired HLP to build their home; defects emerged after possession and NHWA governs such claims.
- HLP obtained a CGL policy from AVIC for Oct 2004–Oct 2005; AVIC initially defended but moved for summary judgment.
- AVIC argued no coverage for breach of contract, poor workmanship, mold/water/moisture, and related exclusions; trial court granted summary judgment for AVIC.
- Provosts appeal contends that exclusions do not bar coverage and that PCOH could cover their claims as products-completed operations.
- This appellate decision affirms dismissal, holding AVIC properly applied breach-of-contract and work-product exclusions to defeat coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the breach-of-contract exclusion bar coverage? | Provosts argue NHWA/public policy; not solely contract-based. | AVIC breach exclusion excludes coverage for breach of contract claims. | Yes; breach-of-contract exclusion applies and coverage is denied. |
| Does products-completed operations hazard (PCOH) cover the Provosts' claims for poor workmanship? | PCOH covers damages arising from defective work; AVIC charged for PCOH but not provided. | PCOH does not cover damage to the work product itself; the claim is for the product/work itself. | No; PCOH does not apply to the Provosts' claims; work-product exclusions control. |
| Are the work-product exclusions or related policy exclusions controlling the outcome? | Subcontractor involvement could alter application of exclusions in favor of coverage. | Work-product exclusions preclude coverage for damage to the insured's own product or work. | Yes; work-product exclusion applies, denying coverage. |
Key Cases Cited
- Everett v. Philibert, 13 So.3d 616 (La.App. 1 Cir. 2009) (negligence claims must be separate from breach of contract to survive exclusion)
- McNamara v. Augustino Brothers, Inc., 13 So.3d 736 (La.App. 4 Cir. 2009) (no coverage for negligent breach of contract under CGL policy)
- Supreme Servs. & Specialty Co., Inc. v. Sonny Greer, Inc., 958 So.2d 634 (La. 2007) (policy limits on liability; insured must prove exclusions or limits apply)
- McMath Construction Co., Inc. v. Dupuy, 897 So.2d 677 (La.App. 1 Cir. 2004) (work-product exclusions eliminate coverage for damage to insured's product/work)
- Stewart Interior Contractors, L.L.C. v. MetalPro Indus., L.L.C., 969 So.2d 653 (La.App. 4 Cir. 2007) (cites interpretation of PCOH vs work-product exclusions)
- Calcasieu Parish Sch. Bd. v. Lewing Constr. Co., Inc., 971 So.2d 1275 (La.App. 3 Cir. 2007) (public policy and insurance coverage interplay in construction claims)
- McNamara v. Augustino Brothers, Inc., 13 So.3d 736 (La.App. 4 Cir. 2009) (see above (duplicate entry kept for emphasis))