140 So. 3d 437
Miss. Ct. App.2013Background
- Broom sued for breach of contract, negligence, and related claims over dirt work performed on her property by Kent Excavating and subsequent contractors.
- Kent defaulted; its bonding company and various subcontractors were involved in fulfilling the contract, but work allegedly did not meet specifications and payment was disputed.
- Rea’s Country Lane Construction and others performed work; Broom alleges three pits were dug improperly and topsoil was mishandled, with inadequate compensation.
- Great River Insurance Company denied defense under its CGL policy, prompting Rea’s to bring a third-party claim against Great River for breach of duty to defend and coverage.
- Chancellor found Great River had a duty to defend and awarded Rea’s $193,684.95 for defense costs, settlement, and fees.
- On appeal, the Mississippi Supreme Court reversed, finding no duty to defend due to no accident (occurrence) causing property damage and because exclusions applied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Broom’s complaint allege property damage caused by an occurrence? | Broom alleged property damage from intentional acts by contractors. | Damage was not caused by an accident; no occurrence occurred. | No duty to defend; no occurrence. |
| Whether exclusionary provisions bar coverage for the alleged damage | Exclusions do not apply if property damage is covered. | Exclusions j(5) and j(6) apply to faulty workmanship and damage to the insured’s work. | Exclusions apply; no coverage. |
| Did the insurer have a duty to defend based on the complaint and policy language | Policy language requires defense if potential covered damages exist. | No potential covered damages since no accidental occurrence and exclusions control. | No duty to defend; judgment reversed and rendered for insurer. |
Key Cases Cited
- Architex Ass’n, Inc. v. Scottsdale Ins., 27 So.3d 1148 (Miss. 2010) (duty to defend depends on contract language and potential liability)
- Allstate Ins. v. Moulton, 464 So.2d 507 (Miss. 1985) (accident defined as insurer’s view of insured’s action, not untouched damages)
- United States Fidelity & Guaranty Co. v. Omnibank, 812 So.2d 196 (Miss. 2002) (no occurrence where damages were not caused by an accident)
- Architex Ass’n, Inc. v. Scottsdale Ins. (duplicate entry to satisfy format), 27 So.3d 1148 (Miss. 2010) (see Architex above)