Pending before the Court are the parties' Motions for Summary Judgment (Docs. 58 and 60), Responses (Docs. 67 and 69), and Replies (Docs. 72 and 73).
Background
In July 2012, Sunwestern Contractors Incorporated ("Sunwestern") successfully bid on a project with the City of Tucson (the "City") for the construction of a water main collector system (the "Project"). The Project involved the construction of over 17,200 feet of pipeline, with pipe sizes ranging from 16, 24, 30, 36, 48, and 54 inches in diameter. In May 2013, Sunwestern conducted a pressure-test of the pipeline when several flanges (connections between pipe sections that include bolts and gaskets) came apart (the "Incident"). Although 10,000 feet of pipeline was previously pressure tested and accepted by the City, during the May 2013 test, the 48 and 54-inch pipes began to leak. The flange failure caused water to tear out gaskets (seals which fill the space between pipes to prevent leakage), seriously damaging the pipeline, components of the pipeline, and surrounding areas.
Although repairs on those damaged items were still necessary, the City terminated its contract with Sunwestern on November
In January 2014, the City contacted Cincinnati and demanded that Cincinnati cover its claims. Cincinnati investigated the Incident in April 2014 and denied coverage on October 28, 2014, claiming that the Incident did not constitute an "occurrence." (Doc. 59-7, pg. 2-13). The City later successfully made a claim against Sunwestern's performance bond for approximately $2,600,000.00. (Doc. 61-6, pg. 18). Sunwestern claims that Cincinnati improperly denied coverage. Cincinnati claims that Sunwestern is not entitled to coverage.
Legal Standard
"Summary judgment is appropriate when, viewing the evidence in the light most favorable to the nonmoving party, 'there is no genuine dispute as to any material fact.' " United States v. JP Morgan Chase Bank Account No. Ending 8215 in Name of Ladislao V. Samaniego, VL: $446,377.36 ,
Since this is a diversity case, the Court will apply Arizona law. See Gasperini v. Ctr. for Humanities, Inc. ,
Analysis
Sunwestern and the City dispute their respective responsibility for the Incident. Sunwestern claims that the Incident occurred due to the City's engineering deficiencies. See (Doc. 60, pg. 3) ("Sunwestern's position was that Tucson Water's engineering deficiency caused the problem, as it did not establish proper torque values for the bolts, and the red rubber gaskets it selected, were not adequate for the larger pipes."); (Doc. 58, pg. 12) (The City's position is that Sunwestern's "improper torqueing of bolts" led to the flange failures). There is no dispute that the Incident resulted from the inadequate installation of
As has been previously noted, Sunwestern was covered by two separate policies during the time of the Incident: the CGL Policy and the UMB Policy. The Court will first address coverage under the CGL Policy, then address coverage under the UMB Policy in a separate section.
With respect to the type of damages covered, the CGL Policy provides, in pertinent part:
We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies.
This insurance applies to "bodily injury" and "property damage" only if: (1) The "bodily injury" or "property damage" is caused by an "occurrence."
"Property damage" is defined as:
a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it.
"Occurrence" is defined as:
An accident, including continuous or repeated exposure to substantially the same general harmful conditions.
(Doc. 59-1, pg. 20).
1. Was There an Occurrence?
The threshold question is whether the Incident constitutes an occurrence as defined by the CGL Policy. If the Incident was not an occurrence, the Court need not analyze further since the CGL Policy only provides coverage for "occurrences." Arizona courts have previously held that faulty workmanship, standing alone, is not an occurrence. See U.S. Fid. & Guar. Corp. v. Advance Roofing & Supply Co. ,
However, subsequent cases note the "distinction between faulty workmanship standing alone and faulty workmanship that causes damage to property." Lennar Corp. v. Auto-Owners Ins. Co. ,
The Court finds it helpful to provide an illustrative example. Company X builds a home but installs the roof shingles in a careless manner. The roof eventually begins to leak, causing water damage to the house's wood flooring. Since the faultily constructed roof caused property damage (water damage to the floor), that incident is an occurrence. See
Cincinnati maintains throughout its briefing that the Incident does not constitute an occurrence because the "damages claimed by the City related only to the cost of repairing and completing faulty work performed by Sunwestern. There was no claim for damage to 'other property' or for damage to other portions of the Project built by others. Thus, there was no 'occurrence' and, if there were, the 'your work' exclusion would apply defeating coverage." (Doc. 58, pg. 9); see also (Doc. 72, pg. 7) ("Here, it is undisputed that the damages claimed by the City relate only to the cost of repairing faulty work performed by Sunwestern, and completing Sunwestern's unfinished work. There was no claim for damage to 'other property' or for damage to other portions of the Project built by others. Thus, there was no 'occurrence' under Sunwestern's CGL or UMB policies.").
Cincinnati's argument fails. The relevant inquiry is not whether there was damage to "other property" or damage to "other portions of the Project built by others." The relevant inquiry is whether Sunwestern's faulty workmanship resulted in property damage - and it is uncontroverted that it did. Like Company X's faulty roof leading to water damage to the floor, here, improper installation of pipe components led to damage to the pipeline and surrounding areas. The record establishes that flanges - the connections between sections of pipe including bolts and gaskets - were improperly installed. See (Doc. 61, pg. 4) ("When Sunwestern tested the lines and started bringing up the water pressure, several flanges [pipe connections] came apart. Flanges are the connections between the sections of pipe and include the bolts and gaskets."). Those flanges later failed, causing "damaged gaskets, damaged pipe bedding, and water infiltration. When a gasket would fail, the water in the pipeline would drain into the trench. The water would have to be pumped out and the bedding would need to be replaced." (Doc. 61-6, pg. 47). Even Cincinnati acknowledges that the damage caused by the improperly installed flanges was not limited to the flanges itself. See (Doc. 59, pg. 2) ("There was damage to the pipes, flanges, pipe trenches, and pipe bedding, but no damage to property other than the Project.").
This is not a situation where Sunwestern is solely seeking to recover the cost of repairing its own defective work. Sunwestern has made a showing that serious property damage resulted from its defective work and consequential property damage resulting from faulty work is an occurrence under the CGL Policy. See Double AA Builders, Ltd. v. Preferred Contractors Insurance Company, LLC ,
2. Are There Any Applicable Exclusions in the CGL Policy?
Although the Incident is an "occurrence," coverage may still be precluded based upon any applicable policy exclusions. Cincinnati alleges that exclusions j(5), j(6), and (l) apply to defeat coverage. Sunwestern alleges that those exclusions, when read together, create an ambiguity, and that "[a]ny ambiguity should be read strictly in Sunwestern's favor." (Doc. 60, pg. 8).
Exclusion j of the CGL Policy precludes "Property damage" to:
(5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations;
(6) That particular part of any property that must be restored, repaired or replaced because "your work" was incorrectly performed on it.
Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed operations hazard".
"Your work" is defined as:
(1) Work or operations performed by you or on your behalf; and
(2) Materials, parts or equipment furnished in connection with such work or operations.
(Doc. 59-1, pg. 24).
A. Exclusion j(6)
Exclusion j(6) precludes coverage for incorrectly performed work. However, exclusion j(6) also includes its own exclusion - the products-completed operations hazard. Exclusion j(6) does not apply to property damage included in the products-completed operations hazard, which is defined in the CGL Policy as follows:
"Products-completed operations hazard": a. Includes all "bodily injury" and "property damage" occurring away from premises you own or rent and arising out of "your product" or "your work" except:
(1) Products that are still in your physical possession; or
(2) Work that has not yet been completed or abandoned. However, "your work" will be deemed completed at the earliest of the following times:
(a) When all of the work called for in your contract has been completed; or
(b) When all of the work to be done at the job site has been completed if your contract calls for work at more than one job site; or
(c) When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project.
Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed.
(Doc. 59-1, pg. 24).
Sunwestern summarily dismisses the applicability of exclusion j(6) by claiming that it "does not apply to Completed Operations." (Doc. 60, pg. 12). The Court agrees. Exclusion j(6) explicitly precludes coverage only for incorrectly performed work that has not been completed. Therefore, if Sunwestern completed the Project, exclusion j(6) would not apply.
In Desert Mountain Properties Ltd. P'ship v. Liberty Mut. Fire Ins. Co. ,
Consistent with these cases, we hold the Broad Form Property Damages exclusion1 does not bar coverage of damage to non-defective property resulting from faulty workmanship. By its terms, the exclusion applies only to the repair of "that particular part of any property ... made ... necessary by reason of faulty workmanship thereon." Given the narrow scope of the exclusion, we conclude it applies only to the repair of defective workmanship and not to the repair of damage that resulted from the defective workmanship. Because the endorsement excludes only damage to property "by reason of faulty workmanship thereon," the exclusion did not bar coverage of damage to non-defective property resulting from the faulty soil compaction in this case.
Thus, while exclusion j(6) unambiguously excludes coverage for damage to the flanges and other incorrectly constructed portions of the pipeline, if they were not "completed," it does not exclude coverage for consequential damage to non-defective property caused by that incorrectly performed work. See Mid-Continent Cas. Co. v. JHP Dev., Inc. ,
B. Exclusion j(5).
As previously noted, exclusion j(5) excludes coverage for property damage to:
That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations ...
(Doc. 59-1, pg. 24).
Like exclusion j(6), the Court notes that exclusion j(5) only precludes coverage for work that is still in progress. Although both parties reference exclusion j(5) in their briefings, neither party provides a particularly meaningful analysis of its applicability. In addressing exclusion j(5), Sunwestern claims: "The damage here was
Sunwestern lodges no objection to j(5) based upon an ambiguity in the CGL Policy, rather, Sunwestern denies exclusion j(5) applies because it specifically excludes coverage for property damage to "real property" as opposed to "personal property". Sunwestern contends that the damage that occurred was limited to "personal property (piping, flanges and gaskets), not real property." (Doc. 73, pg. 7). The CGL Policy clearly makes a distinction between "real property" and "personal property." For example, exclusion j(4) precludes coverage specifically for "[p]ersonal property in the care, custody or control of an insured." (Doc. 59-1, pg. 24).
Although the CGL Policy makes a clear distinction between "personal property" and "real property," it neglects to provide a definition for either term. In Arizona, undefined words in an insurance contract are defined in the common-sense terms of the average layman rather than in technical terms. Malanga v. Royal Indem. Co. ,
In that same manner, Black's Law Dictionary defines real property as: "[l]and and anything growing on, attached to, or erected on it, excluding anything that may be severed without injury to the land. Real property can be either corporeal (soil and buildings) or incorporeal (easements)." Property , Black's Law Dictionary (10th ed. 2014). Therefore, the Court construes the phrase "real property" in exclusion j(5) as encompassing the pipeline, including the internal components (flanges and gaskets) since the common-sense understanding of the phrase "real property" refers to the actual land and structures affixed to that land.
This interpretation is supported by the text in an endorsement to the CGL Policy which discusses "real property" and "personal property" and provides, in pertinent part:
If the Commercial Property Coverage Part or the Farm Property Coverage Form provides coverage for:
1. Real property which is used predominantly for residential purposes and consists of one through four dwelling units; and/ or
2. Personal property (except business or farm personal property) of a person residing in such real property;
(Doc. 59-1, pg. 12).
There, "real property" unambiguously refers to a building (dwelling unit), whereas
Although Arizona courts have not specifically interpreted exclusion j(5), courts in other jurisdictions have, and tend to favor exclusion. See e.g. Bradfield v. Mid-Continent Cas. Co. ,
Therefore, the Court finds that exclusion j(5) and j(6) unambiguously preclude coverage for the Incident and all residual property damage stemming from the Incident. However, the Court notes that exclusions j(5) and j(6) only preclude damage to work that was not yet completed, or still in progress. However, even if Sunwestern completed the Project, another exclusion may apply, and exclusion (l) does.
C. Exclusion (l).
Exclusion (l) in the CGL Policy excludes:
"Property damage" to "your work" arising out of it or any part of it and included in the "products-completed operations hazard".2
Exclusion (l) unambiguously precludes coverage for property damage to "work or operations performed by" Sunwestern that is included in the products-completed operations hazard. Put more simply, exclusion (l) precludes coverage for Sunwestern's completed work. Therefore, the combination of exclusion j(5), exclusion j(6), exclusion (l), and the products-completed operations hazard seemingly preclude any coverage for the Incident
D. Ambiguity of Exclusions.
While the exclusions appear to unambiguously deny coverage for Sunwestern's faulty workmanship, Sunwestern argues that the exclusions are ambiguous and, therefore, Sunwestern is entitled to coverage. See (Doc. 67, pg. 13) ("Pursuant to its plain language, the 'your work' exclusion applies only when the project is completed. Cincinnati's position is that the Tucson Water Project was not complete. Therefore, exclusion (l) does not apply. Moreover, if the Tucson Water Project was complete, the exclusion is ambiguous as it conflicts with the Completed Operations Coverage."); (Doc. 60, pg. 15) ("A policy containing a definition of Completed Operations coverage, that covers 'your work' and contains a separate 'your work' exclusion, is, on its face, ambiguous."); id. at 16 ("Arizona Courts, however, are very likely to find coverage. Insurance policies are read broadly to provide coverage to the insured and ambiguous policy provisions are construed against the insurer in favor of coverage.").
While no Arizona courts have dealt with this specific issue, courts in various jurisdictions have, and generally reach the same conclusion - that there is no ambiguity between exclusion j(6), exclusion (l), and the products-completed operations hazard, and that policy-holders are not entitled to coverage for their own faulty work. For example, in Crossen v. Am. Family Mut. Ins. Co. , Premier, a carpet and floor cleaning business, was insured through a commercial general liability policy with American Family, with relevant terms and exclusions that are identical to the CGL Policy. No. 09-CV-02859-WDM-KLM,
The products-operations completed hazard refers to property damage arising out of the insured's work after work is completed, which I understand to mean damage to property other than the insured's work. Exclusion (l) then excludes coverage for damage to the insured's work, which includes work or operations performed by the insured or warranties or representations about the quality of the work. Because these two provisions are not in conflict, I conclude there is no ambiguity.
Crossen ,
In Lukes v. Mid-Continent Cas. Co. , the District Court for the District of Montana reached a similar conclusion regarding the interaction between the allegedly contradictory provisions. There, the Court explained that although exclusion j(6) includes an exception excluding work contained within the products-completed operations hazard, it did not necessarily follow that the existence of the exception meant that work contained within the products-completed operations hazard is covered - only that it is exempted from exclusion j(6). More specifically, the Court held:
The Lukes maintain that there is a fatal ambiguity between Exclusion j(6) and [exclusion (l) ]. They interpret the provision stating that Exclusion j(6) "does not apply to 'property damage' included in the 'products-completed operations hazard,' " to mean that property damage included in the products-completed operations hazard is covered by the Policy. They therefore insist that [exclusion (l) ], which excludes coverage for certain property damage included in the products-completed operations hazard, directly contradicts that provision. In interpreting the exception to Exclusion j(6), the Court is not at liberty to add words that were omitted from the policy. The exception merely states that Exclusion j(6) does not apply to property damage included in the products-completed operations hazard. It does not say that property damage included in the products-completed operations hazard is therefore covered by the Policy. Exclusion j(6) does not apply to such property damage, but some other exclusion well might, and [exclusion (l) ] does.
No. CV 12-47-M-DLC,
Sunwestern appears to believe that products-completed operations hazard coverage entitles it to coverage for its own faulty work, if that faulty work led to property damage that occurred after completion of the Project. However, nowhere in the products-completed operations hazard provision does it state that faulty work is covered. The products-completed operations hazard provision only provides that it: "Includes all 'bodily injury' and 'property damage' occurring away from premises you own or rent and arising out of 'your product' or 'your work.' " (Doc. 59-1, pg. 38).
The products-completed operations hazard provision is still subject to any relevant exclusions and any faulty work that is encompassed in the products-completed operations hazard provision is unambiguously excluded from coverage by exclusion (l). This is consistent with the purpose of a commercial general liability policy. Commercial general liability policies are not intended to protect contractors from liability for their own work. See Patton v. Mid-Continent Cas. Co. , No. CV H-15-1371,
Furthermore, Sunwestern's position belies the purpose of the products-completed operations hazard provision. "[The] completed operations hazard provision insures a general contractor against certain risks that occur after a construction project is finished and is in the owner's control. However, exclusions to such a provision typically preclude coverage for damage resulting to a contractor's own work. Thus, the general contractor is covered only for damage to property he or she did not construct. The idea behind this exclusion is that liability insurance should not be a warranty or performance bond for general contractors, because they control their work. The exclusion is thought to discourage careless work by making general contractors pay for losses caused by their own defective work." Fireguard Sprinkler Sys., Inc. v. Scottsdale Ins. Co. ,
Despite the unambiguous nature of the exclusions and the products-completed operations hazard provision, Sunwestern maintains that "[a] policy containing a definition of Completed Operations coverage, that covers 'your work' and contains a separate 'your work' exclusion, is, on its face, ambiguous." (Doc. 60, pg. 15). Sunwestern further alleges that "Courts have held that due to that ambiguity, the work of the insured is covered, and any separate 'your work' exclusion does not apply."
Mike Hooks and Kidd appear to be the last refuge for plaintiffs seeking coverage for faulty workmanship. In Am. Home Assur. Co. v. AGM Marine Contractors, Inc. , the District Court for the District of Massachusetts was faced with an identical scenario, and wrote:
Citing Mike Hooks and Kidd , respondent appears to contend that the policy is ambiguous because the two exclusions quoted above take away coverage afforded by the "products-completed operations hazard" provision. But other courts, including the Court of Appeal of Louisiana, have criticized the reasoning of Mike Hooks and Kidd . See Joe Banks Drywall & Acoustics, Inc. v. Transcontinental Ins. Co. ,, 985 (La. Ct. App. 2000) ... Similarly, the policy at issue here is not ambiguous because-notwithstanding Mike Hooks and Kidd -the two exclusions quoted above do not eliminate all the risks covered by the "products-completed operations hazard" provision. This provision, when read with the two exclusions, does not provide coverage for faulty workmanship; instead, it unambiguously provides coverage for damages to persons or other property occurring after completion of the insured's work and away from the insured's premises. 753 So.2d 980
Although these cases are instructive, none are binding, and "[v]arying judicial interpretations ... do not automatically render an insurance policy ambiguous." Employers Mut. Cas. Co. v. DGG & CAR, Inc. ,
3. Are There Any Applicable Exclusions in the UMB Policy?
As a threshold matter, the UMB Policy includes a provision identical to exclusion (l) in the CGL Policy in section I(B)(7) ("exclusion (7)"). (Doc. 59-2, pg. 7). For the reasons articulated above, exclusion (7) in the UMB Policy precludes property damage for Sunwestern's work that is included within the products-completed operations hazard, i.e. work that has been completed.
The only remaining question is whether the UMB Policy includes an exclusion that precludes coverage for property damage to incomplete work. The UMB Policy has one such exclusion: exclusion (A)(1)(b).
Exclusion (A)(1)(b) excludes "property damage" to:
Property being transported, installed, erected, or worked upon by the insured or any contractors or subcontractors working directly or indirectly on any insured's behalf.
(Doc 59-3, pg. 13).
Sunwestern itself concedes that this exclusion encompasses property damage that occurs while work is still in progress and writes:
Sunwestern was unable to located [sic] any case law interpreting that provision. The above provision, however, addresses property damage occurring while work is occurring. It addresses property "being" transported, installed, etc. It does not address accidents or damages occurring after the work or part of the work has been installed. In this case, the accidents occurred after Sunwestern had installed the pipeline, gaskets, and flanges and during testing. The flanges were not "being worked upon". That provision must be read strictly against the insurer, as it is an exclusion. "Nothing within that exclusion explicitly limits coverage to repairs needed after the work fails."
(Doc. 60, pg. 13).
Sunwestern repeats that argument, nearly verbatim, in its Response (Doc. 67) and Reply (Doc. 73). Exclusion (A)(1)(b) unambiguously precludes "property damage" to property that is being actively worked on. While the Court agrees that it does not apply to work that has already been completed, even if the Project was "completed," as has been previously discussed, exclusion (7) of the UMB Policy would preclude coverage. Alternatively, the UMB Policy contains an additional exclusion in section I(B)(5) ("exclusion (5)") that also operates to preclude coverage.
Specifically, exclusion (5) precludes:
"Property damage" to property owned by any insured, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property.
(Doc. 59-2, pg. 7).
Sunwestern alleges that exclusion (5) does not apply because "Sunwestern did not own the [Project]." (Doc. 60, pg. 14). In its Response, Cincinnati provided evidence that the City was named as an additional insured in both the CGL and UMB Policies. See (Doc. 69, pg. 15) ("the City did own the Project and was an additional insured under both the CGL and UMB policies"); see also (Doc. 70-2) (Certificate of Liability Insurance naming the City as an additional insured under the CGL and
Therefore, neither the CGL Policy, nor the UMB Policy provides coverage for the Incident.
4. Did Sunwestern Have a Reasonable Expectation of Coverage?
Sunwestern last argues that its "principals and employees had a reasonable expectation that they would be covered for any claim regarding the condition of Sunwestern's work. They were told they had coverage for faulty workmanship and for completed operations. They had been covered for such claims by Cincinnati previously. Under those circumstances, Sunwestern's insurance with Cincinnati covers Tucson Water's claim." (Doc. 60, pg. 17).
Based on Sunwestern's allegations, it appears that its "reasonable expectation" of coverage stems from two places: (1) alleged statements by its insurance broker that "they had coverage for faulty workmanship and for completed operations;" and (2) a prior allegedly related incident where Cincinnati provided coverage.
A. Insurance Broker Statements.
Much of Sunwestern's alleged expectation of coverage originated from statements made by its own insurance broker, Leon Byrd, and not from Cincinnati directly. Although Sunwestern incorrectly asserts that Mr. Byrd is Cincinnati's agent, see (Doc. 61, pg. 31), the record indicates that Mr. Byrd is affiliated with an independent agency - The Mahoney Group. See (Doc. 61-4, pg. 56); (Doc. 61-5, pg. 8); (Doc. 61-6, pg. 50). Mr. Byrd allegedly "explained to Sunwestern each time the insurance renewed, Sunwestern had coverage for its work, for completed operations, and for failures of the work that Sunwestern performed." (Doc. 61, pg. 31).
"The reasonable expectations doctrine, as applied in Arizona, is a rule of construction that enables courts to negate boilerplate terms of an insurance agreement that take away coverage provided for elsewhere in the contract. The doctrine is applied in several situations; for instance, a court can negate a boilerplate term when that term could not be understood by a reasonably intelligent consumer or when an activity by the insurer creates an objective impression of coverage in the mind of a reasonable insured. The doctrine does not, however, operate to add coverage where such coverage is nowhere stated in the policy." Gregorio v. GEICO Gen. Ins. Co. ,
B. Prior Incident.
Sunwestern also alleges that it had a reasonable expectation of coverage based upon a prior incident where Cincinnati provided coverage. Sunwestern vaguely describes the incident in its statement of
Rather than rebutting Cincinnati's detailed explanation of the Metro Water case, in its response to Cincinnati's Motion for Summary Judgment, Sunwestern merely reasserts that "[it] had been covered for similar claims by Cincinnati previously" without providing additional detail. (Doc. 67, pg. 17). Based on the information provided, the Court agrees that the Metro Water case is not an apt comparison and does not form the basis for Sunwestern to have a reasonable basis for coverage. As discussed earlier, exclusion (l) contains an explicit exception for work performed by a subcontractor. As the Metro Water case involved equipment installed by a subcontractor, it is unsurprising that Cincinnati was compelled to provide coverage.
The Court finds that this prior incident is distinguishable and does not create a reasonable expectation of coverage for the Incident. See Aetna Cas. & Sur. Co. v. Dannenfeldt ,
Accordingly, IT IS ORDERED:
1. Plaintiff's Motion for Partial Summary Judgment (Doc. 60) is denied .
2. Defendant's Motion for Summary Judgment (Doc. 58) is granted .
3. Because the Court concludes as a matter of law that Plaintiff Sunwestern Contractors Incorporated is not entitled to coverage, and that issue is dispositive of Plaintiff's claims, judgment shall enter in favor of Defendant Cincinnati Indemnity Company and against Plaintiff Sunwestern Contractors Incorporated on all claims.
4. The Clerk of Court is directed to close its file on this matter.
Notes
This exclusion provides, in pertinent part: "Coverage is not provided for the insured's liability for damage: To that particular part of any property, not on premises owned by or rented to the insured, the restoration, repair, or, replacement of which has been made or is necessary by reason of faulty workmanship thereon by or on behalf of the insured." Desert Mountain Properties Ltd. P'ship v. Liberty Mut. Fire Ins. Co. ,
Exclusion (l) also includes a provision stating that it: "does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor." However, since Sunwestern used no subcontractors, the Court will not address the applicability of this provision. See (Doc. 61, pg. 10) ("The work at issue is Sunwestern's, not subcontractors' work.").