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googletag.pubads().collapseEmptyDivs(true); }); </script> </div> </div> <p>After Tocci sought coverage under its CGL policy with plaintiff Admiral Insurance Company, a U.S. District Court judge ruled in a declaratory action that Admiral had no duty to defend against the suit because the damage alleged in the complaint wasn’t “property damage” caused by an “occurrence” within the meaning of the policy. <p>The 1st Circuit affirmed but, in the absence of guidance from the Supreme Judicial Court, opted not to address whether damage to non-defective work as a result of a subcontractor’s faulty work constitutes covered “property damage” caused by an “occurrence.” <p>Instead, the court found that a so-called “(j)(6)” workmanship exclusion in the policy – which bars coverage for “that particular part” of a property that must be repaired as a result of “your work” that was incorrectly performed – precluded a defense.<div class="article_dfp_ads"> <div id="div-gpt-ad-in_content_300x250_b" class="div-gpt-ad-in_content_300x250_b in_content_300x250_b dfp_ad_pos"> <script type='text/javascript'> googletag.cmd.push(function () { googletag.display('div-gpt-ad-in_content_300x250_b'); googletag.pubads().collapseEmptyDivs(true); }); </script> </div> </div> <p>Tocci argued that the exception didn’t apply because it wasn’t seeking coverage for the cost of repairing and replacing the defective work itself. Instead, it asserted that it sought coverage for property damage due to its subcontractor’s defective work which, it argued, would not fall under the (j)(6) exclusion. <p>“[W]e disagree,” wrote Judge Jeffrey R. Howard for the court. “The complaint alleges damage resulting from Tocci’s ‘incorrectly performed’ work on the entire project. Thus, ‘[t]hat particular part of any property that must be restored, repaired or replaced because “[Tocci’s] work” was incorrectly performed on it’ refers to the entirety of the project where Tocci was the general contractor charged with supervising and managing the project as a whole.” <p>The 17-page decision is<a href="https://masslawyersweekly.com/2024/11/12/insurance-duty-to-defend-subcontractors-defective-work/"><em> Admiral Insurance Company, et al. v. Tocci Building Corporation, et al.</em>, Lawyers Weekly No. 01-236-24</a>. <h2 style="font-size: 22px; text-align: center;"><strong>Sidestepping the issue</strong></h2> <p>Tocci’s attorney, Jeffrey J. Vita of Trumbull, Connecticut, was frustrated by the court’s application of the (j)(6) exclusion to bar coverage. <p>As Vita pointed out, policy exclusions are supposed to be construed narrowly since the insurer is the one drafting the policy and the consumer doesn’t get to negotiate the provisions. <p>Yet the court applied the exclusion, which excludes property damage for “that particular part” of the property that needs to be repaired, broadly by interpreting “that particular part” of the project as meaning the entire project. <p>“It’s unfortunate because the court didn’t address the key issue that was briefed by the parties and appealed, which is whether a subcontractor’s work that damages other non-defective project work constitutes an occurrence resulting in property damage under a CGL policy,” said Vita. “Instead, they addressed an exclusion that really was not briefed, and they got it wrong.” <p>Eric F. Eisenberg of Boston, who co-authored an amicus brief on behalf of a pair of contractors’ industry groups, emphasized that despite the 1st Circuit opting not to weigh in on the main issue in the appeal, a significant majority of rulings from various jurisdictions over the past decade have ruled that there is coverage in circumstances like this. <p>“I still hold out the expectation that the SJC will rule that defective work is covered by a commercial general liability policy,” he said. <p>Admiral’s counsel, Eric B. Hermanson of Boston, declined to comment on the record. <p><img decoding="async" class=" wp-image-507095 alignright" src="https://masslawyersweekly.com/files/2024/11/Michael-Melville.png" alt="Michael Melville" width="230" height="123" srcset="https://masslawyersweekly.com/files/2024/11/Michael-Melville.png 1000w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-150x80.png 150w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-65x35.png 65w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-768x411.png 768w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-304x162.png 304w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-200x107.png 200w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-408x218.png 408w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-234x125.png 234w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-280x150.png 280w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-120x64.png 120w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-50x27.png 50w, https://masslawyersweekly.com/files/2024/11/Michael-Melville-270x144.png 270w" sizes="(max-width: 230px) 100vw, 230px" />But Boston attorney Michael S. Melville said <em>Tocci </em>suggests there are two avenues for insurers to challenge coverage in cases like this: arguing that construction defects don’t constitute property damage or arguing that the (j)(6) exclusion applies. <p>Melville represented the insurer in <em>Lessard, et al. v. R.C. Havens & Sons, Inc., et al., </em>a case this summer in which the Appeals Court ruled that construction defects do not, in and of themselves, constitute “property damage” within the meaning of a CGL policy. <p>“The same arguments the 1st Circuit addressed here have been addressed by a number of trial courts,” he said. “But now we have more appellate case law clarifying that really these CGL policies aren’t meant to cover faulty workmanship.” <p>Echoing these sentiments, Boston insurance attorney John G. O’Neil said the court reached a “common-sense” result in reinforcing that when an owner sues a contractor for construction defects and delay, the fact that some defects may have damaged other portions of the work doesn’t transform the claim into one for covered tort liability. <p>“It remains fundamentally a claim for failure to meet contractual expectations, which is a business risk to be addressed with a performance bond and not general liability insurance,” he said. <h2 style="font-size: 22px; text-align: center;"><strong>Flawed construction</strong></h2> <p>From 2013 to 2016, Tocci served as Toll’s construction manager for an apartment project in New Jersey. <p>Work quality and delay issues occurred, and in 2016 Toll terminated Tocci. <p>Toll then filed suit in New Jersey alleging, among other things, breach of contract, bad faith and fraud in the inducement. <p>In support of its allegations, Toll claimed Tocci’s subcontractors caused damage to sheetrock from faulty roof work, mold formation from inadequate sheathing and damage to wood framing, concrete and underground pipes as a result of improper backfill and soil compaction. <div class="box shadow alignright" style="width:300px"><div class="box-inner-block"><i class="tieicon-boxicon"></i> <p><a href="https://masslawyersweekly.com/2024/11/12/insurance-duty-to-defend-subcontractors-defective-work/"><strong>Admiral Insurance Company, et al. v. Tocci Building Corporation, et al.</strong></a> <p><strong>THE ISSUE:</strong> Did a commercial general liability insurer have a duty to defend a general contractor against an apartment developer’s lawsuit over subcontractors’ allegedly faulty work that damaged other parts of the project? <p><strong>DECISION:</strong> No (1st U.S. Circuit Court of Appeals) <p><strong>LAWYERS:</strong> Eric B. Hermanson and Austin D. Moody of White & Williams, Boston (plaintiff) <p>Jeffrey J. Vita of Saxe Doernberger & Vita, Trumbull, Connecticut (defense) <p> </div></div> <p>In January 2020, Tocci sought a defense and indemnity under its CGL policy with Admiral, which covered sums Tocci might be required to pay as damages for “property damage” caused by an “occurrence.” <p>The policy defined an “occurrence” as an “accident” and defined “property damage” as a “physical injury to tangible property” or “loss of use of tangible property that is not physically injured.” <p>The policy also had a (j)(6) exclusion disclaiming coverage for “property damage” to “that particular part” of any property that needs to be repaired because “your work” was not performed correctly, though under a “products-completed operations hazard” exception, the (j)(6) exclusion did not apply to work that was abandoned or not yet completed. <p>Admiral denied coverage on the grounds that Toll’s action did not allege liability for property damage caused by an occurrence. <p>The insurer then filed an action in U.S. District Court seeking a declaratory judgment that it had no obligation to defend or indemnify Tocci under Massachusetts law. <p>In March 2022, U.S. District Judge Patti B. Saris agreed. Tocci appealed. <h2 style="font-size: 22px; text-align: center;"><strong>‘Straightforward’ resolution</strong></h2> <p>The 1st Circuit described Saris’s reasoning that a subcontractor’s faulty work causing damage elsewhere on a project was not covered property damage caused by an occurrence as being “in line” with some other cases. <p>However, said Howard, “[W]e are more hesitant to predict which way the [SJC] – which has yet to rule on this precise issue – would come out. As we have recognized before, there is a sharp split of authority.” <p>Instead, he continued, “we decide to sidestep this issue by focusing on the exclusions, as we view the resolution under Massachusetts law to be more straightforward.” <p>In determining that the (j)(6) “your work” exclusion applied to the facts at hand, the court rejected Tocci’s argument that the exclusion was inapplicable because it wasn’t seeking coverage for the costs of repairing the defective work itself, such as the faulty roof, inadequate sheathing or faulty soil fill, and instead sought coverage for resultant property damage that would not fall under the exclusion. <p>As the court noted, Tocci was hired as a general contractor for the entire project and not just a portion. As a general contractor, according to Howard, Tocci did not directly perform construction work, but instead supervised and coordinated its subcontractors’ work. <p>Accordingly, said the judge, because Toll’s alleged damage resulted from Tocci’s “incorrectly performed” work on the entire project, “that particular part” of any property needing to be repaired as a result of “[Tocci’s] work” referred to the entirety of the project Tocci was charged with supervising and managing as a whole. <p>The court further rejected Tocci’s argument that the “products-completed operations hazard” exception to the (j)(6) exclusion applied. <p>“The question is whether the project was ‘completed or abandoned’ prior to the damage, such that it would fall under the ‘products-completed operations hazard’ and thus be covered,” said Howard. “Tocci, however, was terminated from the project and did not complete the work. And it makes no argument that its termination from the project should qualify as ‘abandonment’ under the policy. Therefore, Tocci has not met its burden of showing that any exception to the exclusion applies.” <p>Finally, the court noted that application of the (j)(6) exclusion didn’t mean a general contractor’s CGL policy could <em>never</em> cover damage to non-defective work arising from a subcontractor’s defective work. <p>“If the Massachusetts SJC were to interpret ‘property damage’ caused by an ‘occurrence’ to encompass this type of damage, a general contractor could still potentially receive coverage if the work is completed or abandoned, as the exception to the exclusion would then apply,” Howard said. <div id="relatedByLwnum" class="widget"> <div class="widget-top"> <h4>Lawyers Weekly No. 01-236-24</h4> <div class="stripe-line"></div> </div> <div class="widget-container"> <h5>Massachusetts Lawyers Weekly</h5> <ul> <li><a href="https://masslawyersweekly.com/?p=506798" rel="bookmark" class="homepagebulletlink" >Insurance – Duty to defend – Subcontractor’s defective work</a></li> </ul> </div> </div> </div> <div class="mobile-specific-data"> <div class="share-links"> <p class="share">Share this!</p> <ul class="social-share-links"><li><a class="twitter" href="https://twitter.com/intent/tweet?text=General contractor not entitled to defense for sub’s defective work&url=https%3A%2F%2Fmasslawyersweekly.com%2F2024%2F11%2F20%2Fgeneral-contractor-not-entitled-to-defense-for-subs-defective-work%2F" target="_blank"><img src="https://masslawyersweekly.com/wp-content/themes/hello-elementor/images/twitter.svg" alt="twitter"></a></li><li><a class="facebook" href="https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Fmasslawyersweekly.com%2F2024%2F11%2F20%2Fgeneral-contractor-not-entitled-to-defense-for-subs-defective-work%2F" target="_blank"><img src="https://masslawyersweekly.com/wp-content/themes/hello-elementor/images/facebook.svg" alt="facebook"></a></li><li><a class="linkedin" href="https://www.linkedin.com/shareArticle?mini=true&url=https%3A%2F%2Fmasslawyersweekly.com%2F2024%2F11%2F20%2Fgeneral-contractor-not-entitled-to-defense-for-subs-defective-work%2F&title=https%3A%2F%2Fmasslawyersweekly.com%2F2024%2F11%2F20%2Fgeneral-contractor-not-entitled-to-defense-for-subs-defective-work%2F" target="_blank"><img src="https://masslawyersweekly.com/wp-content/themes/hello-elementor/images/linkedin.svg" alt="linkedin"></a></li><li><a class="crunchify-link crunchify-pinterest" href="https://pinterest.com/pin/create/button/?url=https%3A%2F%2Fmasslawyersweekly.com%2F2024%2F11%2F20%2Fgeneral-contractor-not-entitled-to-defense-for-subs-defective-work%2F&media=https://masslawyersweekly.com/files/2022/03/Depositphotos_7944862_L.jpg&description=General%20contractor%20not%20entitled%20to%20defense%20for%20sub’s%20defective%20work" data-pin-custom="true" target="_blank"><img src="https://masslawyersweekly.com/wp-content/themes/hello-elementor/images/pinterest.svg" alt="pinterest"></a></li><li><a class="email" href="/cdn-cgi/l/email-protection#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" title="Share by Email"><img src="https://masslawyersweekly.com/wp-content/themes/hello-elementor/images/email.svg" alt="email"></a></li></ul> </div> <div class="right-sidebar-mobile"> </div> </div> </div> <div class="related-content-section"> <h2>Related Content</h2> <div class="related-content"> <div class="content-box"> <a href="https://masslawyersweekly.com/2024/11/22/failure-to-prosecute-leads-to-dismissal-of-suit-against-rapper-dababy/"><div class="rc-wrapper"> <div class="rc-img"> <img width="304" height="175" src="https://masslawyersweekly.com/files/2024/11/J.-Nathan-Cole-304x175.png" class="attachment-article-list-thumb size-article-list-thumb wp-post-image" alt="J. 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seek further review in a case that raises the issues of how libera[...] </p></div> </a> </div> </div> <div class="slideshowContents"> <div class="most-viewed"> <a href="https://masslawyersweekly.com/2024/11/20/general-contractor-not-entitled-to-defense-for-subs-defective-work/"> <div class="featured-image"><img width="304" height="162" src="https://masslawyersweekly.com/files/2022/03/Depositphotos_7944862_L.jpg" class="attachment-homepage-categories-thumb size-homepage-categories-thumb wp-post-image" alt="Construction site" decoding="async" srcset="https://masslawyersweekly.com/files/2022/03/Depositphotos_7944862_L.jpg 620w, https://masslawyersweekly.com/files/2022/03/Depositphotos_7944862_L-150x80.jpg 150w, https://masslawyersweekly.com/files/2022/03/Depositphotos_7944862_L-65x35.jpg 65w, https://masslawyersweekly.com/files/2022/03/Depositphotos_7944862_L-300x160.jpg 300w" sizes="(max-width: 304px) 100vw, 304px" /></div> <div class="title"><h2> General contractor not entitled to defense for sub’s defective work </h2></div> <div class="desc"><p> The 1st U.S. Circuit Court of Appeals has ruled that a commercial general liability insurer had no d[...] </p></div> </a> </div> </div> <div class="slideshowContents"> <div class="most-viewed"> <a href="https://masslawyersweekly.com/2024/11/15/after-46-years-defense-legend-says-hes-not-going-anywhere-for-now/"> <div class="featured-image"><img width="304" height="162" src="https://masslawyersweekly.com/files/2024/11/CARNEY-PAGE-1-304x162.png" class="attachment-homepage-categories-thumb size-homepage-categories-thumb wp-post-image" alt="J.W. “Jay” Carney Jr." decoding="async" srcset="https://masslawyersweekly.com/files/2024/11/CARNEY-PAGE-1-304x162.png 304w, https://masslawyersweekly.com/files/2024/11/CARNEY-PAGE-1-150x80.png 150w, https://masslawyersweekly.com/files/2024/11/CARNEY-PAGE-1-65x35.png 65w, https://masslawyersweekly.com/files/2024/11/CARNEY-PAGE-1-768x411.png 768w, 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304px" /></div> <div class="title"><h2> School district’s denial of tenure violated parental leave statute </h2></div> <div class="desc"><p> A public school district violated the Massachusetts Parental Leave Act by requiring a teacher to tea[...] </p></div> </a> </div> </div> <div class="slideshowContents"> <div class="most-viewed"> <a href="https://masslawyersweekly.com/2024/11/14/access-rulings-in-brothel-case-upheld-by-sjc/"> <div class="featured-image"><img width="304" height="162" src="https://masslawyersweekly.com/files/2023/02/John-Adams-Courthouse-in-Boston-front.jpg" class="attachment-homepage-categories-thumb size-homepage-categories-thumb wp-post-image" alt="John Adams Courthouse in Boston" decoding="async" srcset="https://masslawyersweekly.com/files/2023/02/John-Adams-Courthouse-in-Boston-front.jpg 620w, https://masslawyersweekly.com/files/2023/02/John-Adams-Courthouse-in-Boston-front-150x80.jpg 150w, 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