Procedural Posture

Plaintiff contractor sued defendant insurer for failing to defend it in a homeowners’ action for negligent construction of a private residence. The San Bernardino County Superior Court, California, granted the insurer’s motion for summary judgment. The contractor appealed.

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Overview

The contractor argued that the trial court erred in granting the insurer’s motion for summary judgment, as the insurer failed to establish that there was no potential for coverage. The instant court concluded that, based on the policy period, the relevant policy provisions, the homeowners’ complaint, and the contractor’s admissions, there was no potential for coverage under the policy and no duty to defend in the third-party action. The policy excluded damage to the property caused during ongoing construction operations performed by the contractor or subcontractor. Considered together with another section, the policy applied to completed work or operations. Completed work included not only entire projects, but also partial projects that had been put to their intended use by any person other than the contractor or subcontractor. There was no potential for coverage under the completed operations provisions of the policy. Regarding the contractor’s contention that coverage existed under the policy’s loss of use provisions, this contention was without merit, as the homeowners did not experience any loss of use within the policy period.

Outcome

The judgment was affirmed. The insurer was awarded its costs on appeal.