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Supreme Court of Connecticut
November 27, 2012, Argued; June 11, 2013, Officially Released
[*763] [**968] ROGERS, C. J. This case, on certification from the United States District Court for the Northern District of Alabama, Southern Division (District Court), pursuant to General Statutes § 51-199b,2 presents questions regarding the interpretation of commercial general liability insurance policies under Connecticut law. The plaintiffs, Capstone Building Corporation (Capstone Building) and Capstone Development Corporation (Capstone Development),3 served, respectively, as the general contractor and the project developer for construction of the Hilltop student housing complex (Hilltop) at the University of Connecticut (UConn). UConn procured a commercial general liability policy for the Hilltop project, which insured the plaintiffs and their [*764] work. The defendant, American Motorists Insurance Company [***8] (AMICO), is the issuing insurer's successor in interest.4 The District Court determined that the resolution of the parties' claims depended on propositions of law for which there was no controlling precedent in this court's decisions.
We accepted the following three questions for our consideration, and answer them accordingly: "1. Whether damage to a project contracted to be built, which was caused by defective construction or faulty [**969] workmanship associated with the construction project, [***9] may constitute 'property damage' resulting from an 'occurrence,' triggering coverage under a commercial general liability insurance policy?"
We conclude that allegations of unintended defective construction work by a subcontractor that damages nondefective property may constitute an "occurrence" resulting in "property damage" under certain circumstances. We also hold, however, that defective work standing alone or repairs to that defective work do not constitute property damage and, therefore, are not covered under the particular insurance policy in the present case. Finally, we hold that work by a contractor, as opposed to a subcontractor, is excluded from coverage under the terms of the policy.
"2. Can an insurer's bad faith conduct in investigating an insurance claim provide a basis for a cause of action for bad faith under Connecticut law?"
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
308 Conn. 760 *; 67 A.3d 961 **; 2013 Conn. LEXIS 187 ***; 2013 WL 2396276
CAPSTONE BUILDING CORPORATION v. AMERICAN MOTORISTS INSURANCE COMPANY;CAPSTONE DEVELOPMENT CORPORATION v. AMERICAN MOTORISTS INSURANCE COMPANY
Prior History: [***1] Actions to recover damages for breach of contract and bad faith in connection with the construction of a student housing complex at the University of Connecticut, brought to the United States District Court for the Northern District of Alabama, Southern Division, where the cases were consolidated and where the court, Proctor, J., certified certain questions of law to this court.
Capstone Bldg. Corp. v. Am. Motorists Ins. Co., 2011 U.S. Dist. LEXIS 172237 (N.D. Ala., May 2, 2011)
Disposition: The court responded to the certified questions.
insured, coverage, property damage, commercial general, settlement, liability policy, defective work, duty to defend, occurrence, damages, subcontractor, quotation, insuring agreement, marks, allegations, bad faith, insurance policy, terms, tangible property, physical injury, contractor, investigate, costs, contractual, repair, cause of action, present case, nondefective, fair dealing, installation
Civil Procedure, Appeals, Appellate Jurisdiction, Certified Questions, Insurance Law, Commercial General Liability Insurance, Coverage, Products & Workmanship, Policy Interpretation, Ambiguous Terms, Coverage Favored, Claim, Contract & Practice Issues, Ordinary & Usual Meanings, Question of Law, Reasonable Expectations, General Overview, Accidental Injuries, Business Insurance, Occurrences, Exclusions, Breach of Contract, Property Claims, Contractual Liabilities, Exclusions, Evidence, Burdens of Proof, Burden Shifting, Entire Contract, Business & Corporate Compliance, Contracts Law, Types of Contracts, Guaranty Contracts, Real Property Law, Construction Law, Liability & Performance Standards, Bad Faith & Extracontractual Liability, Elements of Bad Faith, Contracts Law, Contract Interpretation, Good Faith & Fair Dealing, Good Faith & Fair Dealing, Breach, Breach of Contract Actions, Elements of Contract Claims, Obligations of Parties, Insurers, Allegations in Complaints, Refusals to Defend, Duty to Defend, Indemnification, Weight & Sufficiency, Payment Delays & Denials, Antitrust & Trade Law, Consumer Protection, Deceptive & Unfair Trade Practices, State Regulation, Industry Practices, Unfair Business Practices, Claims Investigations & Practices, Unfair Trade Practices Acts, Damages, Punitive Damages, Remedies, Allocation, Settlements, Reservation of Rights, Estoppel & Waiver, Trials, Jury Trials, Province of Court & Jury, Costs & Attorney Fees, Attorney Fees & Expenses, Reasonable Fees