Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_03-cv-01495/USCOURTS-azd-2_03-cv-01495-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

General Acrylics, Inc., an Arizona

corporation,

Plaintiff, 

vs.

Maryland Casualty Company, a Maryland

corporation, et al.,

Defendants. 

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CIV-03-1495-PHX-RGS

ORDER

Pending before the Court is Defendants' Motion for Reconsideration of the Court's

Order granting Plaintiff's Cross-Motion for Partial Summary Judgment and denying

Defendants' Motion for Summary Judgment (Doc. #49). After considering the arguments

raised by Defendants in their briefing, the Court now issues the following ruling.

On April 6, 2006, the Court entered an Order granting Plaintiff's cross-motion for

partial summary judgment and denying Defendants' motion for summary judgment.

Specifically, the Court found that, contrary to the holding of United States Fidelity &

Guaranty Company v. Advance Roofing and Supply Company, 788 P.2d 1227 (Ariz. Ct.

App. 1989) (finding that mere faulty workmanship, based upon the insured's failure to

comply with the requirements of the contract, standing alone does not constitute property

damage caused by an occurrence where the insured's work was not performed in a

workmanlike manner), the instant matter involved tennis courts, basketball courts, and/or

multi-purpose courts that were indisputably damaged due to Alkali/Silica Reaction ("ASR"),

Case 2:03-cv-01495-RGS Document 50 Filed 06/09/06 Page 1 of 4
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an unexpected and unintended reaction of the aggregates in concrete, which was designed,

mixed, and manufactured by a third-party subcontractor constituting "property damage" as

defined under the plain terms of the policy. 

The Court further found that the blistering and delamination occurring on the courts

as a result of the ASR condition constituted an "occurrence" – defined under the subject

policy as "an accident, including continuous or repeated exposure to substantially the same

general harmful conditions." Although not defined under the policy, the Court determined

that the term "accident," when it is a source and cause of property damage within the terms

of a liability policy, is an "unexpected, unforeseen, or undesigned happening or consequence

from either a known or unknown cause." The Court concluded that an "occurrence" included

faulty workmanship performed by a subcontractor since the damage to the courts was the

result of the unexpected, unintended, and continuous exposure to the ASR condition in the

concrete.

Having concluded that there was "property damage" caused by an "occurrence," the

Court addressed whether Exclusion l applied to preclude coverage of Plaintiff's claim.

Exclusion l of the policy precluded coverage for: "'Property damage' to 'your work' arising

out of it or any part of it and included in the 'products-completed operations hazard.'"

Exclusion l contained an exception stating: "This exclusion does not apply if the damaged

work or the work out of which the damage arises was performed on your behalf by a

subcontractor." Accordingly, central to the Court's determination was whether the third-party

supplier of the concrete for the projects at issue, United Metro Materials and San Xavier

Rock & Materials ("United Metro"), constituted a "subcontractor" pursuant to the policy.

Initially, the Court noted that the term "subcontractor" was not defined in the policy.

However, the Court concluded that unlike a pure material supplier, the product involved here

was custom-manufactured with an intended mixture of ingredients. Accordingly, the Court

found that this fact removed such an entity from being classified as a mere materialman to

one of a subcontractor. Therefore, since "the damaged work or the work out of which the

Case 2:03-cv-01495-RGS Document 50 Filed 06/09/06 Page 2 of 4
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damage arises was performed" by a subcontractor, the Court determined that the exception

to Exclusion l applied in this case.

Thus, the Court, having found that there was "property damage" caused by an

"occurrence" pursuant to the policy, and that none of policy's exclusionary provisions

applied, denied Defendants' Motion for Summary Judgment and granted Plaintiff's CrossMotion for Partial Summary Judgment. On April 20, 2006, Defendants filed a Motion for

Reconsideration.

Motions for reconsideration should be granted only where: (1) the District Court is

presented with newly discovered evidence; (2) the District Court committed clear error in its

decision; (3) the District Court’s decision was manifestly unjust, or (4) there is an intervening

change in controlling law. See School District No. 1J v. ACandS, Inc., 5 F.3d 1255 (9th Cir.

1993). Procedurally, motions to reconsider are generally treated as motions to alter or amend

the judgment or a motion for relief from a judgment or order. See Fed. R. Civ. P. 59(e), 60.

Thus, relief may also be available on any of the grounds listed in Rule 60 of the Federal

Rules of Civil Procedure. A motion for reconsideration should not be used to ask the Court

"to rethink what the court has already thought through." Defenders of Wildlife v. Ballard,

73 F.Supp.2d 1094, 1115 (D. Ariz. 1999).

In their Motion, Defendants challenge the grounds on which the Court granted

summary judgment to Plaintiff. Specifically, Defendants submit that United Metro does not

constitute a "subcontractor" pursuant to the policy. Defendants contend that the concrete was

not custom-manufactured with an intended mixture of ingredients, but rather, was a standard,

preformulated mixture of concrete. Defendants also state that United Metro simply furnished

the supplies or materials to Plaintiff and did not manufacture the concrete on Plaintiff's

behalf. 

Defendants additionally disagree with the Court's finding that the tennis courts,

basketball courts, and/or multi-purpose courts were damaged due to an unexpected and

unintended reaction of the aggregates in concrete, which was designed, mixed, and

manufactured by a third-party subcontractor constituting "property damage" caused by an

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"occurrence" as defined under the plain terms of the policy. Defendants contend that the

damage to the courts did not constitute property damage caused by an occurrence.

The Court finds that throughout Defendants' Motion for Reconsideration, Defendants

simply ask the Court to revisit the same issues raised in relation to their motion for summary

judgment, and to reexamine case law, which was previously cited and considered by the

Court in deciding this matter. Defendants fail to present newly discovered evidence or show

that there has been an intervening change in the controlling law. Therefore, the Court will

deny Defendants' Motion.

Accordingly,

IT IS HEREBY ORDERED that Defendants' Motion for Reconsideration (Doc. #49)

is DENIED.

DATED this 8th day of June, 2006.

Case 2:03-cv-01495-RGS Document 50 Filed 06/09/06 Page 4 of 4