UNPUBLISHED

UNITED STATES COURT OF APPEALS 

FOR THE FOURTH CIRCUIT 

No. 07-1525

TRAVELERS INDEMNITY COMPANY OF AMERICA; THE TRAVELERS 

INDEMNITY COMPANY, 

 Plaintiffs - Appellees, 

COLONY INSURANCE COMPANY; DONEGAL GROUP, INCORPORATED, 

 Defendants – Appellees, 

 and 

FOUNDATIONS UNLIMITED, INCORPORATED; NICHOLAS JOHN ALAN 

WHITE, 

 Defendants, 

 v. 

TOWER-DAWSON, LLC, 

 Defendant – Appellant. 

Appeal from the United States District Court for the District of 

Maryland, at Baltimore. William D. Quarles, Jr., District 

Judge. (1:05-cv-02644-WDQ) 

Argued: September 24, 2008 Decided: October 31, 2008 

Before WILKINSON, Circuit Judge, HAMILTON, Senior Circuit Judge, 

and James C. CACHERIS, Senior United States District Judge for 

the Eastern District of Virginia, sitting by designation. 

Affirmed by unpublished per curiam opinion. 
ARGUED: Michael Evan Jaffe, THELEN, REID, BROWN, RAYSMAN & 

STEINER, L.L.P., Washington, D.C., for Appellant. Lee Hedgecock 

Ogburn, KRAMON & GRAHAM, Baltimore, Maryland, for Appellees. ON 

BRIEF: Todd J. Wagnon, THELEN, REID, BROWN, RAYSMAN & STEINER, 

L.L.P., Washington, D.C., for Appellant. Stuart M. G. Seraina, 

KRAMON & GRAHAM, Baltimore, Maryland, for Appellees Travelers 

Indemnity Company of America and The Travelers Indemnity 

Company; Laura Campbell Walters, DRECHSLER, LARKIN & WALTERS, 

P.C., Baltimore, Maryland, for Appellee Colony Insurance 

Company; Michael B. Mann, MANN & CASEY, P.A., Towson, Maryland, 

for Appellee Donegal Group, Incorporated.

Unpublished opinions are not binding precedent in this circuit. 

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PER CURIAM: 

 Tower-Dawson, LLC (Tower), the developer of The Villages at 

Tower Oaks (Tower Oaks), a residential development in Rockville, 

Maryland, appeals the district court’s grant of summary judgment 

on its claim that Travelers Indemnity Company of America, 

Travelers Indemnity Company, Colony Insurance Company, and 

Donegal Group (collectively the Insureds) had an obligation to 

indemnify Foundations Unlimited, Inc. (Foundations) for the 

costs incurred by Tower in installing a new retaining wall in 

front of the defective one Foundations installed in Tower Oaks 

and for the costs to repair federally-protected wetlands located 

adjacent to Tower Oaks which were damaged by Tower during its 

installation of the new retaining wall. For the reasons that 

follow, we affirm. 

I 

 The Insureds issued commercial general liability (CGL) 

policies (the Policies) to Foundations, covering a time period 

beginning on August 28, 1995 and ending on August 28, 2003. The 

Policies provided coverage for damages that Foundations owed 

because of “property damage” caused by an “occurrence.” 

Property damage is defined as either a “[p]hysical injury to 

tangible property, including all resulting loss of use of that 

property” or “[l]oss of use of tangible property that is not 
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physically injured.” Occurrence is defined as “an accident, 

including continuous or repeated exposure to substantially the 

same general harmful conditions.” 

 The Policies’ grant of coverage for property damage caused 

by an occurrence is limited by a “your work” exclusion. 

Specifically, the your work exclusion provides that coverage to 

the named insured, in this case Foundations, does not apply to 

“‘property damage’ [due] to ‘your work’ arising out of it or any 

part of it.” 

 In August 1995, Tower contracted with Foundations to 

construct a 770-foot retaining wall at Tower Oaks. Construction 

began shortly thereafter, and Foundations completed the 

retaining wall some time in 1996. 

 In 2001, the retaining wall began to show signs of failure, 

and eventually a seventy-foot section of the retaining wall 

collapsed in 2003, causing damage to several homeowners’ 

property and federally-protected wetlands adjacent to the 

development. 

 In order to prevent further damage to the homeowners’ 

property and the federally-protected wetlands adjacent to the 

development, Tower stabilized the area around the retaining wall 

by installing wood and gravel bracing. Once the slope was 

stabilized, Tower constructed a new retaining wall immediately 

in front of the defective one. With the two retaining walls in 
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place, the land both above and below the walls was stabilized. 

To construct the new retaining wall, Tower decided to access the 

site through the federally-protected wetlands, but this caused 

further damage to those wetlands. Following the construction of 

the new retaining wall, Tower repaired the homeowners’ property 

and remediated the federally-protected wetlands. For the costs 

it incurred, Tower instituted arbitration proceedings against 

Foundations, which resulted in an award to Tower in the sum of 

$2,015,603, an amount which has not been paid. 

 Travelers Indemnity Company of America and Travelers 

Indemnity Company (collectively Travelers) instituted this 

declaratory judgment action, seeking a declaration that it had 

no duty under the CGL policies it issued to Foundations to 

indemnify Tower for any portion of the arbitration award Tower 

obtained against Foundations. Travelers joined as defendants 

Colony Insurance Company and Donegal Group, each of whom filed 

counterclaims seeking a declaration that their policies did not 

require them to indemnify Tower in connection with the 

arbitration award. 

 On cross-motions for summary judgment, the district court 

held that the Insureds were obligated to indemnify Tower for 

some of its costs, but not others. More specifically, the 

district court held that the damage to the homeowners’ property 

and the federally-protected wetlands caused by the collapse of 
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the original retaining wall was a covered loss under the 

Policies. The district court also held that the cost of the 

emergency bracing was a covered loss as well, concluding that 

the cost was incurred to prevent imminent or further damage to 

third party property. The district court held that the cost of 

installing the new retaining wall was not a covered loss under 

the Policies because it was not caused by an occurrence or, 

alternatively, the loss was barred by the “your work” exclusion. 

Finally, the district court held that the cost of repairing the 

further damage to the federally-protected wetlands brought about 

by the installation of the new retaining wall was not a covered 

loss because the loss was not accidental. 

 Tower appeals the portion of the district court’s decision 

adverse to its interests. The Insureds have not challenged any 

portion of the district court’s decision. 

II 

 We review de novo the district court’s grant of summary 

judgment. Ellis v. Metro. Life Ins. Co., 126 F.3d 228, 232 (4th 

Cir. 1997). We will affirm the district court’s decision “if 

the pleadings, the discovery and disclosure materials on file, 

and any affidavits show that there is no genuine issue as to any 

material fact and that the movant is entitled to judgment as a 

matter of law.” Fed. R. Civ. P. 56(c). We view the record and 
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all reasonable inferences drawn therefrom in the light most 

favorable to the nonmoving party, here Tower. Williams v. Giant 

Food Inc., 370 F.3d 423, 428 (4th Cir. 2004). 

 On appeal, Tower argues that the district court erred when 

it determined that the cost of installing the new retaining wall 

and the cost of repairing the damage to the federally-protected 

wetlands brought about by the installation of the new retaining 

wall were not covered losses under the Policies. In resolving 

this argument, we apply Maryland’s substantive law regarding the 

interpretation of an insurance policy, which the parties agree 

applies to this case. French v. Assurance Co. of Am., 448 F.3d 

693, 700 (4th Cir. 2006). Under Maryland law, 

[a]n insurance policy is interpreted in the same 

manner as any other contract. Maryland courts do not 

follow the rule that an insurance policy must be 

strictly construed against the insurer. The principal 

rule in the interpretation of contracts is to effect 

the intentions of the parties. When a contract’s 

wording is clear, the court will presume that the 

parties intended what they expressed, even if the 

expression differs from the parties’ intentions at the 

time they created the contract. If reasonably 

possible, effect must be given to every clause and 

phrase of a contract, so as not to omit an important 

part of the agreement. 

Nationwide Ins. Co. v. Rhodes, 732 A.2d 388, 390-91 (Md. Ct. 

Spec. App. 1999) (citations and internal quotation marks 

omitted). 

 The Policies provided coverage for damages that Foundations 

owed because of “property damage” caused by an “occurrence.” 
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The Policies define an “occurrence” as “an accident, including 

continuous or repeated exposure to substantially the same 

general harmful conditions.” 

 Under Maryland law, in order for there to be an occurrence 

under a CGL policy, there must be an accident. Lerner Corp. v. 

Assurance Co. of Am., 707 A.2d 906, 911 (Md. Ct. Spec. App. 

1998). Typically, a CGL policy does not define there term 

accident. French, 448 F.3d at 698. However, under Maryland 

law, “an act of negligence constitutes an ‘accident’ under a 

liability insurance policy when the resulting damage takes place 

without the insured’s actual foresight or expectation.” Id.

 Our decision in French is instructive on the question of 

what constitutes an accident under Maryland law. There, a 

contractor built a single family home for the appellants. 

Pursuant to the parties’ contract, the exterior of the home was 

clad with a synthetic stucco system known as the Exterior 

Insulating Finishing System (EIFS). Id. at 696. Nearly five 

years after the home was completed, the appellants discovered 

extensive moisture and water damage to the walls of their home, 

resulting from the defective cladding of the home with the EIFS. 

Id. The appellants spent over $500,000 to correct the defects 

in the EIFS exterior of the home and to remedy the resulting 

damage to the otherwise nondefective structure and walls of the 

home. Id. The appellants brought an action against the 
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contractor, and the question before this court was whether the 

contractor’s insurer was required to cover the claim under the 

contractor’s CGL policy. Id.

 Applying Maryland law, we concluded that the insurer was 

required to cover any unexpected property damage that occurred 

to something other than the defective object as a result of the 

defective object, but the insurer was not required to cover any 

damage to the defective object itself: 

[I]f the defect causes unrelated and unexpected 

property damage to something other than the defective 

object itself, the resulting damages . . . may be 

covered. For example, if a collapse of [a] veneer had 

injured a user of the facility or damaged property 

other than the veneer itself, these may well be 

covered. 

Id. at 702 (alterations and internal quotation marks omitted). 

 Thus, when there is no property damage “to otherwise 

nondefective parts of [a] building,” there is no “accident” or 

“occurrence.” Id. at 703. Thus, coverage exists only “to 

remedy unexpected and unintended property damage to the 

contractor’s otherwise nondefective work-product caused by the 

. . . defective workmanship.” Id. at 706. And if a product 

does not meet the contract requirements of a sale, it should not 

be unforeseen that “the purchaser will be entitled to correction 

of the defect.” Id. at 702. 

 The Maryland Court of Appeals’ decision in Woodfin Equities 

Corp. v. Harford Mutual Insurance Co., 678 A.2d 116 (Md. Ct. 
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Spec. App. 1996), overruled in part on procedural grounds, 687 

A.2d 652 (Md. 1997), also is instructive on the question of what 

constitutes an accident under Maryland law.∗

 In that case, a 

hotel hired the insured to install a Heating, Ventilation, and 

Air Conditioning (HVAC) system. Id. at 118-19. The HVAC system 

was defective, and carpeting and drywall had to be destroyed to 

remedy the defect. Id. at 121, 131. The insured sought 

coverage for the costs of the carpeting and drywall. The 

Maryland Court of Special Appeals found that the insurer was not 

required to cover the property damage because pulling up 

carpeting and breaking through drywall to access the HVAC system 

was not property damage, but rather the “cost incurred in 

replacing and repairing the HVAC systems.” Id. at 132 n.8. The 

Woodfin court further explained: “Voluntarily pulling up 

carpeting or breaking through dry-wall to access the HVAC units 

is not property damage. . . . Even if it could be considered 

‘property damage,’ we would hold that it was not caused by an 

‘occurrence,’ because the so-called damage was not accidental.” 

Id.

 Under these authorities, it is evident that the cost of 

installing the new retaining wall and the cost of repairing the 

 ∗

 Even though Woodfin was overruled on procedural grounds, 

Maryland courts continue to find “Woodfin instructive on the 

interpretation of CGL policies generally.” Lerner Corp., 707 

A.2d at 910. 
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damage to the federally-protected wetlands brought about by the 

installation of the new retaining wall are not covered losses 

under the Policies. With regard to the installation of the new 

retaining wall, Foundations’ contractual obligation to Tower was 

to furnish a retaining wall, one capable of protecting the land 

both above and below the retaining wall. The original retaining 

wall did not fulfill this purpose and needed to be either 

repaired or replaced. The correction of the defective retaining 

wall, either by replacing the original retaining wall or 

installing a new one, simply was not unforeseen, just like it 

was not unforeseen in French that the EIFS exterior would have 

to be replaced as it was not capable of keeping moisture and 

water out of the appellants’ home. 

 With regard to the cost of repairing the damage to the 

federally-protected wetlands brought about by the installation 

of the new retaining wall, these costs are not covered losses as 

well. This damage was not caused by an accident; rather, it was 

caused by the intentional act of Tower. Just like the carpeting 

and drywall that had to be removed or destroyed in Woodfin to 

remedy the defect in the HVAC units, the further damage to the 

federally-protected wetlands was necessary to correct the defect 

(inability to protect the land both above and below the 

retaining wall) in the original retaining wall. 
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 In an attempt to make an end-run around these wellestablished authorities, Tower states that the outcome of this 

case is controlled by Aetna Ins. Co. v. Aaron, 685 A.2d 858 (Md. 

Ct. Spec. App. 1996). In that case, the Maryland Court of 

Special Appeals addressed whether remediation expenses incurred 

in connection with the insured homeowner’s own property were 

covered losses under a homeowner’s insurance policy covering 

property damages, even though the policy contained an “owned 

property” exclusion, which provided that coverage did not apply 

if the property damage was to “property owned by the insured.” 

Id. at 860. The Aaron court held that the owned property 

exclusion did not preclude coverage for the costs of 

preventative measures undertaken on the insured’s property to 

prevent imminent damage to third-party property. Id. at 866-70. 

Aaron is of no help to Tower. Aaron did not involve a CGL 

policy that provided for coverage for damages that were caused 

by an “occurrence.” The inclusion of the occurrence provision 

brings into play the well-settled Maryland law construing what 

constitutes an accident in the construction context. If we were 

to accept Tower’s invitation to apply Aaron outside of the 

homeowner’s context and in the construction context, we would 

turn the Maryland law on what constitutes an occurrence on its 

head, as redoing the insured contractor’s work routinely has the 

effect of preventing further or imminent damage to third-party 
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property. We also note that the Court of Appeals of Maryland 

has rejected a claim for coverage under a similar CGL policy to 

the one in our case for measures taken to avoid imminent 

property damage in the construction context. See W.M. Schlosser 

Co., Inc. v. Ins. Co. of North America, 600 A.2d 836, 840 (Md. 

1992) (“We conclude that under Maryland law, the liability 

policy at issue here [which defines occurrence as an accident] 

did not provide coverage for the preventive costs incurred by 

Schlosser.”). 

III 

 For the reasons stated herein, the judgment of the district 

court is affirmed. 

AFFIRMED