Filed: October 16, 1997

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 95-2568

Lords Landing Village Condominium Council of

Unit Owners,

Plaintiff - Appellant,

versus

The Continental Insurance Company,

Defendant - Appellee.

ORDER

The Court amends its opinion filed September 17, 1997, as

follows:

On page 3, second full paragraph, line 7 -- the phrase "continuous of repeated exposure" is corrected to read "continuous or

repeated exposure."

For the Court - By Direction

/s/ Patricia S. Connor

Clerk
UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

LORDS LANDING VILLAGE

CONDOMINIUM COUNCIL OF UNIT

OWNERS,

Plaintiff-Appellant,

No. 95-2568

v.

THE CONTINENTAL INSURANCE

COMPANY,

Defendant-Appellee.

On Remand from the United States Supreme Court.

(S. Ct. No. 96-1033)

Decided on Remand: September 17, 1997

Before WIDENER and NIEMEYER, Circuit Judges, and

PHILLIPS, Senior Circuit Judge.

_________________________________________________________________

Vacated and remanded by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

Kevin Thornton, KAPLAN & KAPLAN, P.A., Baltimore, Maryland,

for Appellant. Jeffrey R. Schmieler, Gregory Ryder Black,

SAUNDERS & SCHMIELER, Silver Spring, Maryland, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).
OPINION

PER CURIAM:

The Council of Unit Owners at the Lords Landing Village Condominium complex ("Unit Owners") successfully sued Wellington

Homes, the developer, and obtained a $1.1 million judgment for

numerous defects in the condominium complex. Specifically, the Unit

Owners complained that a defective fire protection system, faulty

insulation, and rotted wood which resulted from a painting subcontractor's poor workmanship amounted to breaches of express and

implied warranties. The Unit Owners also complained that Wellington Homes was guilty of misrepresentation in selling the condominium units.

Unable to collect the $1.1 million judgment from Wellington

Homes, the Unit Owners brought the present action against Continental Insurance Company, which had issued a general liability insurance

policy to Wellington Homes for the relevant period. The policy provided coverage for property damage if caused by an "occurrence,"

which was defined by the policy as "an accident, including continuous

or repeated exposure to substantially the same general harmful conditions." Continental Insurance disputed coverage and defended the

action by arguing, in part, that the damage to the condominium complex was the natural result of poor workmanship and thus not an "occurrence" as defined in the policy.

The district court agreed with Continental Insurance and held, as

a matter of law, that property damage that is the natural, probable

consequence of poor workmanship is not caused by an "accident," and

thus not by an "occurrence," regardless of whether the work was performed by the contractor or a subcontractor.

On the basis of IA Construction Corp. v. T&T Surveying, Inc., 922

F. Supp. 1213 (D. Md. 1993); Reliance Ins. Co. v. Mogavero, 640 F.

Supp. 84 (D. Md. 1986); and Ed. Winkler & Son, Inc. v. Ohio Casualty Ins. Co., 441 A.2d 1129 (Md. App. 1980), we affirmed, holding

that "`accident' means an `undesigned, sudden and unexpected event,

usually of an afflictive or unfortunate character, and often accompanied by a manifestation of force, but it does not mean the natural and

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ordinary consequences of a negligent act.'" Lords Landing Village

Condominium Council v. Continental Ins. Co., No. 95-2568, 1996

WL 439073 at *1 (4th Cir. Aug. 6, 1996), quoting IA Construction,

922 F. Supp. at 1215, quoting Ed. Winkler & Son, 441 A.2d at 1132.

We also refused to view the "accident" component of "occurrence"

subjectively, holding that to do so would be inconsistent with the language of the policy and was not required by Maryland insurance law.

See id. at *1-2.

The Supreme Court granted the plaintiff's petition for writ of certiorari, vacated our decision, and remanded the case to us for reconsideration in light of the recent Maryland Court of Appeals decision

in Sheets v. Brethren Mutual Ins. Co., 679 A.2d 540 (Md. 1996). See

Lords Landing Village Condominium Council v. Continental Ins. Co.,

117 S. Ct. 1731 (1997).

In Sheets, in the context of determining whether an insurer's duty

to defend the insured included a duty to defend against claims of negligent misrepresentation, the Maryland Court of Appeals examined

the meaning of the term "occurrence" in a general liability policy

employing language virtually identical to that involved in the present

case. In that policy too, an occurrence was defined as "an accident,

including continuous or repeated exposure to substantially the same

general harmful conditions," although the policy did not further

define the term "accident." Sheets, 679 A.2d at 545. After discussing

the major lines of jurisprudence as developed in cases both in Maryland and elsewhere, the Maryland court clarified its precedents to

hold that "when a negligent act causes damage that is unforeseen or

unexpected by the insured, the act is an `accident' under a general liability policy." Id. at 548 (emphasis added). This newly articulated

standard requires a factual determination of the subjective expectations of the insured with regard to the damages incurred, for the Court

of Appeals noted, "If we were to adopt an objective standard and hold

that the term `accident' as used in liability insurance policies excludes

coverage for damage that should have been foreseen or expected by

the insured, such insurance policies would be rendered all but meaningless." Id. at 549. The court expressly repudiated the foreseeability

analysis of Ed. Winkler & Son, on which we had earlier relied. See

Sheets, 679 A.2d at 549-50.

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Because the district court and the parties themselves did not have

the benefit of the Sheets decision at the time that the motion for summary judgment was originally presented to the district court, there has

thus far been no determination of the factual question of the insured's

subjective foresight with regard to the plaintiff's damages. Whether

this may be appropriately determined on summary judgment is best

considered by the district court. The court may also wish to reconsider

the parties' arguments with regard to the applicability of exclusions

from coverage also found in the policy -- arguments that it found

unnecessary to resolve in its original decision.

Accordingly, we vacate the district court's order and remand this

case to the district court for further consideration in light of the Sheets

decision to determine the applicability of that case and to consider

any other factual or legal arguments that may become relevant.

VACATED AND REMANDED

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