UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 04-1344

HOTEL ROANOKE CONFERENCE CENTER COMMISSION,

Plaintiff - Appellant,

versus

THE CINCINNATI INSURANCE COMPANY,

Defendant - Appellee.

Appeal from the United States District Court for the Western

District of Virginia, at Roanoke. Samuel G. Wilson, Chief District

Judge. (CA-03-109-SGW-GC)

Argued: December 1, 2004 Decided: January 6, 2005

Before WILKINSON, TRAXLER, and DUNCAN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Paul Graham Beers, GLENN, FELDMANN, DARBY & GOODLATTE, Roanoke,

Virginia, for Appellant. Phillip Verne Anderson, FRITH, ANDERSON

& PEAKE, Roanoke, Virginia, for Appellee. 

Unpublished opinions are not binding precedent in this circuit.

See Local Rule 36(c).
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PER CURIAM:

 This diversity case involves an insurance coverage dispute 

governed by the laws of Virginia. The Hotel Roanoke Conference

Center Commission (the Commission) appeals from the district

court’s order granting summary judgment in favor of Cincinnati

Insurance Company (Cincinnati). For the reasons that follow, we

affirm.

I.

The Commission owns the Conference Center, which is physically

attached to the Hotel Roanoke (the Hotel) in Roanoke, Virginia.

The Hotel is owned by Hotel Roanoke, LLC, a business owned and

operated separately from the Commission and Conference Center. 

In 1994, the Commission and the Hotel entered into a “Deed of

Easements,” which granted the Hotel appurtenant easements,

exclusive use rights, and nonexclusive use rights in various areas

of the Conference Center. Construction of the Conference Center

was completed in 1995, and was designed to incorporate the Hotel,

which would provide the accommodations for most of those attending

events at the Conference Center. Cincinnati provided insurance

coverage under a commercial general liability policy (CGL policy)

and an “umbrella” liability policy with the Hotel as a named

insured and the Commission as an additional insured. 
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Unfortunately, the Conference Center was built over an area

filled with steel slag which expanded over time and thereby created

serious structural problems for the Conference Center as well as

risk to the Conference Center’s guests and employees. Although the

slag fill problems caused no physical damage to the Hotel, the

Hotel lost a significant amount of revenue during the time that the

Commission carried out the repairs to the Conference Center from

January to May 2001. The Commission’s closure of the Conference

Center to remove the slag and repair the property damage caused

some of the Hotel’s previously booked guests to go elsewhere, the

Hotel’s restaurant and catering service to close for a month, and

some of the Hotel’s rooms to be taken out of rotation due to

construction noise. 

Pursuant to its rights under the Deed of Easements, the Hotel

submitted a claim to the Commission for the lost revenue and other

expenses incurred during the months the Conference Center was

closed for repairs. The Commission ultimately agreed to pay the

Hotel $678,591 in exchange for a release from liability. The

Commission then sought indemnification for the damages paid to the

Hotel from Cincinnati under the CGL and umbrella policies.

Cincinnati denied the claim and the Commission brought this suit

seeking reimbursement from Cincinnati. 

The district court granted summary judgment in favor of

Cincinnati, finding that the Commission was not entitled to
* There are other disputed issues on appeal, such as

whether the CGL policy provides coverage for contractual claims

arising out of a breach of the Deed of Easements and whether the

Commission, as an “additional insured,” may recover damages arising

from the operations of its own premises as opposed to damages

arising from the operation of the premises of a “named insured.”

Because other grounds readily dispose of the coverage question in

this case, the court need not reach these issues.

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coverage under the CGL and umbrella policies. The Commission

appeals from this order. For the reasons set forth within, we

affirm.

II.

A.

The “Insuring Agreement” constituting the CGL policy provides

that: “We will pay those sums that the insured becomes legally

obligated to pay as damages because of ‘bodily injury’ or ‘property

damage’ . . . . [that is] caused by an ‘occurrence.’” J.A. 107.

“Property damage” is defined as “[p]hysical injury to tangible

property, including all resulting loss of use of that property. .

. . [and] [l]oss of use of tangible property that is not physically

injured.” J.A. 115. Cincinnati agreed at oral argument that the

loss of use of portions of the Hotel satisfies the CGL policy’s

definition of property damage. Thus, the central issue on appeal

is whether the Hotel’s revenue losses and other expenses were

caused by an “occurrence” as defined by the CGL policy.*
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The CGL policy defines an “occurrence” as “an accident,

including continuous or repeated exposure to substantially the same

general harmful conditions.” J.A. 115. The Commission argues that

the use of the steel slag during construction was an “occurrence,”

as contemplated by the CGL policy, causing the Commission’s

liability to the Hotel. We disagree. 

There is no dispute that the Commission was unaware the slag

had been used as fill or problems with the foundation would develop

because of the slag. From the Commission’s perspective, therefore,

the use of the slag and the resulting property damage to the

Conference Center is likely an unexpected and unanticipated

occurrence or, stated another way, an accident as contemplated

under the CGL policy. The use of slag, however, caused no property

damage to the Hotel. In this respect, the slag failed to give rise

to the Commission’s liability to the Hotel. Rather, the

Commission’s liability to the Hotel arose out of the Commission’s

breach of the Deed of Easements. The Commission breached the Deed

of Easements when it undertook repairs to the Conference Center in

a manner which caused the Hotel lost revenues and other expenses.

To obtain coverage under the CGL policy for its liability to

the Hotel, the Commission must show that its breach of the Deed of

Easements qualifies as an “occurrence” or accident under the CGL

policy. The evidence in the record, however, indisputably

demonstrates otherwise. The Commission’s breach of the Deed of
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Easements was the result of a careful, studied decision to close

the Conference Center and proceed with repairs in a deliberately

chosen manner. In fact, in the process of making this decision,

the Commission’s attorney acknowledged that the closure of the

Conference Center for repairs “necessarily would diminish the Hotel

Roanoke’s revenues.” J.A. 358. 

The Commission contends that certain admissions of Cincinnati

corporate executives establish that the slag problems amount to

“occurrences” which gave rise to the Hotel’s claims against the

Commission under the CGL policy. A reading of these executives’

depositions, however, makes clear that the admissions address

claims held by the Commission against the architects, engineers,

and contractors regarding the faulty design and construction of the

Conference Center. These statements in no way suggest that the

Hotel’s claim against the Commission arising out of the

Commission’s breach of the Deed of Easements constitutes an

“occurrence” within the meaning of the CGL policy. 

Because the Commission thoroughly considered its actions with

respect to repairing the Conference Center and recognized that such

repairs would cost the Hotel revenue losses, the Commission’s

breach of the Deed of Easements cannot be considered an accident or

an occurrence covered by the CGL policy. See Utica Mut. Ins. Co.

v. Travelers Indem. Co., 286 S.E.2d 225, 226 (Va. 1982) (“An

intentional act [by the insured] is neither an ‘occurrence’ nor an
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‘accident’ and therefore is not covered by the standard policy.”).

This result, moreover, comports with the CGL policy’s exclusion of

coverage for “‘property damage’ expected or intended from the

standpoint of the insured.” J.A. 107 (emphasis added). The

Commission unquestionably understood that the closure of the

Conference Center and repair work would cause the Hotel lost

revenue.

B.

Cincinnati also issued an “umbrella” liability policy covering

certain claims excluded under the CGL policy. The Commission

contends that if the CGL policy fails to cover the Hotel’s claim

against it, then the umbrella policy provides coverage for the

claim. Similar to the CGL policy, the umbrella policy covers

claims for property damage caused by an occurrence. The umbrella

policy defines “occurrence” as “an accident, or a happening or

event, or a continuous or repeated exposure to conditions which

occurs during the policy period which unexpectedly or

unintentionally results in . . . property damage.” J.A. 329. For

the same reasons the Commission’s breach of contract was no

accident, the Commission cannot demonstrate that its breach of

contract, which was “a happening or event,” was “unexpected[] or

uninten[ded].” Because the claim against the Commission fails to

involve an occurrence as defined by the umbrella policy, there is

no coverage for the Commission’s claim under the umbrella policy.
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III.

The Commission bears no legal liability for the use of the

slag. To this end, the Commission asserted and settled its claims

against the architects, engineers, and other parties who were

involved in the defective design and construction of the Conference

Center. Likewise, the Commission cannot claim that the use of the

slag gave rise to its liability to the Hotel. The Hotel’s claim

against the Commission--the claim for which the Commission seeks

indemnification under the CGL and umbrella policies--arose as a

result of the Commission’s decision to proceed with the Conference

Center’s repairs in a manner that caused the Hotel to suffer

financially. That action by the Commission is not an occurrence as

defined under the CGL and umbrella policies. The district court,

therefore, properly granted summary judgment in favor of

Cincinnati.

AFFIRMED