FI L ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T MARCH 15, 2012 J OHN L EY CL ERK [PUBLIS H] IN THE U

NITED STATE S COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 0- 10 96 0

__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock etNo. 3 :0 8- cv -0 06 45 -TJC -TEM AMERIS URE MUTUAL INSURANCE COMPANY, a fo rei gn co rp or at io n, AMERIS URE INSURANCE COMP ANY, a fo rei gn co rp or at io n, Pl ai nt iff s - Ap pe ll ees , ve rs us AUCHTER COMPANY, a Fl or id a co rp or at io n, Defen da nt , AMELIA ISLAND COMPANY, a Fl or id a co rp or at io n, Defen da nt- App el la nt .

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt forth e Mi dd le Dis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ (Ma rch 15 , 20 12 )Befo re TJ OFLAT, CARNES andHILL, Circu itJu dg es .

TJOFLAT, Cir cu itJu dg e: Thi s i ns ur an ce co ve rag e d is pu te requi res us to de te rm in e, un de r Fl or id a la w, wha t co ns ti tu te s “ pr op erty da m ag e” u nd er a p os t-1 98 6 s ta nd ardform co m m erci al ge ne ral li ab il it y

(“ CGL”) p ol ic y

with p ro du ct s- co m

pl et edop erat io ns ha zard (“ PCOH”) c ov erag e. Sp eci fic al ly, we m us t d eci de whet he r su ch a po li cy is su edto a g en eral co nt ract orpro vi de s co ve rag e whe n acla im is m ad e ag ai ns t the co nt ract or

forda m ag e to th e p artof t he co m pl et edpro ject p erfo rm edby a subc on tra ct or , bu t n otto an y ot he r pr ojec t co m

po ne nt , cau se d b y

a subc on tra ct or ’s de fect iv e work. The di stric t co urt, ru li ng on cro ss -m ot io ns forsu m m ary jud gm en t, h el d t ha t th e d am ag e atis su e was no t co ve redun de r th e p ol ic y , gra nt edth e in su rer’s m ot io n, an d e nt ereda de cl arat ory jud gm en t fo r th e in su rer. The i ns ur er’s 1 adve rs ary no w app eal s. In li gh t o f Fl or id a p rece de ntad dr es si ng th e sc op e o f si m il ar CGL p ol ic ie s, we co nc lu de th atth e p ol ic y pro vi de s n o c ov erag e in th is cas e. W e th eref

or e aff irm th e d is tri ctco urt. 2 The district cour

t exercised its diversity

jurisdiction over the c ontroversy pursuant to 28 1 U.S.C. § 1332. We reviewthe district court’s grant of summar y judgme nt de novo. Am. B anker s Ins. 2 Grp. v. United States, 408 F .3d 1328, 1331 (11th Cir. 2005). We have jurisdiction over the appea l of the district court’ s final judg ment under 28 U .S.C. § 1291. As all parties have 2I. A. 1. On Ap ril 17 , 19 97 , th e Am el iaIsl an d C om pa ny (“ Am el ia ”) en te redin to a co nt ractwith t he Auch te r Co m pa ny (“ Auc ht er”) , a ge ne ral co nt ract or , forth e co ns tru ct io n o f anin n andco nf eren ce ce nt er (t he “ In n” ) onAm el ia ’s pro pe rty in Nas sau C ou nt y , Flo rid a. Auch te r en te redin to a subc on tra ctag reem en t wi th 3 Reg is te r Co nt ract in g C om pa ny (“ Reg is te r”) t o i ns ta ll th e In n’s ro of . Am el iadi d no t re qu ire Auch te r to ob ta in a pe rfo rm an ce b on d t o c ov er Au ch te r’s co nt ractua l ob li ga ti on s. The Inn wou ldbe co ns tru ct edwith aba rrel ti le roo f. Thi s ro of was m ad e fro m co nc ret e, S-s hape d t il es in st al le d i n a n i nt erl oc ki ng fas hi on an d i n ov erl ap pi ng rows . The t il es were t o b e in st al le d b y scr ewin g t he m

to th e ro of

in g subs tra te , whi ch pro vi de s t he roo f’s wate r res is ta nc e. Each ti le co nt ai ns two scr ew ho le s an d t he in st al le r m

us t fa st enon e sc rew thr ou gh each ho le to pre ve nt pi vo ti ng . Mor eo ve r, each scr ew m us t b e fas te ne d a t a p reci se ti gh tn es s: if t he

acknow ledg ed, F lorida law g overns this dispute. Alongwith the inn and conf ere nce c enter , the $26,572,363.49 standard form 3 construction contr act that Ame lia and Auc hter e x ecute d provided for the construc tion of various additional buildings on Amelia’ s proper ty . These othe r buildings a re not re levant to this case. 3sc rew i s t oo ti gh t, the ti le wil l cr ack ; t oo lo os e an d t he ti le canbe un fas te ne d o r

crac ke d b y

th e upwa rdfor ce o f th e win d. Th e sp eci fic requi rem en ts of i ns ta ll at io n were t o b e acc or di ng to th e Fl or id a Bu il di ng Co de , whi ch di ct at ed , inpa rt, t ha t the ro of ha d t o b e res is tantto 11 0 m .p.h . win ds . Auch te r hi redReg is te r to in st al l the en ti re ro of

—i nc lu di ng th e ro of

in g s ub st rat e syst em

an d t he roo fin g t il es —atth e In n. The co nt ractga ve Am el iath e o pt io n t o p ay Auch te r fo r so m e o f th e bu il di ng m at eri al s u se d o n, b utno t yet in co rp or at edin to , th e p ro ject. Th es e m at eri al s i nc lu de d t he co nc ret e ro of ti le s, wh ic h wer e d el iv eredto an d s to redat th e co ns tru ct io n s it e b efo re Re gi st er b eg anin st al li ng th em . On Oct ob er 6 , 19 97 , Auc ht er s ub m it te d apa ym en t ap pl ic at io n t o Am el iareque st in g p aym en t fo r th e In n’s ro of ti le s s to redon si te . Am el iapa idAuch te r fo r th e ro of ti le s o n Oct ob er 31 , 19 97 , at wh ic h p oi ntAm el iato okown ers hi p o f th e ti le s und er the co nt ract . 4 Dur in g S ep te m

be r an d Oct ob er 1 99 7, Re gi st er i ns ta ll edth e ro of’s subs tra te in pr ep arat io n fo r in st al li ng th e ro of ti le s. Re gi st er the n b eg anin st al li ng th e ro of ti le s i n No ve m

be r 19 97 , com

pl et in g wo rk

on th e In n’s ro of

in Jan ua ry

19 98 . Amelia disputes a state ment in the district court’s orde r that “[t] he contr act pr ovided 4 that Auchter

would . . . store and insureall materia ls and labor f or the c ompleted projec t.” Orde r at 11, Amerisure Mut. Ins. Co. v. Auchter Co., No. 3:08-c v-645-J-32HTS (M.D. Fla . Fe b. 4, 2010). This purporte d discrepa ncy , howeve r, is immaterial to the pre sent dispute. The undisputed rec ord shows that the tiles at issue in this case w ere delivere d to Amelia’s prope rty , wer e paid f

or by Amelia, and w ere then installed by Reg ister. 4Beg in ni ng in Aug us t 2 00 2, t he co nc ret e ti le s o n t he Inn ’s roo f be ga n

di sl od gi ng fro m

th e ro of . Am el iaco nt act edAuch te r to m ak e rep ai rs . On two oc cas io ns —Au gu st18 , 20 02 , andApri l 4 , 20 03 —ro of ers co nduc te d t em

po rary rep ai rs onth e aff

ect edarea s. Durin g t he 20 04 hu rri can e se as on , ho wev er, Hurric an es Fran ces , Iva n, an d J ean ne sk irt edth e Am el iaIsl an d a rea, caus in g e ve n m or e ti le s t o c om e o ff the roo f. Some of th es e ti le s h itot he r ti le s o n t he roo f, crac ki ng th em . Alth ou gh th e ex actnu m be r of ti le s l os t dur in g thi s t im e is un kn own , Am el ia ’s cou ns el ha s s ug ge st edth e num be r ex ceed s 2 5 p erce nt . Am el iath enco ntract edforad di ti on al tem po rary repai rs to rem edy

th e ti le lo ss es . Bet ween20 02 an d 2 00 8, Am el iapa id$7 8,0 07 .56 to va rio us co ntract or s t o re ct ify th e ro of’s fai lu re. Inres po ns e to th es e ex pe ns es , Am el iaco nt act edAuch te r, arg ui ng th atAuch te r was li ab le forth e rep ai rs . Auch te r an d Am el iawere u nabl e, ho wev er, t o a gr ee re gard in g t he cau se of t he roo f’s fai lure. In20 06 , pu rs ua ntto th e arb it rat io n c laus e in Am el ia ’s con tra ctwith Auc ht er, Am el iafil eda de m an d fo r arb it rat io n. Am el iacla im edth atAuch te r was

5

The re levant ar

bitration clause, G eneral Condition 4.5.1, provides: 5 Any controve rsy

or Claim arisingout of or re lated to the Contrac t, or the bre ach there of, shall be se ttled by arbitration in accor dance with the Construction Industry Arbitration Rules of the America n Arbitration Association, and judgme nt upon the awa

rd re ndere d by

the ar bitrator or a

rbitrators may

be ente red in a

ny court having jurisdiction thereof[.] 5li ab le to Am el iaforov er $ 2 m il li on in da m ag es forde fect iv el y in st al li ng th e ro of

. Am el iaall eg edth atAuch te r br each edit s co nt ractua l an d l eg al ob li ga ti on s t o Am el iato pe rfo rm

it s wo rk in a go odan d wo rkm an li ke m an ne r. Altho ug h Am el ia as se rte d tha t the fai le d ro of was a es th et ic al ly defi ci en t an d d an ge ro us to pe rs on s an d p ro pe rty, Am el iadi d n otall eg e th atfal li ng roo f ti le s d am ag edan y ot he r pr op erty or p artof t he pro

ject. No r di d Am el iaall eg e th atth e lo ss of t il es ha d cau se d t he roo f to fai l i n s uc h away as t o a ll ow t he ele m en ts to da m ag e o th er co m po ne nt s o f th e p ro

ject. Am el iadi d a ll eg e, ho wev er, tha t i t wo ul d s uf fer l os t pr of it s b ecau se th e In n wo ul d b e u nu sabl e dur in g t he co ur se of r oo f rep ai rs . Am eri su re Mu tu al Ins ur an ce Co m pa ny andAm eri su re In su ran ce Co m pa ny (“ Am eri su re”) ha d i ss ue d s uc ces si ve CGL andum br el lali ab il it y

(“ UL”) po li ci es to Auch te r fo r co ve rag e b etweenMay 200 2 a ndJan uary 20 06 . Am eri su re

6 de fen de d Au ch te r in th e arb it rat io n p ro ceed in gs un de r a res erv at io n o f ri gh ts . On Ju ne 25 , 20 08 , Am eri su re fi le d ade cl arat ory jud gm en t ac ti on in th e Uni te d S ta te s Dis tri ctCo urt fo r th e Mi dd le Dis tri ctof F lo rid a se ek in g ade cl arat io n t ha t Am el ia ’s cla im

ag ai ns t Au ch te r was no t co ve redby the in su ran ce p ol ic ie s Am eri su re i ss ue d t o Au ch te r. Spe ci fic al ly, Am eri su re ar gu edth atAm el ia ’s cla im
The provisions of these policies rele vant to the pre sent dispute are provided in par t 6 I .A.2, infra . 6ag ai ns t Au ch te r was no t fo r “pr op erty da m ag e” as requi redto tri gg er co ve rag e un de r th e p ol ic ie s. If t he di st ric t co urt g ran te d Am eri su re’s reque st edrel ie f, Am eri su re wo ul d h av e n o dut y to in de m ni fy or d efen d Au ch te r in it s d is pu te with Am el ia . Whi le th e d ecl arat ory

jud gm en t ac ti on was p en di ng , th e arb itrat io n b etween Am el iaan d Au ch te r to okpl ace. Th e arb it rat or co nduc te d atwo -d ay he ari ng at 7 whi chco un se l fo r Am el iaan d Au ch te r m ad e ap pe aran ces . The arbi tra to r fo un d 8 Auc ht er l iabl e to Am el iafor$2 ,16 7,3 13 .67 in da m ag es for th e d efec ti ve in st al la ti onof t he roo f, whi ch co ns ti tu te d abre ach of Au ch te r’s co nt ractwith Am el ia . Spe ci fic al ly, th e arb it rat orfou ndth at th e requi rem en t o f co m

pl ia nc e wit h the 11 0 m il e anho urwin d ve lo ci ty w as a co nd it io n o f th e co nt ractan d tha t the fai lu re i ts el f co m bi ne d wi thot he r ev id en ce s uc h a s m is si ng scr ews an d ex ces si ve ly loo se ti le s co ns ti tu te [pr oo f] by a pr ep on de ran ce o f [the ] ev id en ce tha t the roo f was no t i ns ta ll edin acco rd an ce wi th co nt ract requi rem en ts . App el le es ’ Br. ap p. 3 , at 4 (ci ti ng Cmty. Tele vi si on Serv s., In c. v. Dre ss er In du s., In c., 58 6 F .2d63 7 (8 th Cir . 19 78 )).

The a rbitration clause in the construction contr act pr ovided for a rbitration bef

ore a 7 panel of three arbitrators. Amelia and A uchter , howeve r, stipulated that the ar bitration would be hear d instead by

a sing le ar

bitrator. Amerisure was not a pa

rty to the arbitration. Amerisure se nt a re prese ntative to the 8 arbitration procee dings but the r epre sentative did not participate in the ar bitration. 7The am ou ntof d am ag es was s up po rte d, i n p art , by ev id en ce tha t the en ti re

ro of ha d t o b e rep la ced . For o ne , th e ro of de si gn di d n otpe rm itin sp ect io n a nd rep la cem en t o f de fect iv el y in st al le d t il es onanin di vi du al ba si s. In di vi du al rep la cem en t was im

po ss ib le be cau se “ in ord er t o d et erm in e whe th er al l t il es ha ve be enpro pe rly nai le d o r sc reweddo wn, i t wo ul d b e requi redto rem ov e th e ti le s i n th e n ex t t ie r, in ess en ce re qu iri ng rem ov al of t he en ti re ro of .” Id . at 5 . Mor eo ve r, ti le s i de nt ic al to th os e u se d o n t he Inn ’s roo f were u na va il ab le . Am el iath ende m an de d p aym en t o f th e award . Auch te r, ho wev er, m ad e n o pa ym en t. On Au gu st7, 2 00 9, Am el iaco nv ert edth e arb it rat or ’s awardto a fi na l

9 jud gm en t ag ai ns t Au ch te r in st at e co urt. Thi s ju dg m en t i nc lu de s the ful l am ou nt award edby the arb itrat orpl us in te res t an d fe es . Thu s, Am el iaha s a s ta te co urt jud gm en t i n h an d t ha t i t i s p rep aredto ex ecu te , bu t h as no t yet ex ecu te d a ga in st an y pa rty. 2. W e return b rie fly to the in su ran ce p ol ic ie s atis su e in Am eri su re’s de cl arat ory

jud gm en t ac ti on . Am eri su re i ns ur edAuch te r be twee n M ay 1, 2 00 2, an d J anua ry

1, 2 00 6, t hr ou gh a se rie s o f CGL an d UL p ol ic ie s. In all , Am eri su re

The re cord be fore us indicates that at some point bef ore the arbitration finished, 9 Auchter cea sed doingbusiness. 8is su edth ree C GL po li ci es an d t hr ee UL po li ci es with c ov erag e eff ect iv e dur in g th is pe rio d. Fo r th e p res en t ca se , ho wev er, o nl y two po li ci es are re le vant : the CGL an d UL p ol ic ie s i n e ffec t i n Au gu st20 02 —t he ap pr ox im at e ti m e th e In n’s ro of be ga n t o fa il . Neve rth el es s, al l the CGLs ar e st an da rdform Ins ur an ce 1 0 Serv ic es Offic e (“ ISO”) p ol ic ie s. The o pe rat iv e p ol ic y lan gu ag e is th us id en ti cal 1 1 fo r eac h o f Am eri su re’s CGLs is su edforco ve rag e b etween20 02 an d 2 00 6. The CGL po li cy

pro vi de s, i n re le va ntpa rt, “ [Am eri su re] will pa y th os e su m s t ha t the in su redbe co m es leg al ly obl ig at edto pa y as d am ag es be cau se of . . . ‘pro pe rty dam ag e’ to wh ic h t hi s i ns ur an ce ap pl ie s. . . . Thi s i ns ur an ce ap pl ie s t o . . . ‘ pr op erty

da m ag e’ on ly if . . . the ‘pr op erty da m ag e’ is caus edby an ‘occu rren ce[.]’ ” The CGL def in es “pr op erty

da m ag e” as “ [p ]hy si cal in jury to ta ng ib le pro pe rty, inc lu di ng all res ul ti ng lo ss of u se of t ha t p ro pe rty. . . . or. . . [l]os s o f us e o f ta ng ib le pro pe rty tha t i s n otph y si cal ly inju red .” An

“ oc cu rren ce” i s “ anacci de nt , in cl ud in g c on ti nu ou s o r rep eat edexpo su re t o subs ta nt ia ll y

th e sa m e g en eral ha rm fu l co nd it io ns .” Those policies a

re CGL policy CPP 1156636090002, eff ective Ma y 1, 2002, to May

1, 1 0 2003, and UL

policy CUF-1319343, e ffe ctive May 1, 2002, to May

1, 2003. As the F lorida Supreme Court ha s expl ained, the I SO is “an industry org anization that 1 1 promulg ates va

rious standard insura

nce policie s that are utiliz ed by insurers throughout the country , including the standard CGL policy at issue in this case.” U.S. Fire Ins. Co. v. J .S.U.B., Inc., 979 So. 2d 871, 879 n.6 (F la. 2007) (c iting Ha rtford F ire Ins. Co. v. California, 509 U.S. 764, 772, 113 S. Ct . 2891, 2896, 125 L . Ed. 2d 612 (1993)) . 9Afte r th is ge ne ral gra ntof c ov erag e, th e GCL ex cl ud es cert ai n l os se s:

j. “ Pro pe rty dam ag e” t o:

. . . . (5 ) Thatpa rti cu la r pa rt o f real pro pe rty onwhi ch y ouor an y co ntract or s o r subc on tra ct or s wo rk in g d ire ct ly or in di rect ly on your be ha lf a re p erfo rm in g o pe rat io ns , if th e “pr op erty

da m ag e” ar is es ou t o f th os e o pe rat io ns ; o r (6 ) Tha t p art ic ul ar p artof a ny pro pe rty tha t m us t b e res to red , rep ai redor r ep la cedbe cau se “ y ou r work” was in co rrec tl y

pe rfo rm edon it .

. . . . Para gr ap h (6 ) of

th is ex cl us io n d oe s n otap pl y to “pr op erty

da m ag e” in cl ud edin th e “pr oduc ts -co m pl et edop erat io ns ha zard .”

. . . . l . “ Pro pe rty dam ag e” t o “ y ou r work” ari si ng ou t o f itor any partof i t an d i nc lu de d i n t he “pr oduc ts -co m pl et edop erat io ns ha zard .” Thi s ex cl us io n d oe s n otap pl y if t he da m ag edworkor t he workou t o f whi ch th e d am ag e ari se s was pe rfo rm edon y ou r be ha lf b y a subc on tra ct or . Exc lu si on ( l) is kn own as t he “ y ou r work” ex cl us io n. Se e, e.g ., U.S. Fire In s. Co . v. J .S.U.B., Inc ., 97 9 S o. 2 d 8 71 , 87 9 (F la . 20 07 ). The ex cep ti on to th e “ y ou r work” ex cl us io n i s kno wn as th e subc on tra ct orex cep ti on . See i d.

10The Am eri su re CGL p ol ic y is su edto Auch te r al so in cl ud edPCOH co ve rag e. PCOH is de fin edun de r th e p ol ic y as f ol lo ws: [PCOH] [i]ncl ud es all . . . “pr op erty da m ag e” o ccu rri ng away fro m pr em is es y ouown or r en t an d a ris in g o utof “ y ou r pr oduc t” or “ y ou r work” ex cep t: (1 ) Pro du ct s t ha t ar e st il l i n you r ph y si cal po ss es si on ; o r (2 ) W ork t ha t h as no t yet be enco m pl et edor aba nd on ed . Howev er, “ y ou r work” wil l b e d eem edco m pl et edat t he earl ie stof the fol lo win g t im es : (a) When all of t he workcal le d fo r in y ou r co nt ractha s b een co m

pl et ed . (b ) Whe n a ll of t he workto be do ne at t he job si te ha s b een co m

pl et edif yourco nt ract cal ls forworkat m or e th anon e job si te . (c) When th atpa rt o f th e work d on e ata job si te ha s b een pu t t o i ts in te nd edus e b y an y pe rs on or o rg an iz at io n o th er tha n a no th er co nt ract oror s ub co nt ract orwork in g o n t he sa m e p ro ject. W ork tha t m ay

ne edservi ce, m ai nt en an ce, co rrec ti on , rep ai r orrep la cem en t, b utwhi ch is ot he rwis e co m pl et e, wil l b e tr eat edas c om

pl et ed . The UL pro vi de s co ve rag e u nd er the fol lo win g p ro vi si on : “ [Am eri su re] will pa y on be ha lf o f th e in su redth os e su m s t ha t the in su redbe co m es leg al ly obl ig at ed to pa y as d am ag es whi ch ex ceedth e li m itof ‘un de rlyin g l iabi li ty ins ur an ce’ . . .
11be cau se of . . . ‘ pr op erty da m ag e’ . . . caus edby an ‘occu rren ce’ to whi ch th is in su ran ce ap pl ie s.” Th e CGL is th e “ un de rlyin g l iabi li ty ins ur an ce” f orth e UL. The UL cov ers th e sa m e “pr op erty da m ag e” as th e CGL. Cov erag e u nd er the UL, th eref or e, de pe nd s o n t he ex is te nc e o f co ve rag e u nd er the CGL. In eff ect , witho ut

“pr op erty da m ag e” as co ve redby the CGL, th ere i s n o c ov erag e u nd er the UL. 3. The in su ran ce co ve rag e d is cu ss edin th e p rev io us subs ect io n l ay s t he fo un da ti on forth e arg um en ts in th e d ecl arat ory jud gm en t ac ti on . Am eri su re m ov edforsu m

m ary jud gm en t, s eek in g ade cl arat io n o f no co ve rag e fo r th e arb it rat or ’s award

—en fo rceabl e th ro ug h the st at e co urt ju dg m en t—un de r Am eri su re’s p ol ic ie s, o n the gro un d t ha t n on e o f th e arb it rat io n d am ag es award ed to Am el iaco ns ti tu te “pr op erty dam ag e.” Am el iafil eda cro ss -m ot io n fo r su m m ary jud gm en t s eek in g ade cl arat io n o f co ve rag e u nd er Am eri su re’s p ol ic ie s. 1 2 Alt ho ug h n am edas ade fen dant , Auch te r, whi ch th e rec or d i nd ic at es ha s ce as ed do in g b us in es s, h ire d n o c ou ns el an d t oo k n o p artinth e su it . Bo th Am eri su re an d Am el iaco nc ed edth atth e cru x o f th e d is pu te was whe th er the roo f ha d s uf

fere d “ pr op erty

da m ag e.” Insupp ort o f it s p os it io n, Although Amelia filed a Chapter 11 ba

nkruptcy petition while the cross-motions for 1 2 summary judgme nt were still pending , Amelia wa ived the automatic- stay benef its of 11 U.S.C. § 362(a) for pur

poses of litigating this dispute. 12Am eri su re ar gu edth atAm el ia ’s cla im was e ss en ti al ly one to reco ve r th e ro of it ha d p ai d fo r bu t n otrece iv ed ; an y da m ag e was li m it edto th e ro of it se lf. In res po ns e, Am el iaarg ue d t ha t the pl ai n m ean in g o f “pr op erty da m ag e” u nd er the CGL im po se s n o re qu ire m en t tha t “ ot he r” p ro pe rty be d am ag edto tri gg er co ve rag e. Evenif s uc h arequi rem en t ex is te d, Am el iaarg ue d, the crac ke d a ndlo st ro of in g t il es th em se lv es wou ldco ns ti tu te da m ag edpro pe rty andwou ldbe co ve red be cau se no CGL exc lu si on ap pl ie d. Am el iapro po se d d is ti ng ui sh in g b etween co ns tru ct io n d efec ts li ke th e o ne in th is cas e—wh ere ade fect iv e in st al la ti on cau se d s om e p hysic al de gr ad at io n o f th e p ro ject c om po ne ntan d t hu s co ns ti tu te d

“pr op erty da m ag e”— an d o th er b reac he s o f co nt ractth atha d n otph y si cal ly m an ife st edth em se lv es in a de tri m en ta l way. The p art ie s d idno t d is pu te th atth e subc on tra ct or ’s in st al la ti on of t he roo fin g t il es was d efec ti ve or tha t the de fect iv e in st al la ti onco ns ti tu te d a n “ oc curren ce” u nd er the CGL. It was als o u nd is pu te d th atth e ti le s t he m se lv es were n on de fect iv e. On Fe brua ry

4, 2 01 0, t he di st ric t co urt en te redit s o rd er g ran ti ng Am eri su re’s m ot io n fo r su m m ary jud gm en t, ru li ng th atth e d am ag e to th e ro of was no t “pr op erty

da m ag e,” an d tha t Am eri su re thu s h adno co nt in ui ng du ty to d efen d orto in de m

ni fy Auch te r reg ard in g t he arb it rat or ’s award . The d is tri ctco urt d en ie d

13Am el ia ’s m ot io n a nddi rect edth e cl erkof t he di st ric t co urt t o e nt er a d ecl arat ory

jud gm en t fo r Am eri su re, wh ic h was en te redon Feb ru ary 5, 2 01 0. B. Alo ng with i ts ord er, the di st ric t co urt i ss ue d a n o pi ni on ev al ua ti ng Flo rid a Supr em e Co urt juris prud en ce o n wh atqu al ifi es as “ pr op erty da m ag e” u nd er a CGL. Relyin g o n t wo ca se s we d is cu ss at l en gt h i n p artII, in fra, the di st ric t co urt ru le d t ha t, u nd er Fl or id a la w, clai m s s ol el y for th e rep ai r an d re pl acement o f de fect iv e work a re n otcla im s fo r “pr op erty da m ag e.” A cla im

for“pr op erty da m ag e” re qu ire s p hysic al in jury to s om e ta ng ib le pro pe rty oth er tha n t he co nt ract or ’s ownde fect iv e work. App lying th es e p rin ci pl es , th e d is tri ctco urt fo un d t ha t Am el ia ’s cla im in th e un de rlyin g a rb it rat io n d idno t al le ge pro pe rty dam ag e. The a m ou nt s Am el ia so ug htwere s ol el y

forth e rep ai r an d re pl acement o f th e en ti re ro of . Am el iane ve r al le ge d t ha t the de fect iv e in st al la ti on cau se d d am ag e to an y ot he r co m

po ne ntof th e p ro ject b utth e ro of

. The d is tri ctco urt re

jecte d a s i rrel ev an t Am el ia ’s arg um en t tha t the roo fin g d am ag e was “pr op erty da m ag e” b ecau se Am el iaown ed th e ti le s atth e ti m e o f in st al la ti on . Am el ia ’s cla im was n ot , th e co urt o bs erv ed , for in di vi du al bro ke n t il es , bu t ra th er t o re m edy th e fai lu re o f th e ro of

in g s y st em . II. 14W e tu rnto Flo rid a la w to res ol ve th is di sp ut e. See, e.g ., Erni e Hai re Fo rd ,

In c. v. Fo rdMo to r Co ., 26 0 F .3d12 85 , 12 90 (11 th Cir . 20 01 ) (“ Inren de rin g a de ci si on ba se d o n s ta te subs ta nt iv e la w, a fed eral co urt m us t d eci de th e cas e th e way itap pe ars th e st at e’s hi gh es t co urt wo ul d.” (ci ta ti onan d i nt ern al qu ot at io n m ark s o m it te d) ). The Fl or id a Supr em e Co urt, i n t wo s em in al cas es , has op in edat le ng th reg ard in g t he sco pe of c ov erag e p ro vi de d b y CGL po li ci es is su edto ge ne ral co nt ract or s i n c on st ru ct io n- de fectcas es . Bot h Am eri su re an d Am el iaarg ue th at th es e two cas es —Un it edSta te s Fi re In su ran ce Co . v. J .S.U.B., Inc ., 97 9 S o. 2 d 87 1 (F la . 20 07 ), an d Au to -Owne rs Ins ur an ce Co . v. Po zzi W in do w Co., 9 84 So . 2d12 41 (Fl a. 20 08 )—c on tro l the ou tc om e o f th e p res en t l it ig at io n. We agre e wit h Am eri su re tha t J .S.U.B. andPo zzi est ab li sh th ata cl ai m li ke th atin th e p res en t cas e is no t a c la im

for“pr op erty

da m ag e” co ve redby CGL po li ci es . Becau se th e pr es en t ca se in vo lv es no “pr op erty da m ag e,” we n eedno t ex am in e th e sc op e o f th e ex cl us io ns to Auch te r’s CGL po li ci es . A. InJ.S.U.B., a g en eral co nt ract oren ga ge d i n h om e co ns tru ct io n p ur ch as eda CGL po li cy

with P COH co ve rag e th atwas, fo r ou r pu rp os es , id en ti cal to th e po li cy Am eri su re i ss ue d t o Am el ia . 97 9 S o. 2 d a t 8 75 –7 6. Aft er co m pl et io n a nd de li ve ry of t he co nt ract or ’s work

—t he co m

pl et edho m es —d am ag e to th e 15fo un da ti on s, drywall , andot he r pa rts of t he ho m es ap pe ared . Id. at87 5. Th is

da m ag e was un di sp ut ed ly caus edby a sub co nt ract or ’s im pr op er s oi l u se , co m pa ct io n, an d t es ti ng . Id. Purs ua ntto th e CGL po li cy , th e in su rer p ai d fo r da m ag e to th e h om eo wne r’s pe rs on al pro pe rty tha t re su lt edfro m th e subc on tra ct or ’s fau lt y

work , bu t d en ie d i ns ur an ce co ve rag e fo r th e co st s o f rep ai rin g the st ru ctur al da m ag e to th e h om es . Id. at87 6. J .S.U.B., th e g en eral co nt ract or , fil eda de cl arat ory act io n t o d et erm in e whe th er the CGL po li cy co ve red pr op erty da m ag e to th e work i t co nt ract edto pe rfo rm cau se d b y

th e d efec ti ve work of it s s ub co nt ract or s. Id . The ci rcu itco urt en te redjud gm en t i n fa vo r of th e in su rer, b utth e Sec on d Di st ric t Co urt o f App eal rev ers ed . J.S.U.B., In c. v. U.S. Fi re In s. Co ., 90 6 S o. 2 d 3 03 (Fl a. 2dDis t. Ct . App . 20 05 ). 1. The Flo rid a Supr em e Co urt ex erci se d i ts juri sd ic ti on to ad dr es s “ whe th er a 1 3 po st -1 98 6 s ta nd ardform

co m m erci al ge ne ral li ab il it y

(CGL) p ol ic y

with p ro du ct s-

The F lorida Constitut ion authorizes the supreme c ourt to “re view any decision of a 1 3 district court of a

ppeal . . . that e x pressly

and dire ctly

conflicts with a de cision of another district court of a ppeal . . . on the sa

me question of law.”Fla. Const. ar t. V, § 3(b)( 3). The Sec ond District Court of Appea l’s decision in J .S.U.B., Inc. v. United States F ire Ins. Co., 906 So. 2d 303 (Fla. 2d Dist. Ct. App. 2005), conflicte d direc tly with the Four

th District Court of Appea l’s holding in L assiter Construction Co. v. America n States Insuranc e Co., 699 So. 2d 768 (Fla. 4th Dist. Ct. App. 1997), which f ound that a post-1986 CGL policy did not cover damag e to the g ener al contra ctor’s w ork ca used by a subcontra ctor’s de fec tive construction. 16co m

pl et edop erat io ns ha zardco ve rag e, is su edto a ge ne ral co nt ract or , pro vi de s co ve rag e whe n acla im

is m ad e ag ai ns t the co nt ract orforda m ag e to th e co m pl et ed pr ojec t caus edby a sub co nt ract or ’s def ect iv e work.” J.S.U.B., 9 79 So . 2dat 87 4– 75 . The s up rem e co urt u lt im at el y “ an swe r[ed ] th is qu es ti on in th e affi rm at iv e.” Id . at 8 75 . The J.S.U.B. co urt b eg anit s an al y si s, h owe ve r, by st at in g t he rul es of c on st ru ct io n fo r in te rp ret in g i ns ur an ce co nt ract s, wh ic h a ls o gu id e o uran al y si s t od ay . Und er Fl or id a la w, in su ran ce co nt ract s ar e “ co ns tru ed acco rd in g t o t he ir p la in m ean in g, wi th an y am bi gu it ie s co ns tru edag ai ns t the in su rer a ndin fav or

of c ov erag e.” Id . at 8 77 (ci ti ng Taurus Hol di ng s, In c. v. U.S. Fi d. & Guar . Co., 9 13 So . 2d52 8, 5 32 (Fl a. 20 05 )). Fu rth er, a co urt co ns tru in g a n in su ran ce p ol ic y

sh ou ldin te rp retth e p ol ic y as awho le , “ en de av or in g t o g iv e ev ery pr ov is io n i ts ful l m ean in g a ndop erat iv e eff ect .” Id . (qu ot in g Au to -Owne rs Ins . Co . v An de rs on , 75 6 S o. 2 d 2 9, 3 4 (F la . 20 00 )). Acco rd in gl y , th e “pe rti ne nt pr ov is io ns ” o f th e in su ran ce co nt ractsh ou ldbe readin pa ri m at eri a. Id . (qu ot in g St at e Farm

Fir e & Ca s. Co . v. CTC Dev . Cor p., 7 20 So . 2d10 72 , 10 75 (Fl a. 19 98 )). Exc lu si on ary cl au se s, h owe ve r, “ can no t b e rel ie d upo n t o c reat e co ve rag e” thr ou gh pri nc ip le s o f co nt ractin te rp ret at io n wh ere o th erwi se th ere i s no ne . Id. (quo ti ng CTC Dev ., 72 0 S o. 2 d a t 1 07 4) .

17The supr em e co urt the n d is cu ss edth e o rig in an d e vo lu ti onof t he st an da rd

fo rm CGL po li cy . Sig ni fic an tl y , th e co urt ad dr es se d t he ISO’s 19 86 ad di ti on of ex cl us io n ( l), th e “ y ou r work” ex cl us io n, as well as t he subc on tra ct orex cep ti on to th e “ y ou r work” ex cl us io n. Ex pl ai ni ng th es e ad di ti on s t o t he st an da rdform po li cy , th e co urt s ta te d: [T]he in su ran ce an d p ol ic yho ld er co m m un it ie s ag reedth atth e CGL po li cy sh ou ldpro vi de co ve rag e fo r de fect iv e co ns tru ct io n c la im s s o lo ng as t he all eg ed ly defec ti ve workha d b een pe rfo rm edby a subc on tra ct orrathe r th anth e p ol ic y ho ld er i ts el f. Thi s re su lt edbo th be cau se of t he de m an ds of t he po li cyho ld er co m m un it y (whi ch wan te d t hi s s ort o f co ve rag e) an d t he vi ew of in su rers th atth e CGL was a m or e at tra ct iv e p ro du ctth atco ul d b e b et te r so ldif i t co nt ai ne d th is co ve rag e. Id . at 8 79 (al te rat io n i n o rig in al ) (quo ti ng 2 J effr ey W . Ste m pe l, St em pe l o n In su ran ce Co nt ract s § 14 .13 [D], at14 -2 24 .8 (3 d e d. Supp . 20 07 )). Fu rth er, the co urt quo te d acir cu la r pr om ul ga te d b y

th e ISO tha t “ co nf

irm[s] th atth e 1 98 6 rev is io ns to th e st an da rdCGL po li cy . . . sp eci fic al ly ‘ co ve r[ed ] da m ag e cau se d b y fau lt y work m an sh ip to ot he r pa rts of wo rkin pro gr es s; an d d am ag e to , or c au se d by, a sub co nt ract or ’s workaft er the in su red ’s op erat io ns are co m pl et ed .’ ” Id . (quo ti ng Ins ur an ce Se rv ic es Offic e Ci rcu la r, Co m m erci al Gene ral Liab il it y Pro gr am Ins tru ct io ns Pam

ph le t, No . GL-86 -2 04 (Ju ly 15, 1 98 6) ).

18Bec au se th e p ol ic y in J.S.U.B. was a po st -1 98 6 C GL po li cy , th e co urt h adto fir stde te rm in e whe th er p re-1 98 6 F lo rid a Supr em e Co urt co ns tru ct io n- de fect juri sp ru de nc e was co nt ro ll in g p rece de nt . The l ead in g c as e in th atres pe ctwas LaMar ch e v . She lb y

Mu tu al Ins ur an ce Co ., 39 0 S o. 2 d 3 25 (Fl a. 19 80 ). LaMar ch e was “ ge ne ral ly cite d t o s up po rt t he pro po si ti on th atCGL po li ci es do no t p ro vi de co ve rag e fo r da m ag e to th e co nt ract or ’s workcau se d b y fau lt y work m an sh ip .” J.S.U.B., 9 79 So . 2dat 8 80 . The J .S.U.B. cou rt, h owe ve r, reject edLaMar ch e as bi nd in g p rece de ntbe cau se th e LaMa rch e co urt b as edit s h ol di ng onpre -1 98 6 ex cl us io na ry

lan gu ag e. Id . at 8 81 (ci ti ng LaMar ch e, 39 0 S o. 2 d a t 3 26 ). 1 4 Mo reo ve r, LaMar ch e was factua ll y di st in gu is habl e fro m

J.S.U.B.: “ LaMar ch e
The re levant pre -1986 exclusionary languag e wa s standard la nguag e in post-1973 CGL 1 4 policies. Covera g e did not apply (a) to liabilit y

assumed by

the insured unde r any

contra ct or a gree ment except as an incidenta l contrac t; but thi s exclusion does not apply to a war rant[y ] of fitness or quality of the na med insured’ s products or a war ranty that work pe rfor

med by or on beha lf of the na

med insured will be done in a workma nlike manner ; (n) to prope rty

damag e to the name d insured’s pr oducts arisingout of such products or a

ny part of suc h products; [or] ( o ) to proper

ty damag e to work pe rfor

med by or on beha lf of the named insured arisingout of the work or any portion thereof

, or out of materials, parts or equipment furnishe d in connec tion therewith[.] J .S.U.B., 979 So. 2d at 880 (quotingL aMar che, 390 So. 2d at 326) (first and third a lterations in orig inal). The J.S.U.B. cour t noted additionally

that L aMar che a dopted the holdingof Weedo v. Stone-E-B rick, Inc., 405 A.2d 788 ( N.J . 1979), which w as base d on the same policy languag e as that in L aMar che. J.S.U.B., 979 So. 2d at 881 (citingL aMar che, 390 So. 2d at 326–27) . 19in vo lv eda cl ai m of f au lt y work m an sh ip by the co nt ract or , rathe r th ana cl ai m of fau lt y work m an sh ip by the subc on tra ct or .” J.S.U.B., 9 79 So . 2dat 8 82 . The Fl or id a Supr em e Co urt thu s d et erm in edth atLaMar ch e d idno t co nt ro l o n t he is su e of “ whe th er a s ub co ntract or ’s fau lt y work m an sh ip is co ve redin a po st -1 98 6 C GL po li cy .” Id . at 8 83 . 2. Bec au se LaMar ch e was no t d is po si ti ve , th e Fl or id a Supr em e Co urt h adto an al y ze wh ethe r th e cl ai m ag ai ns t J .S.U.B. was co ve redby the CGL. The co urt be ga n b y ad dr es si ng th e “ th res ho ldis su e” o f “ whe th er a s ub co nt ract or ’s def ect iv e work c anco ns ti tu te an‘ oc cu rren ce.’” Id. at88 0. Well -s et tl edFlo rid a in su ran ce 1 5 juri sp ru de nc e h el d t ha t wh ena CGL po li cy de fin es an“ oc cu rren ce” a s an

“ acci de nt ,” th e p ol ic y

“pr ov id e[s ] co ve rag e n oton ly for acc id en ta l ev en ts , bu t al so in juri es or d am ag e n ei th er ex pe ct edno r in te nd edfro m th e st an dp oi ntof t he

We need not bela

bor this discussion; the par ties to this case do not dispute that there 1 5 was a n “occ urre nce” within the cover ag e period, and instead foc us their ar guments on the exis tence of “property

damag e.” We do the sa

me. It is worth noting, howe ver, that the Florida Supreme Court dec lined to “make the definition of ‘oc curr ence ’ depe nd[] on which prope rty was damag ed,” J.S.U.B., 979 So. 2d at 883, and re

jected dr awinga distinction betwee n tort and contra ct claims, whe re f aulty construction ca

using a tort would constitute an “oc curr ence ,” but such c onstruction causinga brea ch of c ontrac t would not, id. at 884 (“I f [the insurer] intended to prec lude cove rag e base d on the ca use of a ction asser

ted, it was incumbent on [the insurer] to include clea r languag e to acc omplish this result.” (c itation omit ted)). I n decliningto endorse a

line of dema

rcation betwee n tort and contra ct claims, the c ourt noted that there exis ts a brea ch-of -contra ct endorse ment that was not pre sent in the CGLpolicy at issue in the ca se. I d. at 884. 20in su red .” Id . at 8 83 (qu ot in g C TC Dev ., 72 0 S o. 2 d a t 1 07 6 (i nt ern al qu ot at io n

m ark s o m it te d) ). The b ul k o f th e in su rer’s ar gu m en t i n J .S.U.B. was t hu s t ha t de fect iv e workm an sh ip in bre ach of c on tra ctco ul d n ev er g iv e ri se to co ve red cl ai m s b ecau se da m ag e co ul d b e ex pe ct edfro m th e b reac h. Id . at 8 83 –8 5. The supr em e co urt, h owe ve r, reject edth e in su rer’s ar gu m en t. The co urt sp eci fic al ly repu di at edth e p ro po si ti on th ata br each of c on tra ctco ul d n ev er g iv e ris e to a co ve red“ oc cu rren ce” wi th in th e m ean in g o f th e CGL’s co ve rag e-g ran ti ng pr ov is io n. Id . at 8 85 (ci ti ng Trav el ers Ind em . Co. o f Am . v. Mo or e & As so cs ., In c., 21 6 S .W .3d30 2, 3 07 (Ten n. 2 00 7) ; Am . Fam il y Mu t. In s. Co . v. Am . Girl , In c., 67 3 N.W.2d 6 5, 7 6 (Wis . 20 04 )). Su ch a de fin it io n o f “ oc cu rren ce” wo ul d, i n la rg e p art , ren de r th e “ y ou r work” ex cl us io n m ean in gl es s, fo r “ if t he in su rin g pr ov is io ns do no t co nf

er an in it ia l g ran t o f co ve rag e fo r fau lt y work m an sh ip , th ere wou ldbe no reas on for[th e in su rer] to ex cl ud e d am ag e to ‘ y ou r work.’” Id. a t 88 6. No r wou ldth ere b e a n eedforth e subc on tra ct or ex cep ti on to th e “ y ou r work” ex cl us io n. Id . at 8 87 . Exte nd in g C TC Dev el op m en t, the co urt h el d i ns te ad th at“ fau lt y

work m an sh ip th atis ne it he r in te nd edno r ex pe ct edfro m th e st an dp oi nt of th e co nt ract orcanco ns ti tu te an‘ acci de nt ’ an d, t hu s, an ‘ oc cu rren ce’ un de r a po st -1 98 6 C GL po li cy .” Id . at 8 88 . Becau se J.S.U.B. d idno t ex pe ctor i nt en d i ts

21subc on tra ct or ’s fau lt y work , th e d efec ti ve so il pre pa rat io n was an“ oc cu rren ce.” Id . The supr em e co urt al so ex pl ai ne d t ha t al lo win g c la im s ar is in g fr om fau lt y workm an sh ip wou ldno t co nv ertCGLs t o p erfo rm an ce b on ds . Id. at88 7– 88 . Perf orm an ce b on ds , exp la in edth e co urt, p ro te cta pr ojec t’s o wne r—n otit s co nt ract or

—b y gu aran te ei ng th e p ro

ject’s co m

pl et io n a fte r th e co nt ract orde fau lt s. Id . at 8 87 (ci ti ng Am . Hom e Ass ur . Co. v . Larki n Gen . Hos p., Ltd ., 59 3 S o. 2 d 19 5, 1 98 (Fl a. 19 92 ); S ch . Bd. o f Pal m Beac h C nt y . v. Vin cen t J . Fas an o, In c., 41 7 So . 2d10 63 , 10 65 (Fl a. 4t h Di st . Ct. Ap p. 1 98 2) ). A perf orm an ce b on d d oe s n ot pr ot ectth e co ntract or

or h is subc on tra ct orfro m li ab il it y . Id. at88 8 (c it in g F id . & Dep os itCo . of M d. v . Hartf or d C as . Ins . Co., 1 89 F. Sup p. 2 d 1 21 2, 1 21 8 (D. Kan . 20 02 )). The CGL in su rer, b y co nt ras t, “ in de m

ni fie s t he in su red ,” an d d oe s s o

“ on ly for res ul ti ng ‘ pr op erty da m ag e’ aris in g a fte r th e p ro ject i s co m

pl et ed .” Id . (quo ti ng Lenn ar Co rp . v. Grea t Am . Ins . Co., 2 00 S.W .3d65 1, 6 74 (Tex . App . 20 06 )) (i nt ern al qu ot at io n m ark s o m it te d) . Becau se of t hi s d is ti nc ti on , “ a v ari ety of de fic ie nc ie s t ha t d o n otco ns ti tu te ‘ pr op erty da m ag e’ m ay

be co ve redby a pe rfo rm an ce b on d, an d n otall de fic ie nc ie s caus e ad di ti on al pro pe rty dam ag e.” Id . (quo ti ng Lenn ar Co rp ., 20 0 S .W .3dat 6 74 ) (i nt ern al qu ot at io n m ark s o m it te d) . The supr em e co urt was th us sat is fie d t ha t CGLs wou ldno t b eco m e p erfo rm an ce 22bo nd s b y

reco gn iz in g t ha t co ns tru ct io n d efec ts co ul d g iv e ri se to co ve redcla im s. Id . 3. Hav in g d et erm in edth ata subc on tra ct or ’s fau lt y work m an sh ip co ul d g iv e ris e to anoc curren ce, the supr em e co urt turne d t o wh ethe r th e subc on tra ct or ’s fau lt y so il workha d c au se d “ pr op erty da m ag e” wi th in th e m ean in g o f th e CGL. As an in it ia l m at te r, th e co urt s umm ari zed , [The in su rer] andth e am ic i tha t ar gu e in fav orof i ts po si ti onass ert th atfau lt y

work m an sh ip th atin

jure s o nl y

th e work p ro du ctit se lf d oe s no t re su ltin “pr op erty

dam ag e.” Howe ve r, jus t l ik e th e d efi ni ti on of th e te rm “ oc cu rren ce,” t he de fin it io n o f “pr op erty da m ag e” i n t he CGL po li ci es do es no t d iff eren ti at e b etweendam ag e to th e co nt ract or ’s workan d d am ag e to othe r pr op erty . Id . at 8 89 . The co urt re

jecte d t he in su rer’s co nt en ti on th ata subc on tra ct or ’s def ect iv e work “ ren de redth e en ti re p ro ject d am ag edfro m

it s i nc ep ti on .” Id . Ins te ad , th e co urt drew the fol lo win g d is ti nc ti on : [F]aul ty w orkm an sh ip or d efec ti ve workth atha s d am ag edth e ot he rwis e n on de fect iv e co m pl et edpro ject h as cau se d “ ph y si cal in jury to tan gi bl e p ro pe rty” with in th e p la inm ean in g o f th e d efi ni ti on in th e po li cy . If th ere i s n o d am ag e b ey on d t he fau lt y workm an sh ip or de fect iv e work, t he n the re m ay be no res ul ti ng “pr op erty da m ag e.” Id .
23Inso ho ld in g, t he supr em e co urt ci te d alo ng li stof c as es fro m Flo rid a an d ot he r juri sd ic ti on s re co gn iz in g t hi s d is ti nc ti on . Clai m s s ol el y for“ th e co st s o f rep ai rin g andrep la ci ng th e actua l d efec ts in . . . co ns tru ct io n” are n otco ve red un de r CGL po li ci es . Id. at88 9– 90 (ci ti ng Cin ci nn at i In s. Co . v. Ven et ia n Terraz zo , Inc ., 19 8 F . Sup p. 2 d 1 07 4, 1 07 9 n .1 (E.D. Mo . 20 01 ); W. Orang e Lum be r Co . v. In d. Lu m

be rm en s M ut . Ins . Co., 8 98 So . 2d11 47 , 11 48 (Fl a. 5th Dis t. Ct . App . 20 05 ); Au to Owner s In s. Co . v. Tri pp Co ns tr., In c., 73 7 S o. 2 d 6 00 , 60 1 (F la . 3dDis t. Ct . App . 19 99 ); M oo re & As so cs ., 21 6 S .W .3dat 3 10 ; Len na r Co rp ., 20 0 S .W .3dat 6 79 –8 0) . In WestOran ge Lum be r, fo r ex am

pl e, th e co stof rem ov in g a ndrep la ci ng ced ar s id in g o f th e wro ng gra de , in st al le d i n b reac h o f co nt ract , was n ot“pr op erty da m ag e.” 8 98 So . 2dat 1 14 8; see als o Len na r Co rp ., 20 0 S .W .3dat 6 79 –8 0 (h ol di ng th atth e co stof r em ov in g a ndrep la ci ng de fect iv e synth et ic stuc co to pre em ptwate r da m ag e to bu il di ng s was no t “pr op erty da m ag e”). In Mo or e & As so ci at es , on th e o th er h an d, a s ub co nt ract or ’s def ect iv e win do w in st al la ti oncau se d “ pr op erty da m ag e” b ecau se th e d efec ti ve in st al la ti on al lo wedwate r pe ne tra ti onth atdam ag edth e win do ws’ su rro un di ng s. 2 16 S.W .3d at31 0. The supr em e co urt re as on edth atth e cl ai m in J.S.U.B. was m or e li ke th atin Mo or e & As so ci at es th anth os e in W es t Ora ng e Lum be r an d Len na r. “ [J .S.U.B.] 24do es no t i nv ol ve a cl ai m forth e co stof r ep ai rin g the subc on tra ct or ’s def ect iv e work” —t he so il pre pa rat io n i ts el f—“ bu t ra th er a cl ai m forrep ai rin g t he stru ctur al da m ag e to th e co m

pl et edho m es cau se d b y

th e subc on tra ct or ’s def

ect iv e work.” J.S.U.B., 9 79 So . 2dat 8 90 . Acco rd in gl y , we ho ldth ata po st -1 98 6 s ta nd ardform co m m erci al ge ne ral li ab il it y

po li cy with p ro du ct s co m

pl et ed -o pe rat io ns ha zard co ve rag e, is su edto a ge ne ral co nt ract or , pro vi de s co ve rag e fo r a cl ai m m ad e ag ai ns t the co nt ract orforda m ag e to th e co m pl et ed pr ojec t caus edby a sub co nt ract or ’s def ect iv e work p ro vi de d t ha t th ere i s n o s pe ci fic ex cl us io n t ha t o th erwi se ex cl ud es co ve rag e. Id . at 8 91 . Fin di ng no CGL exc lu si on ap pl ic ab le , th e co urt h el d t ha t the st ru ctur al da m ag e to th e h om es J.S.U.B. b ui ltwas c ov eredby its in su ran ce p ol ic ie s. Id . B. Ano th er ca se fro m

th e Fl or id a Supr em e Co urt, Au to -Owne rs Ins ur an ce Co . v. Po zzi W in do w Co., 9 84 So . 2d12 41 (Fl a. 20 08 ), sh ed s l ig htup on th e sc op e o f

“pr op erty da m ag e” wi th in th e m ean in g o f CGL po li ci es with P COH co ve rag e. In Po zzi , a subc on tra ct orde fect iv el y in st al le d c us to m

win do ws i nt o am

ul ti m il li on do ll ar h om e. Id . at 1 24 3. Aft er co m pl et io n o f th e h om e, th e o wne r co m pl ai ne d o f wate r le ak ag e aro un d t he win do ws, wh ic h h adcau se d d am ag e to th e are as of the ho m e su rro un di ng th e win do ws, as well as t o t he win do ws the m se lv es . Id. at

2512 44 . The h om eo wne r fi le d s ui t ag ai ns t the bu il de r an d t he subc on tra ct or , alo ng

wit h t he m anuf

actur er an d re ta il er o f th e win do ws. Id . at 1 24 3. The m anuf

actur er o f th e win do ws, the Po zzi W in do w Compan y , set tl edwith th e h om eo wne r an d a gr eedto rem edy th e d efec ti ve in st al la ti on of t he win do ws. Id . at 1 24 3– 44 . The m anuf actur er al so set tl edwith t he bu il de r, an d, as th e as si gn ee o f th e b ui ld er, fi le d s ui t ag ai ns t the bu il de r’s in su rer s eek in g c ov erag e fo r th e rep ai r an d re pl acement o f th e win do ws. The b ui ld er’s i ns ur an ce p ol ic y was, 1 6 fo r ou r pu rp os es , id en ti cal to th e p ol ic y he ldby Am el iain th e p res en t li ti ga ti on—i .e., a CGL po li cy with P COH co ve rag e. The cas e rea ch edth is co urt, wh ic h c ert ifi edth e fo ll owi ng qu es ti on to th e Fl or id a Supr em e Co urt: DOES A STAND ARD FORM [ COMM ERCIAL] GENERAL LIABILITY POLICY WITHPRODUCT[S] COMPLETED OPERATIONS HAZARD COVERAGE, SUCH AS THE POLICIES DESCRIB ED HERE, ISSUED TO A GEN ERAL CONTRACTOR, COVER THE GENERAL CONTRACTOR’ S LIABILITY TO A THIRD PARTY FOR THE COSTS OF REPAIR OR REPLACEMENT OF DEFECTIVE W ORK BY ITS SUBCONTRACTOR?

The only

issue in the suit between themanufa cture r and insure r wa s whether the 1 6 insurer w as oblig ated to pay for the r epair

and replace ment of the damag ed windows; the insure r had alr eady

paid “f or per sonal proper

ty damag e ca

used by the leakingwindows, but ref used to provide c overa g e for

the cost of r epair

or re place ment of the windows.” Auto-Owne rs Ins. Co. v. Poz zi W indow Co., 984 So. 2d 1241, 1244 (Fla. 2008). 26Id . at 1 24 3 (q uo ti ng Po zzi W in do w Co. v . Aut o- Owner s In s. Co ., 44 6 F .3d11 78 ,

11 88 (11 th Cir . 20 06 )) (al te rat io n i n o rig in al ). 1 7 Inan swe rin g t hi s que st io n, t he Flo rid a Supr em e Co urt fi rs t re it erat ed J.S.U.B.’s p ro no un cem en t o n p ro pe rty dam ag e. Nam el y , “ th ere i s a d iff eren ce be twee n acla im

forth e co st s o f rep ai rin g o r rem ov in g d efec ti ve work , whi ch is no t a c la im

for‘ pr op erty

da m ag e,’ anda cl ai m

for th e co st s o f rep ai rin g d am ag e cau se d b y th e d efec ti ve work , whi ch is a cl ai m for‘ pr op erty

da m ag e.’” Id. at12 48 (quo ti ng J.S.U.B., 9 79 So . 2dat 8 89 ) (i nt ern al qu ot at io n m ark s o m it te d) . In s o ex pl ai ni ng , th e co urt ci te d WestOran ge Lum be r, th e ced ar-s id in g c as e d is cu ss ed supr a, fo r th e p ro po si ti on th atth ere i s n o p ro pe rty dam ag e “ whe n t he on ly dam ag e al le ge d was th e co stof r em ov in g a ndrep la ci ng th e wro ng gra de ced ar s id in g t ha t ha d b een in st al le d” be cau se “ [t]he re was no da m ag e to th e co ns tru ct io n i ts el f.” Id . (ci ti ng W . Oran ge Lum

be r, 89 8 S o. 2 d a t 1 14 8) . “ [T]he m ere i nc lu si onof a de fect iv e co m

po ne nt , su ch as ade fect iv e win do w or t he de fect iv e in st al la ti on of a win do w, do es no t co ns ti tu te pro pe rty dam ag e u nl es s tha t d efec ti ve co m po ne nt As the F lorida Supreme Court noted, 1 7 [w] hen the Ele venth Circuit cer tified the question, it did not have the bene fit of our dec ision in Unit ed States F ire Ins. Co. v. J .S.U.B., Inc., 979 So. 2d 871 (F la. 2007), in which we held that a subc ontrac tor’s def ective w ork ca

n constitute an “occ urre nce” under a

post-1986 standard f

orm g ener al commer cial liability policy . Poz zi, 984 S o. 2d at 1243. 27res ul ts in ph y si cal in jury to s om e o th er t an gi bl e p ro pe rty.” Id. Thu s, the supr em e co urt d et erm in edth atth e an swe r to th e certi fie d que st io n was de pe nd en t o n a cri ti cal factua l d et erm in at io n: “whe th er the win do ws the m se lv es were d efec ti ve or whe th er the fau lt y

in st al la ti on by the Subc on tra ct orcau se d d am ag e to bo th th e win do ws an d o th er p orti on s o f th e co m pl et edpro ject.” Id. at12 47 . If the win do ws co nt ract edforwere d efec ti ve pri orto in st al la ti on , th enth e da m ag e to th e win do ws wo ul d n otbe co ve red . Id. at12 48 . In tha t ca se , th e cl ai m wou ldbe “ m erel y

a cl ai m to rep la ce a ‘def

ect iv e co m

po ne nt ’ inth e p ro

ject” an d co ul d n ot , inan d o f it se lf, c on st itut e p ro pe rty dam ag e. Id . Mor eo ve r, th e m ere i nc lu si on of ade fect iv e co m po ne nt , su ch as ade fect iv e win do w or t he de fect iv e in st al la ti on of awin do w, do es no t co ns ti tu te pr op erty da m ag e u nl es s t ha t d efec ti ve co m po ne ntres ul ts in ph y si cal in jury to s om e o th er t an gi bl e p ro pe rty. Id .; s ee al so id . at 1 24 9 (“ W it ho utm or e, th is all eg edde fect [iv e] [in st al la ti on ] is th e equi va le ntof the ‘ m ere i nc lu si on of ade fect iv e co m po ne nt ’ su ch as t he in st al la ti onof ade fect iv e ti re [o n acar], andno ‘ pr op erty da m ag e’ has oc cu rred .” (quo ti ng Mo or e & As so cs ., 21 6 S .W .3dat 3 10 ) (em ph as is om it te d) ). On t he ot he r ha nd , [i]f th e win do ws were pu rch as edby the Hom eo wne r an d wer e n ot de fect iv e b efo re b ei ng in st al le d, co ve rag e wou ldex is t fo r th e co stof rep ai r orrep la cem en t o f th e win do ws b ecau se th ere i s p hysic al in jury

28to tan gi bl e p ro pe rty (th e win do ws) c au se d b y de fect iv e in st al la ti on by a subc on tra ct or . Id . at 1 24 8. Th e d am ag e to th e win do ws the m se lv es wou ldbe “pr op erty da m ag e” in th is si tu at io n “be cau se th e win do ws were pu rch as edsep arat el y by the Hom eo wne r, were n otth em se lv es de fect iv e, an d wer e d am ag edas ares ul t o f th e fau lt y in st al la ti on .” Id . at 1 24 9. Th e d am ag e to th e win do ws the m se lv es wou ld th us be “ si m il ar t o d am ag e to an y ot he r pe rs on al it em

of t he Hom eo wne r, su ch as wall pape r orfurni tu re.” Id . 1 8 C. Ult im at el y , we ho ldth atth e Fl or id a Supr em e Co urt h as dra wn a d is ti nc ti on be twee n “ a cl ai m

forth e co stof r ep ai rin g t he subc on tra ct or ’s def ect iv e work,” whi chis no t co ve redun de r a CGL p ol ic y , and“ a cl ai m forrep ai rin g t he st ru ctur al da m ag e to th e co m

pl et ed[pr ojec t] cau se d b y th e subc on tra ct or ’s def

ect iv e work,” whi chis co ve red . J.S.U.B., 97 9 S o. 2 d a t 8 90 . “ A cla im li m it edto fau lt y workm an sh ip or m at eri al s,” a s t he J.S.U.B. co urt i ll us tra te d, “ is on e inwhi ch th e so le da m ag es are fo r rep la cem en t o f a d efec ti ve co m po ne ntor c orrect io n o f fau lt y in st al la ti on .” Id . at 8 89 –9 0 (q uo ti ng Mo or e & As so cs ., 21 6 S .W .3dat 3 10

Wit h the ce rtified question answe red, w e held that the da mag e to the windows wa s 1 8 cover ed bec ause Pozz i never argued that the windows the mselves wer e def ective. Pozzi Window Co. v. Auto-Owner s Ins., 294 F. App’ x 588, 591 (11th Cir. 2008). 29(in te rn al qu ot at io n m ark s o m it te d) (al te rat io n o m it te d) ). Becaus e o f th is pri nc ip le ,

th ere i s n o c ov erag e “ [i]f th ere i s n o d am ag e b ey on d t he fau lt y workm an sh ip ,” i.e., un le ss th e fau lt y

work m an sh ip ha s d am ag edso m e “ ot he rwis e n on de fect iv e” co m po ne ntof t he pro

ject. Id . at 8 89 . Mor eo ve r, if asubc on tra ct or is hi redto in st al l a p ro

ject c om po ne ntan d, b y

vi rtu e o f hi s faul ty w orkm an sh ip , in st al ls a de fect iv e co m

po ne nt , th enth e co stto rep ai r an d re pl ace t he de fect iv e co m po ne nt is no t “pr op erty

da m ag e.” Po zzi W in do w, 98 4 S o. 2 d a t 1 24 8. Si m il arl y , no nd efec ti ve an d p ro pe rly ins ta ll edraw m at eri al s ca n c on st itut e a d efec ti ve pro ject co m po ne ntwhen th e co nt ractsp eci fic at io ns cal l fo r th e u se of d iff eren t m at eri al s, y etth e co stto rei ns ta ll th e co rrec t m at eri al s i s n ot“pr op erty dam ag e”— ev en th ou gh th e rem edy

forsu ch a no nc on fo rm it y is to rem ov e an d re pl ace tha t co m po ne ntof t he pro

ject. Id . (ci ti ng W . Oran ge Lum be r, 89 8 S o. 2 d a t 1 14 8) . In ot he r wor ds , “un le ss th [e] defe ct iv e co m po ne ntres ul ts in ph y si cal in jury to s om e ot he r ta ng ib le pro pe rty,” i.e., ot he r th anto th e co m po ne ntit se lf, t he re i s n o co ve rag e. Id . (em

ph as is ad de d) . III. W e n ow ap pl y

th e CGL lang ua ge an d t he Flo rid a la w di st il le d abo ve to th e pr es en t d is pu te . Am el ia ’s cla im ag ai ns t Au ch te r fo r th e In n’s d efec ti ve roo f is no t a cl ai m for“pr op erty

da m ag e” wi th in th e p la inword in g o f th e CGL po li cy is su ed 30to Auch te r by Am eri su re. Reg is te r’s de fect iv e in st al la ti on of the Inn ’s roo f di d n ot

cau se “ph y si cal in

jury to t an gi bl e p ro pe rty” as re qu ire d t o t rig ge r co ve rag e u nd er th e CGL. Becaus e th ere i s n o c ov erag e, Am eri su re h as no du ty to i nd em ni fy or de fen d Au ch te r ag ai ns t Am el ia ’s exe cu ti on of t he st at e co urt ju dg m en t en fo rci ng th e arb it rat or ’s award . Init s arbi tra ti on pl ead in gs , Am el iaall eg edth at“ th e co nc ret e ti le roo f syste m forth e In n a ndCo nf

eren ce Ce nt er b eg anto fai l, re su lt in g i n l arg e, co nc ret e ti le s fa ll in g fr om

th e to p o f th e In n a ndCo nf eren ce Ce nt er, wit h re su lt in g a es th et ic de fic ie nc ie s an d d an ge r to pe rs on s an d p ro pe rty.” Reco rd , vo l. 4 , no . 43 -5 , at 4 . Am el iacla im edth atAuch te r’s ro of was i n b reac h o f th e co ns tru ct io n c on tra ct . Reg ard in g d am ag es , Am el iaco nt en de d t ha t “ Auc ht er, thr ou gh it s s ub co nt ract or , in st al le d ro of

s i n ade fect iv e m an ne r res ul ti ng in da m ag e to th e In n ro of an d t he ne edto rep la ce the en ti re ro of syste m at t he Inn an d C on fere nc e Cen te r.” Id . vo l. 2, n o. 3 4, ap p. B, at3. The arb it rat io n a wardrefl ect s tha t fu ll rep la cem en t was ne ces sa ry be cau se rep ai rin g t he roo f pi ecemeal was im po ss ib le . App el le es ’ Br. ap p. 3 , at 5 . Am el iaha s n ev er al le ge d t ha t an y pa rt o f th e In n o th er than t he roo f was dam ag edby the de fect iv e ro of . The on ly dam ag es Am el iaall eg es are t ho se to co rrec t the fau lt y roo f supp li edby Auc ht er’s s ub co nt ract or . In s o c la im in g, Am el iais effe ct iv el y see ki ng 31to sec ur e th e ro of th atAuch te r sh ou ldha ve in st al le d i n the fir stin st an ce: on e th at co nf orm edwith t he co ntractsp eci fic at io ns . Am el ia ’s cla im is thus si m

pl y a

“ cl ai m forth e co stof r ep ai rin g t he subc on tra ct or ’s def ect iv e work.” U.S. Fire I ns . Co . v. J .S.U.B., Inc ., 97 9 S o. 2 d 8 71 , 89 0 (F la . 20 07 ). As s uc h, Am el ia ’s cla im al le ge s n o “ pr op erty

da m ag e.” See id . Alth ou gh th e lo ss of r oo f ti le s m ay be sai d to ha ve “ da m ag ed ” th e st ru ctur al in te gr it y of t he roo f, th ereb y

ren de rin g i t de fect iv e, “ th ere i s n o d am ag e b ey on d t he fau lt y work m an sh ip ” b ecau se th e de fect iv e ro of

ha s n otda m ag edso m e “ ot he rwis e n on de fect iv e” co m po ne ntof t he pr ojec t. See id . at 8 89 . This cas e is li ke W es t Orang e Lum be r Co . v. In di an a Lum be rm en s M utua l In su ran ce Co ., 89 8 S o. 2 d 1 14 7, 1 14 8 (F la . 5th Di st . Ct. Ap p. 20 05 ), ci te d wi th ap pr ov al in J.S.U.B., 9 79 So . 2dat 8 89 , andin Aut o- Owner s In su ran ce Co . v. Po zzi W in do w Co., 9 84 So . 2d12 41 , 12 48 (Fl a. 20 08 ), whe re the co stof r em ov in g a ndrep la ci ng si di ng sh in gl es —wh ic h wer e ti le d i n an ov erl ap pi ng , in te rlo ck in g m an ne r—wa s n otpro pe rty dam ag e ev enth ou gh th e de fectne ces si ta te d ato ta l re pl acement. Se e W. Oran ge Lum be r, 89 8 S o. 2 d a t 11 48 . The o ut co m e is no di ffer en t wh ere, as he re, the ti le s ar e in st al le d a to p a

32bu il di ng rathe r th anon it s fa ces . Am eri su re’s CGL p ol ic y th us do es no t co ve r Am el ia ’s cla im . 1 9 Mo reo ve r, Am el ia ’s cla im all alo ng ha s b een so le ly to re m edy th e in st al la ti onof ade fect iv e co m po ne nt , whi ch inth is cas e is th e ro of as awho le . Bec au se th e In n’s ro of

was a n am al ga m at io n o f sc or es of i nt erl oc ki ng roo fin g t il es an d o th er ro of

in g m at eri al s, the roo fin g t il es th em se lv es are n otth e rel ev an t co m po ne nt s i n t hi s ca se . They are s im pl y so m e o f th e raw m at eri al s fr om whi ch th is pa rti cu la r ro of

was m ad e. Rathe r, th e rel ev an t co m po ne ntin th is cas e is th e In n’s en ti re ro of

it se lf. Am el iahi redAuch te r to pro vi de anInn with aroo f; Auc ht er h ire d R eg is te r to co ns tru ctth atroo f—n otsi m pl y to in st al l t il es . The

The CGL

contains languag e that, take n in isolation, superficially sug g ests cover ag e for 1 9 the roof in this ca se. The policy provides cove rag e for

“tang ible proper

ty” that “suf

fer s phy sical injury ,” unless a policy

exclusion applies. The roof he re is “ta ng ible,” per

haps as oppose d to intang ible. And the roof

is “proper

ty”: Amelia owne d it, the tiles from which it is made, the building upon which it re sts, and the land upon which that building sits. Also, through the subcontrac tor’s fa

ulty installation, the roof’s integrity and per formanc e we re injure d, if at all, phy sically . There is simpl y no other wa

y —emotionally

or spiritually , for e x ample—to injure a roof. The crux of Amelia’s c ontention, then, is that a roof whose tiles have blown a way is a roof lackingstructura l integrity , and that a r oof without integ rity is an injured roof

. As Amelia would have it, the subc ontrac tor whose de fec tive installation enabled those tiles to blow awa y thus cause d “phy sical” “ injury” to “tang ible” “pr operty .” Combini ngthese four

words, howe ver, doe s not yield cover ag e. Amelia’ s claim, in eff ect, r educe s to the following: Ame lia paid Auchte r to construc t a building with a r oof; due to Auchter ’s subcontra ctor’s f aulty workmanship in installing the r oof’s tiles, Amelia did not rec eive the r oof for

which it paid. B ased on this pre mise, as Amerisure argued at the summar y judgme nt hearing, “ The re ason [Auchter] had to replace [the roof ] i s beca use [Amelia] di dn’t g et what [it] paid for.” Record, vol. 6, no. 66, at 14. This is nota cla im for “pr operty damag e.” See J .S.U.B., 979 So. 2d at 889. 33en ti re ro of

’s fau lt y co ns tru ct io n re nd eredth e ro of de fect iv e—ade fectth at , as the pa rti es ackno wled ge , canbe rem ed ie d o nl y th ro ug h t ot al reco ns tru ct io n. As Po zzi W in do w in st ru ct s, h owe ve r, th is de fectalo ne can no t co ns ti tu te pro pe rty dam ag e. See 9 84 So . 2dat 1 24 8. If t he de fect iv e ro of ha d “ res ul t[e d] inph y si cal in jury to so m e o th er t an gi bl e p ro pe rty,” id ., th ere wo ul d h av e b eenpro pe rty dam ag e, bu t be cau se Am el iasee ks on ly to re m edy th e d efec t— in effe ct , to ob ta in th e no nd efec ti ve roo f th atsh ou ldha ve be enbu il t i n t he fir stpl ace—th ere i s n on e, se e id . Am el ia ’s arg um en t tha t the ti le s d am ag edby the fau lt y in st al la ti on co ns ti tu te pro pe rty dam ag e is unpe rs ua si ve . Alth ou gh th e ti le s t he m se lv es were no nd efec ti ve , th ey

were s im pl y th e m at eri al s u se d t o c on st ru ctth e d efec ti ve co m po ne ntan d a re thu s i rrel ev an t t o t he “pr op erty dam ag e” d et erm in at io n. Se e id . Eve n i f th e b ro ke n t il es co ns ti tu te d “ pr op erty da m ag e,” as th e d is tri ctco urt ex pl ai ne d, “ Am el ia ’s reco ve ry wou ldbe li m it edto th e d am ag es to th e in di vi du al ti le s t ha t ar e b ro ke n.” Orde r at12 , Am eri su re Mu t. In s. Co . v. Au ch te r Co ., No. 3: 08 -cv -6 45 -J -3 2HTS (M .D. Fla. Fe b. 4 , 20 10 ). Of cou rs e, Am el ia ’s cla im is no t fo r da m ag e to in di vi du al ti le s, b utrathe r to rece iv e th e ro of forwhi ch itpa id . Alt ho ug h t he arb it rat orde te rm in edth atrep la ci ng th e ro of was t he on ly w ay

to rem edy th e d eg rad at io n c au se d b y th e ti le s’ def

ect iv e in st al la ti on , th at 34de te rm in at io n d oe s n ottra ns fo rm Am el ia ’s cla im

in to on e fo r “pr op erty da m ag e.” 2 0 Si m il arl y , Am el ia ’s pro po se d d is ti nc ti on be twee n d efec ti ve work m an sh ip al on e (u nc ov ered ) an d d efec ti ve work m an sh ip th atul ti m at el y da m ag es th e fu nc ti on al in te gr it y

of t he work m an ’s pro du ct(co ve red ) is a di st in ct io n wi th ou t a di ffer en ce. If th e al le ge d d efec t wer e, fo r ex am pl e, th atReg is te r in st al le d t he 2 1
To be c lear , Poz zi W indow does not compel a findingof cove rag e in this case on the 2 0 ground that the owne r-pur chase d roofingtiles in thi s case are analog ous to the owner- purcha sed, custom-built windows in P ozz i Wi ndow. The c omponents involved in these two ca ses ar e not analog ous. A window may be a c omponent of a building , but eac h window is itself composed of various ele ments: glazing, jambs, sills, sashes, etc. To say that nondefe ctive but improperly installed sashes within the finished window damag ed the window is not to say that the sashes cause d “prope rty

damag e” to the w indow, but rather that the window is itself defe ctive. Pozz i Window ins tructs that there would be no cove rag e for the installation of such a de fec tive window. See 984 So. 2d at 1248. The properly analog ous description of the construction of Amelia’s buildingis thus that nondefec tive but improperly installed roofingtiles within the finished roof r ender ed the r oof def ective. Just as we ca

nnot say that the def

ective sa shes ca

used “prope rty damag e” to the w indows, we c annot say the tiles cause d “prope rty damag e” to the r oof. So, too, is it irreleva

nt that Amelia purc hased the roofingtiles Register used to construc t the Inn’s roof. T his is because the installation of a def ective c omponent—here , the roof—doe s not give rise to a c laim for “property damag e” a

bsent damag e to some prope rty other than the component itself. See id. Ag ain, the prope r ana log to Pozz i Wi ndow would be, f or instance , a case in which Amelia pur chase d a modular pr efa bricated roof, which, though nondefe ctive, wa s installed defe ctively

by a subcontra ctor, ther eby

damag ing the roof itself. Pozz i Wi ndow sug g ests that, in such a c ase, the re w ould be cove rag e. See id. at 1249. Such fac ts, however , are not the fac ts of this case. Auc hter hire d Reg ister to construct the r oof compone nt of the Inn, of Amelia’s tiles, which Reg ister did defe ctively and in bre ach of

contra ct. This is thus a defe ctivecomponent-r eplac ement ca se, for which ther e ca

n be no cove rag e under

Poz zi W indow and J .S.U.B. Amici provide fur ther illustration in their brief: 2 1 Ex amples of ‘ faulty

workmanship’ which do not involve ‘prope rty damag e[] ’ include, but ar e not limited to, use of incorre ct or insuffic ient materia ls, wrong color or ty

pe of pa int, failure to completejob-related tasks, and imprope r 35wro ng gra de of t il es in bre ach of c on tra ct , Am el ia ’s cla im ed“ da m ag e” wo ul d b e

th e sa m e: be cau se of t he way a ro of is co ns tru ct ed , a ne w roo f wou ldha ve to be in st al le d t o c orrectsu ch a de fect . Esse nt ia ll y th e sa m e cl ai m

was h el d n otto be pr op erty da m ag e in W es t Ora ng e Lum be r, 89 8 S o. 2 d a t 1 14 8. Th e p art ic ul ar m an ife st at io n o f th e b reac hi ng de fect iv e workm an sh ip wou ldth eref or e b e irr el ev an t, s o l on g a s i t d oe s n otda m ag e so m e o th er n on de fect iv e p ro ject co m po ne nt . Am el ia ’s cla im

th us reduc es to on e whe re the on ly alle ge d d am ag e is th e d efec t i ts el f. Thi s d am ag e al on e is no t “pr op erty da m ag e” u nd er the lan gu ag e of th e CGL orFlo rid a la w. See Po zzi W in do w, 98 4 S o. 2 d a t 1 24 8; J.S.U.B., 9 79 So . at 8 89 . 2 2 installation of doors that open in the wr ongdirec tion. Brief of Amicus Curiae Nat’l Ass’n of Home Builder s, Fla. H ome B uilders Ass’n &United Policy holders 10. Put another wa

y , the claim in this case w ould be the sameif, as Amelia tries to 2 2 distinguish, the tiles had bee n installed defe ctively but the defe ct had be en discove red be fore tiles beg an blowingawa

y . Def ective installation, as the a rbitrator f ound, meant that the tiles we re prone to rotation and brea kag e. B eca

use there was no wa

y to determine which individual tiles had bee n improperly

installed, the only

way to remedy

the def ective installation wa s to remove and replace all the tiles—in effe ct, to install a new roof that complied with the contra ct specific ations. Not only

did eac h tile have to be a ttached to the r oofingsy stem in a prec ise manner , but eac h tile in a roof r elies on its neighboringtiles to function as a c ohesive sy stem. Be cause of the tiles’ interc onnectivity , installations thereof that we re in bre ach of contra ct and that would require repla cingthe roof w ould include installations that—as here—made the tiles more prone to flying of

f the roof . But such br eac hing installations would also include the installation of tiles which were of the wr onggrade . In the latter c ase, w ere Amelia to insist on tiles of the gradespecifie d in the contra ct, the roof ing subc ontrac tor would have to remove the nonconfor

ming tiles and r einstall the roof w ith the conformingtiles. I f Amelia’ s policy interpre tation were acc epted, ther efor e, many brea chinginstallations of the tiles would thus 36Bec au se we de te rm in e th atAm el ia ’s cla im in vo lv es no “pr op erty

da m ag e,” we ne edno t d et erm in e whe th er an y po li cy ex cl us io ns or e xc ep ti on s ap pl y . Cf. J.S.U.B., 9 79 So . 2dat 8 91 (“ [A] pos t-1 98 6 s ta nd ardform [CGL] po li cy

with [PCOH] cov erag e . . . pro vi de s co ve rag e fo r a cl ai m m ad e ag ai ns t the co nt ract or fo r da m ag e to th e co m

pl et edpro ject c au se d b y

a subc on tra ct or ’s def

ect iv e work pr ov id edth atth ere i s n o s pe ci fic ex cl us io n t ha t o th erwi se ex cl ud es co ve rag e.”). The ap pl ic at io n o f th e “ y ou r work” ex cl us io n a ndit s s ub co nt ract or ex cep ti on th us ha s n o i m pa cton th e o ut co m e o f th is cas e. W e n ot e, ho wev er, tha t the se pr ov is io ns canbe readin pa ri m at eri a wit h t he “pr op erty dam ag e” re qu ire m en t an d st il l b e g iv enful l ef

fect . See i d. at87 7. As th e d is tri ctco urt ex pl ai ne d, [F]aul ty w orkm an sh ip to on e p artof apro ject ( th e ro of

, forex am

pl e) can lea d t o d am ag e to an ot he r pa rt o f th e p ro ject ( su ch as s tu cco wall s whi ch m ay

lea k fr om

fau lt y roo f co ns tru ct io n) . In s uc h a n e xa m pl e, un de r Auc ht er’s CGL p ol ic ie s, the da m ag e to th e stuc co wall s wo ul d be “pr op erty

da m ag e” wi th in th e m ean in g o f th e p ol ic y , bu t wo ul d or di naril y be ex cl ud edun de r th e “ y ou r work” ex cl us io n, u nl es s the stuc co wall s h adbe enco ns tru ct edby a sub co ntract or , inwhi ch cas e th e d am ag e co ul d b e co ve redby the subc on tra ct orex cep ti on to th e “ y ou r work” ex cl us io n.

“dama g e” the roof by

requiringreinstallation. Reinstalling r oof tiles may be, as he re, a

very expensive proposition. A very expensive claim for r epair and replace ment of def

ective workmanship alone is not, however, a claim for pr operty

damag e cove red by

a CGL policy . 37Ord er at14 n.9 . Am el ia , onth e o th er h an d, h as ne ve r cl ai m edsu ch da m ag e to an y

co m po ne ntof t he Innot he r th anth e ro of it se lf a ndth us ha s n otcla im ed“pr op erty da m ag e.” Acco rd in gl y , th e d is tri ctco urt’s Ord er g ran ti ng Am eri su re’s m ot io n fo r su m m ary jud gm en t an d d en y in g Am el ia ’s m ot io n fo r su m m ary jud gm en t i s h ereb y AFFIR MED.

38HILL, con cu rri ng dubi ta nt e:

I be li ev e th atth e si gn ifi can t d is ag reem en t b etweenJu dg es Tjofl atan d Carn es reg ard in g wh ic h c as e – W es t Or an ge Lu mbe r C

o. or Poz ziW in do w Co
. – m or e acc ur at el y

pre di ct s wh atth e Fl or id a Supr em e Co urt wo ul d h ol d o n t he fact s of th e in st an t ca se m il it at es in fav orof t he cert ifi cat io n o f th is cas e to th atco urt. Unabl e to pe rs ua de m

y bro th ers as t o t hi s p ru de ntco urt o f act io n, I c on cu r dubi ta nt e in th e o pi ni on of J ud ge Tjofl at .

39CARNES, Ci rcu itJu dg e, di ss en ti ng :

My co ll eag ue , Ju dg e Hil l, co nc ur s “ dubi ta nt e” i n the de ci si on of t hi s C ou rt affi rm in g t he jud gm en t o f th e d is tri ctco urt. By co ntras t, m

y di ss en t i s fr ee o f dubi ta nt e-n es s. I am

no t dub it an te in th e le as t tha t the Flo rid a Supr em e Co urt’s de ci si on in Aut o- Owner s In su ran ce Co . v. Po zzi W in do w Co., 9 84 So . 2d12 41 (Fl a. 20 08 ), di ct at es a de ci si on in th is cas e d iff eren t fr om

th e o ne th e m ajor it y reac he s. Inth e Po zzi W in do w cas e, th e Fl or id a Supr em e Co urt h el d t ha t co ve rag e fo r th e co stof r ep ai r orrep la cem en t o f da m ag edwin do ws d ep en de d o n wh ethe r th e win do ws were de fect iv e to be gi n wi th or we re d am ag edbe cau se of i m pr op er in st al la ti on . See i d. at12 49 . The co urt h el d t ha t i f th e win do ws were no t de fect iv e b efo re b ei ng in st al le d, the da m ag e d on e to th em was “ pr op erty

da m ag e” fo r pu rp os es of aco m

m erci al ge ne ral li ab il it y

in su ran ce p ol ic y . See i d. In ou r cas e, th e Am el iaIsl an d C om pa ny’ s ro of

ti le s wer e n otde fect iv e to be gi n wi th bu t were d am ag edwhenim

pr op erl y in st al le d. Un de r th e Po zzi W in do w dec is io n, t ha t is “pr op erty

da m ag e” co ve redby the Am el iaIsl an d C om pa ny’ s co m

m erci al ge ne ral li ab il it y

po li cy . The win do ws i nv ol ve d i n t he Po zzi W in do w cas e were c us to m -m ad e o ne s th ata pr op erty

own er b ou gh t d ire ct ly from a ret ai le r an d h adde li ve redto hi s 40pr op erty

on whi ch a ho us e was be in g c on st ru ct edforhi m . Id. at12 43 . After a subc on tra ct orin st al le d t he win do ws, wat er l eak edin aro un d t he m . See i d. An in su ran ce co ve rag e d is pu te aro se ab ou t the sco pe of “ pr op erty da m ag e,” wh ic h i s th e sa m e te rm

at i ss ue in th e p res en t ca se . See i d. at12 44 –4 5. Th e in su rer re fu se d to pa y forth e co stof r ep ai rin g o r rep la ci ng th e d am ag edwin do ws. Id . at 1 24 4. Inres po ns e to a cert ifi edqu es ti on fro m th is Co urt, the Flo rid a Supr em e Co urt h el d t ha t wh ethe r th e co stof r ep ai rin g o r rep la ci ng th e win do ws was

“pr op erty da m ag e” u nd er the po li cy hi ng edon a cru ci al factua l i ss ue . See i d. at 12 47 . Thatfactua l i ss ue was “ whe th er the win do ws the m se lv es were d efec ti ve or whe th er the fau lt y

in st al la ti on by the Subc on tra ct orcau se d d am ag e to bo th th e win do ws an d o th er p orti on s o f th e co m pl et edpro ject.” Id. Th e “bo th . . . an d” co ns tru ct io n i n t ha t s en te nc e m ig htbe readto im pl y th atda m ag e to th e win do ws al on e wou ldno t b e en ou gh to co ns ti tu te pro pe rty dam ag e. Bu t tha t i s n otan accu rat e rea di ng be cau se th e “ da m ag e to . . . ot he r po rti on s o f th e co m pl et ed pr ojec t,” i d., was no t atis su e in Po zzi W in do w; i t was no t atis su e b ecau se th e in su rer h adalr eady

pa idforth e “pe rs on al pro pe rty dam ag e cau se d b y th e le ak in g win do ws.” Id . at 1 24 4. Inres po ns e to ou r in qu iry, the Flo rid a Supr em e Co urt ad dr es se d t he qu es ti on of wh ethe r th e co stof r ep ai rin g o r rep la ci ng th e d am ag ed win do ws the m se lv es was c ov ered . See i d. at12 43 –4 4. Th e an swe r itga ve was 41th atitde pe nd edon whet he r th e win do ws were de fect iv e o r da m ag edbe fo re b ei ng

in st al le d. If t he y

were, the re was no po li cy co ve rag e; ho wev er, i f th ey were n ot de fect iv e o r da m ag edbe fo re the in st al la ti on be gan, t he po li cy co ve redth e co stof rep ai rin g o r rep la ci ng th e win do ws. Id . at 1 24 3– 44 . No o ne ha s s ug ge st edth atth e ro of ti le s i nv ol ve d i n t hi s ca se were d efec ti ve orda m ag edbe fo re the in st al la ti on be ga n. In st ead , eve ry on e ag rees th atth e da m ag e to th e ti le s o ccurredbe cau se th e subc on tra ct orim pr op erl y in st al le d t he m . As the m ajor ity

op in io n e xp la in s, d efec ti ve in st al la ti oncau se d t he ti le s t o fa ll off of th e ro of , andso m e o f th e ti le s t ha t fe ll hi t o th er t il es an d c rack edth em . Maj. Op. at6. No ne of the dam ag edti le s co ul d b e u se d o r re-u se d, s o a ll of tho se ti le s were ef fect iv el y de st ro y ed . Destro y edroo f ti le s m eetth e co m m erci al ge ne ral li ab il it y po li cy ’s def

in it io n o f “pr op erty

dam ag e” as “ [p ]hy si cal in jury to t an gi bl e pr op erty .” Doc. 3 6- 2 a t § V, ¶ 17 a. The de st ru ct io n o f th os e in di vi du al ti le s was no t the ful l ex te ntof t he pr op erty da m ag e cau se d b y

th e d efec ti ve in st al la ti on . Becau se so m e o f th e ti le s were d es tro y ed , all of t he ti le s o n t he roo f ha d t o b e rep la ced . As th e m ajor it y op in io n e xp la in s, “ th e ro of de si gn di d n otpe rm itin sp ect io n a ndrep la cem en t o f de fect iv el y

in st al le d t il es on anin di vi du al ba si s,” a nd“ ti le s i de nt ic al to th os e u se d on th e In n’s ro of

were u na va il ab le .” Maj. Op. at9. Fo r th os e rea so ns , un de r th e 42te rm s o f th e g en eral co m m erci al li ab il it y

in su ran ce p ol ic y , th e “pr op erty da m ag e” th atoc cu rredas ares ul t o f th e d efec ti ve in st al la ti on of the ti le s was bo th th e

“ [p ]hy si cal in

jury to t an gi bl e p ro pe rty” (th e d es tro y edti le s) an d t he “ [l]os s o f us e of tan gi bl e p ro pe rty tha t i s n otph y si cal ly inju red ” (the ot he r ti le s o n t he roo f). Doc . 36 -2 at § V, ¶¶ 17 a, 17 b. Subs ti tu ti ng roo f “ ti le s” for“ win do ws” in th e k ey pa rts of t he Flo rid a Supr em e Co urt’s Po zzi W in do w op in io n s ho ws tha t the re i s co ve rag e in th is cas e:

“ If the [ti le s] were p ur ch as edby the [Am el iaIsl an d C om pa ny] an d wer e n ot de fect iv e b efo re b ei ng in st al le d, co ve rag e wou ldex is t fo r th e co stof r ep ai r or rep la cem en t o f th e [t il es ] be cau se th ere i s p hysic al in jury to t an gi bl e p ro pe rty (th e [ti le s]) cau se d b y

de fect iv e in st al la ti on by a sub co nt ract or .” Po zzi W in do w, 98 4 So . 2dat 1 24 8. Aga in , subs ti tu ti ng “ ti le s” for“ win do ws” in th e Po zzi W in do w op in io n sh ows ho w we sh ou ldde ci de th is cas e: [I]f th e cl ai m

is forth e rep ai r orrep la cem en t o f [t il es ] th atwere n ot in it ia ll y de fect iv e b utwere d am ag edby the de fect iv e in st al la ti on , th enth ere i s p hysic al in

jury to t an gi bl e p ro pe rty. In othe r wor ds , be cau se th e [t il es ] were p ur ch as edsep arat el y by [the Am el iaIsl an d Co m pa ny] , were n otth em se lv es de fect iv e, an d wer e d am ag edas a res ul t o f th e fau lt y

in st al la ti on , th enth ere i s p hysic al in jury to ta ng ib le pro pe rty, i.e., [ti le s] dam ag edby defec ti ve in st al la ti on . In de ed , dam ag e to th e [t il es ] th em se lv es cau se d b y th e d efec ti ve in st al la ti on is si m il ar t o d am ag e to an y ot he r pe rs on al it em

of the 43[p ro pe rty owne r], su chas wa ll pape r orfurni tu re. Thu s, co ve rag e

wou ldex is t fo r th e co stof r ep ai r orrep la cem en t o f th e [t il es ] be cau se th e Subc on tra ct or ’s def

ect iv e in st al la ti on cau se d p ro pe rty dam ag e. Id . at 1 24 9. The m ajor it y

op in io n m is in te rp ret s the fol lo win g s en te nc e fro m th e Po zzi W in do w op in io n: “ [T]he m ere i nc lu si on of ade fect iv e co m po ne nt , su ch as a de fect iv e win do w or t he de fect iv e in st al la ti on of awin do w, do es no t co ns ti tu te pr op erty da m ag e u nl es s t ha t d efec ti ve co m po ne ntres ul ts in ph y si cal in jury to so m e o th er t an gi bl e p ro pe rty.” Id. at12 48 ; s ee M aj. Op. at28 . Butth e se nt en ce th atimm ed ia te ly foll ows th aton e in th e Po zzi W in do w op in io n s ho ws h ow in ap pl ic ab le th e st at em en t i n t ha t quo te d s en te nc e is to th e p res en t ca se :

“ Acco rd in gl y , if the cla im in th is cas e is forth e rep ai r orrep la cem en t o f win do ws th atwere d efec ti ve bo th pri orto in st al la ti on an d a s i ns ta ll ed , th enth atis m erel y a cl ai m to rep la ce a ‘def

ect iv e co m

po ne nt ’ in th e p ro

ject.” 98 4 S o. 2 d a t 1 24 8 (em ph as is ad de d) . In thi s ca se , th e ro of ti le s wer e n ota de fect iv e co m po ne nt— th ey were n ot“ de fect iv e b ot h p rio r to in st al la ti on an d a s i ns ta ll ed ,” id .; the in su red is no t s eek in g t o re pl ace a n i ni ti al ly defec ti ve co m po ne ntin th e ro of

in g p ro ject. In st ead , un de r Po zzi W in do w, bec au se th e cl ai m inth is cas e is forth e rep ai r or rep la cem en t o f ti le s “ th atwere n otin it ia ll y de fect iv e b utwere d am ag edby the de fect iv e in st al la ti on , th enth ere i s p hysic al in jury to t an gi bl e p ro pe rty.” Id. at 4412 49 . The Po zzi W in do w form ul a is : n on -d efec ti ve co m po ne nt s d am ag edby de fect iv e in st al la ti on equa ls ph y si cal in jury to t an gi bl e p ro pe rty, whic h i s p ro pe rty da m ag e. Fedin to th atform ul a, th e fac ts of t hi s ca se ad d up t o “ pr op erty da m ag e” an d c ov erag e. The m ajor it y

op in io n a tt em

pt s t o fr am e th e ro of

as awho le as t he “ de fect iv e co m po ne nt ” in th is cas e. See M aj. Op. at34 , 36 n.2 0. Bu t n o p artof t he roo f was ev er d efec ti ve ex cep t fo r th e ti le s t ha t wer e d am ag edor d es tro y edbe cau se th ey were i m pr op erl y in st al le d. Th e fac ts of t hi s ca se si m pl y do no t fi t i n t he de fect iv e co m po ne ntsce na rio de sc rib edin Po zzi W in do w. See 9 84 So . 2dat 1 24 8. In st ead , th es e fac ts fitin to th e n on -d efec ti ve co m po ne nt/d efec ti ve in st al la ti on sce na rio . See i d. at12 49 . For t ha t re as on , I wou ldho ldth atth e Po zzi W in do w dec is io n res ol ve s t he di sp ut e infav orof i ns ur an ce co ve rag e. The m ajor it y

op in io n, h owe ve r, as se rts th at“ [t]hi s ca se is li ke W es t Ora ng e Lum be r Co . . . . wher e th e co stof r em ov in g a ndrep la ci ng si di ng sh in gl es —wh ic h were t il edin anov erl ap pi ng , in te rlo ck in g m an ne r—wa s n otpro pe rty dam ag e ev en th ou gh th e d efec t n eces si ta te d ato ta l re pl acement.” Maj. Op. at33 . The m ajor it y ’s W es t Ora ng e Lum be r an al og y , li ke an y

de fect iv e co m

po ne nt , won ’t work. The in st al la ti on of t he si di ng sh in gl es in th atcas e d idno t d am ag e th em ; the sh in gl es were al read y

“ de fect iv e” b efo re the y

were i ns ta ll edbe cau se th ey di d n ot 45co nf

orm to th e co nt ractsp eci fic at io ns . See W. Oran ge Lum be r Co . v. In d. Lum be rm en s M ut . Ins . Co., 8 98 So . 2d11 47 , 11 48 (Fl a. 5th DCA 2 00 5) . The subc on tra ct orwho ha d i ns ta ll edth os e d efec ti ve sh in gl es su edth e supp li er o f th em , an d t he co urt h el d t ha t the in su ran ce co m pa ny hadno du ty to d efen d o r in de m ni fy th e sh in gl e supp li er. Id . at 1 14 7– 48 . The co urt n ot ed : “ [T]he al le ga ti on s i n t he co m pl ai ntsh ow the own er o r ge ne ral co nt ract or ’s pro pe rty su ffer edno da m ag e fro m th e fai lu re t o s up pl y

th e co rrec t qua li ty of [s hi ng le s]. The o nl y da m ag e al le ge d was th e co stor e xp en se to th e v en do r to rem ov e th e d efec ti ve pro du ctan d supp ly an acc ep tabl e subs ti tu te .” Id . at 1 14 8. Th e co urt al so no te d t ha t the in su ran ce p ol ic ie s i n t ha t ca se co nt ai ne d “ ex cl us io ns whi ch cle arl y ex em ptfro m co ve rag e d am ag es in curredby a ven do r who supp li es de fect iv e p ro du ct s an d i s requi redto rem ov e an d re pl ace t he m with t he sp eci fie d p ro du ct s.” Id . at 1 14 9 (em ph as is ad de d) . One m or e ti m e. Inth is cas e ti le s, wh ic h wer e th e co rrec t p ro du ctan d wer e no t d efec ti ve , were s ol d t o the Am el iaIsl an d C om pa ny, andth enth ey

were da m ag edby defec ti ve in st al la ti on , andas ares ul t o f th atdam ag e al l o f th e ti le s ha d t o b e rep la ced . The WestOran ge Lum be r cas e is di ffer en t b ecau se in itth e sh in gl es were the wron g p ro du ctan d fo r th atreas on were d efec ti ve , requi rin g t ha t al l the sh in gl es be rep la cedev enth ou gh th ey were i ns ta ll edco rrec tl y . The Fl or id a 46Supr em e Co urt’s Po zzi W in do w dec is io n i s o pe n a ndshuton th e is su e inth is cas e,

an d t he m ajor it y ’s att em

ptto ham m er the fact s o f th is cas e in to th e West Ora ng e Lum be r de ci si on is it se lf a n i ns ta nc e o f de fect iv e in st al la ti on . Andth ere i s n o reas onto be dubi tant e ab ou t tha t.

47