Opinion ID: 737192
Heading Depth: 2
Heading Rank: 2

Heading: The Structural Action

Text: 10 Contrary to H/C's argument, we find that the cost of repair of defective property, even if it affects non-defective property, is not property damage under Ninth Circuit interpretation of California law. See New Hampshire Ins. Co. v. Vieira, 930 F.2d 696 (9th Cir.1991). Nor does the recent California Court of Appeals case, Armstrong World Industries, Inc. v. Aetna Casualty & Surety Co., 45 Cal.App.4th 1 (Cal.Ct.App.1996), change this determination because H/C's situation is factually inapposite to that in Armstrong: while the design damage to the structure is no doubt physically linked with the structure, design damage is not really a potentially dangerous product like asbestos. Further, an interpretation that design flaws are property damage would eviscerate the rule that physical incorporation of a defective product into another does not constitute property damage unless there is physical harm to the whole, which Armstrong did not overturn but instead explicitly distinguished. The inferior materials alleged to have been used, while being closer in nature to a potentially dangerous product, are not linked with the building the way asbestos is. 11 We further reject H/C's argument that Vieira applies only when it is the insureds' own work at issue. Finding in favor of H/C's position would entail the unattractive result that the definition of property damage changes when the insured is not a contractor. Additionally, the public policy concern articulated in Vieira was not the cornerstone of the decision.