Court Opinion

ID: 9617365
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:54:28.707725+00
Date Added: 2024-06-11T18:04:08.701434
License: Public Domain

Justice ERICKSON
specially concurring:
The Fletcher Corporation (Fletcher) was the general construction contractor and own*137er of the Water Wheel Inn Motel. The United States Fidelity and Guaranty Co. (USF & G) issued a special multi-peril (SMP) casualty insurance contract to Fletcher in February 1975. The SMP policy provided in coverage C that:
The Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies, caused by an occurrence and arising out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental to the business of the named insured conducted at or from the insured premises and the Company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage....
This insurance does not apply
(a) to liability assumed by the insured under any contract or agreement except an incidental contract; but this exclusion does not apply to a warranty of fitness or quality of the named insured’s products or a warranty that work performed by or on behalf of the named insured will be done in a workmanlike mannerly
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For the purpose of determining the limit of the Company’s liability, all bodily injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence.
(Emphasis added.) The policy defines “occurrence” as “an accident, including injurious exposure to conditions, which results during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured.”
Fletcher completed construction of the Water Wheel Inn in July 1975. The Brow-ders purchased the motel from Fletcher in April 1976 and obtained an assignment of Fletcher’s coverage under the SMP policy.
In January 1985, the Browders discovered that one of the buildings was cracking and sagging. After discovering cracking in another building in 1986, the Browders sued Fletcher for failure to construct the motel in a workmanlike manner. Fletcher filed for bankruptcy and the Browders filed a proof of claim that resulted in a stipulated judgment of $572,000. No assets exist in the bankrupt Fletcher estate to satisfy the judgment. No claim has been made against Fletcher or Browder that any injuries occurred as a result of the ownership, maintenance, or use of the motel.
As the owner of the property, Fletcher could not have brought an action against USF & G under the SMP policy. If the Browders sued as a subrogee, they would only acquire the rights of Fletcher. The SMP policy did not provide coverage to Fletcher for negligence in the construction of the building.
Accordingly, I would affirm the summary judgment entered in favor of USF & G.