Comments On Multiple Occurrences
Set forth below are summaries of California cases finding multiple occurrences in the context of constructive defect related claims. Such cases suggest that carriers need to carefully analyze the number of occurrences presented by construction defect claims.
In Vanderberghe v. AMCO Ins. Co. (N.D. Cal. 1992) 1992 U.S. Dist. LEXIS 10760, the court held that the insured's ("Mata") defective plumbing system for a large apartment project involved more than one occurrence. In its evaluation of the issue the court stated:
[…] Mata's negligent workmanship comprised a variety of different negligent acts, not a single act. In addition, the different acts were not consistently performed or omitted on all the apartment units or buildings. For example, the parties have stipulated that in some cases pipes were excessively soldered and in some cases not soldered at all.
Id. at p. *14.
[T]his court cannot find that an activity as multifaceted as the negligent construction of an entire plumbing system constituted one occurrence.
Id., at p. *17.
Vanderberghe supports that separate aspects of the same work, such as plumbing, can result in more than one "occurrence."
In Ins. Co. of North America v. National American Ins. Co. of North America (1995) 37 Cal.App.4th 195, 204-206 ("INA v. NAICC"), NAICC argued that its insured's roofing work on a single condominium project per a single subcontract resulted in a single occurrence in order to limit its exposure to a single policy. The Court of Appeal rejected this argument because the condominium project was comprised of nine phases with the work occurring over separate periods of time. The court placed emphasis on the periods of time in which the phases were constructed, with the first three phases occurring during the initial NAICC policy, the second three phases during the second NAICC policy, and the last three phases after NAICC's coverage had expired. Id. at p. 204.
In Landmark American Ins. Co. v. Liberty Surplus Ins. Corp. (C.D. Cal. 2014) 2014 U.S. Dist. LEXIS 190535, the insured, Vision Systems, performed work at a casino, perform certain work at the Coral Casino, including (a) installation of steel sliding glass doors and window systems on the first and second floors, and (b) installation of glass handrails along the second and third floor balconies. Id. at p. *2. Each aspect of Visions Systems' work allegedly resulted in water intrusion. Id. at p. *13. The court considered each aspect of Vision Systems' work to be "fully distinct installation defects," (Id. at pp. 14-15), and ruled:
Under California law, the fact that the damage resulted from two distinct causes means that there were two "occurrences" within the meaning of the Landmark Policy and the Liberty Policy.
Id. at p. *17.
In St. Paul Fire & Marine Ins. Co. v. Ins. Co. of The State of Penn. (N.D. Cal. 2017) 2017 U.S. Dist. LEXIS 32551 ("St. Paul v. ISOP"), the court evaluated the work of Brady Company/Central California, Inc. ("Brady"), which performed work on student housing dormitories at the University of California Santa Cruz campus. Among other things, Brady installed green board at all tub and shower areas as part of the interior wail installation and stucco as part of the exterior wall construction. Id., at p. *8. There was water intrusion resulting from both the interior and exterior work, which the court considered to be two different types of work (Id., at pp. "69-*70), and thus, separate occurrences. In reaching this conclusion the court rejected Travelers' and Zurich's contention that "negligent supervision" caused the damage from Brady's work. Id., at pp. *72-*73.