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As a threshold matter, consequential damages that resulted from a subcontractor’s defective work constituted “property damage” and an “occurrence,” an insurer was not precluded from arguing against coverage based upon other exclusions within a policy.

January 15, 2016
Cypress Point Condo. Ass’n, Inc. v. Adria Towers, L.L.C., 441 N.J. Super. 369 (App. Div. 2015)

Adria Towers served as general contractor during the construction performed at the Cypress Point Condominiums. Defective work performed by Adria Towers’ subcontractors resulted in both defective-work and consequential damages claims. The trial judge erred when he summarily dismissed the plaintiff’s claims on the grounds that there was neither “property damage” nor an “occurrence” per the policy.

The Appellate Court distinguished Cypress Point from earlier cases that relied not upon the 1986 Insurance Services Office, Inc.’s form, but an earlier iteration (Weedo v. Ston-E-Brick, Inc., 81 N.J 233 (1979) and Firemen’s Ins. Co. of Newark v. Nat’l Union Fire Ins. Co., 387 N.J. Super. (App. Div. 2006)) when it determined that a subcontractor’s defective work constituted both “property damage” and an “occurrence.” The court noted that, while as a threshold matter, consequential damages to common areas and unit owners’ property in condo complex that resulted from subcontractor’s defective work constituted both “property damage” and “occurrence” pursuant to plain meaning interpretation of terms defined in ISO’s 1986 standard CGL form.

Case Law Alerts, 1st Quarter, January 2016

Case Law Alerts is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2016 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.

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