Yesterday we erroneously reported that the Court released all of its April Term opinions. This morning, the Court will release one additional April Term opinion, which should be the last opinion of this term. Details on the case are below and we will update when the opinion is released.
S13Q0462 Taylor Morrison Services, Inc., f/k/a Morrison Homes, Inc. v. HDI-Gerling America Insurance Co.
This case focuses on whether property damage at issue in a California class action lawsuit was covered by Morrison’s CGL policy from Gerling. The class action began when property owners sued Morrison, alleging that the homes built by Morrison were improperly constructed because of a failure to include sufficient gravel under the foundations of the homes. The homeowners alleged they suffered property damage to the houses including water intrusion, cracked concrete slabs, and broken floors. After initially defending Morrison in the case, Gerling brought this action in 2009, seeking a declaratory judgment that it had no obligation to defend Morrison for the claims in the class action litigation. The U.S. District Court for the Northern District of Georgia granted summary judgment to Gerling, finding that the class action claims were not based on an “occurrence” as defined in the policy. Morrison appealed.
The U.S. Court of Appeals for the Eleventh Circuit reviewed the law and could find no controlling Georgia authority on the proper definition of “occurrence” under Georgia law. The court particularly focused on whether there was occurrence if the faulty workmanship only causes damage to itself (i.e., the houses at issue) without damaging any other property.
On November 19, 2012, the Eleventh Circuit certified the following questions to the Supreme Court of Georgia:
- Whether, for an “occurrence” to exist under a standard CGL policy, Georgia law requires there to be damage to “other property,” that is, property other than the insured’s completed work itself.
- If the answer to Question One (1) is in the negative, whether, for an “occurrence” to exist under a standard CGL policy, Georgia law requires that the claims being defended not be for breach of contract, fraud, or breach of warranty from the failure to disclose material information.
The case was heard on March 4, 2013.