American Employer's Ins. Co. v. Pinkard Const. Co.
| Decision Date | 02 August 1990 |
| Docket Number | D,No. 28-,No. 89CA0821,28-,89CA0821 |
| Citation | 806 P.2d 954 |
| Parties | AMERICAN EMPLOYER'S INSURANCE COMPANY, Plaintiff-Appellee, v. PINKARD CONSTRUCTION COMPANY, and Adams-Arapahoe Joint School Districtefendants-Appellants. . I |
| Court | Colorado Court of Appeals |
Weller, Friedrich, Ward & Andrew, Geoffrey S. Race, Debra K. Sutton, Denver, for plaintiff-appellee.
Holland & Hart, Wiley E. Mayne, Jr., Lynn Bolinske, Denver, for defendants-appellants.
Opinion by Judge PIERCE.
In this action involving progressive property damage, Pinkard Construction Company (Pinkard) and Adams-Arapahoe Joint School District No. 28-J appeal a declaratory judgment in favor of plaintiff, American Employers Insurance Company (American), construing the plaintiff's liability under a series of successive general liability insurance policies as limited to the policy in effect when the damage became manifest. We reverse.
The facts of this case are undisputed and involve the corrosion of a roof installed by Pinkard. The corrosion was a continuous, progressive condition which began immediately following the construction of the roof in 1973 and which was caused by the use of a certain fill material. By the time the portions of the roof collapsed in 1984 and the corrosion was discovered, the damage was widespread.
From 1977 until the date the roof collapsed, Pinkard was insured by American under a series of successive primary and umbrella comprehensive general liability insurance policies. American brought this declaratory action for a determination of its indemnity obligations under the policies. The district court ruled that American's obligation to indemnify Pinkard was limited to the terms of the policy in effect on the date the roof collapsed.
Pinkard contends that, because the corrosion was a progressive and continuous condition, coverage was triggered under each policy. We agree.
Since construction of the policies is a matter of law, this court is not bound by the trial court's interpretation. Colard v. American Family Mutual Insurance Co., 709 P.2d 11 (Colo.App.1985).
Generally, liability policies, by their language, fall into one of two classifications with respect to the event which will trigger coverage. An "occurrence" type policy provides coverage if an injury-causing occurrence takes place within the policy period, irrespective of when a claim therefore may be presented. Therefore, a "claims made" or "discovery" type policy provides coverage only if a claim is presented during the policy period. Annot., 37 A.L.R.4th 390 (1985).
All of the policies at issue here are "occurrence" type policies. Because all ambiguities in an insurance contract are to be construed against the insurer, the term "occurrence" is to be broadly construed in favor of the insured. Colard v. American Family Mutual Insurance Co., supra.
The pertinent clauses of all of the policies contain identical language. An "occurrence" is defined under the policies as "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." Thus, to be covered, property damage need not be the result of a sudden event, but can arise from a continuous process as long as the damage is unintended and unexpected and occurs during the policy period.
Property damage is defined under the policies to include "physical injury to or destruction of tangible property which occurs during the policy period." It is uncontested that the corrosion of the roof was a condition which unexpectedly and unintentionally caused continuous property damage from at least 1977 through 1984.
American relies on the following clause which appears in the policies as limiting its liability to the policy in effect at the time the corrosion manifested itself in the collapse of the roof:
"[P]roperty damage arising out of continuous or repeated exposure to substantially the same general condition shall be considered as arising out of one occurrence."
American argues that situation at issue constitute one...
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