The Missouri Court of Appeals in View Homeowners Association v. Burlington Insurance Co., 2018 WL 2011748 (Mo. App. W.D. May 1, 2018) recently held that faulty workmanship performed on a renovation project did not constitute a policy-defined “occurrence” in a situation where the developer had control and management over the project, as well as having the ability to resolve construction deficiencies and correct substandard work during the project.
The Court of Appeals found that under Missouri law, the term “accident” was an event that took place without a person’s foresight or expectation, and was undersigned, sudden, and unexpected. Citing American State’s Insurance Co. v. Mathis, 974 S.W.2nd 647, 648 (Mo. App. E.D. 1998). Turning to the facts before it, the court noted that the insured had failed to remedy various construction defects during the project, and therefore there was no occurrence. The court focused on the degree of control and management that the insured developer had, as the owner, over the property during the renovation. Because the insured had the ability to resolve any alleged construction deficiencies in the property, as well as remediate substandard work, the court found that the insured’s failure to address the construction deficiencies and substandard work could not be described as an “undersigned or unexpected event.” Secondarily, the court observed that a contrary holding would convert the policy into a performance bond or warranty on the quality of the insured’s work and thereby extend coverage beyond generally accepted parameters of commercial CGL policies.