AMERICAN STATES INSURANCE COMPANY, APPELLANT,
v.
PAUL VILLEGAS, APPELLEE
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An insurance company appeals from a trial court's determination that its manufacturers' and contractors' liability policy covered damages from a defective home addition. The court reverses and remands, applying newly-established precedent that such policies do not cover replacement costs for defective work, though they may cover damage to the original structure.
The policy does not cover the replacement and repair costs of the defective work itself, as comprehensive liability insurance is designed to protect against property damage caused by a completed product, not for replacement of that product. However, property damage to the original structure caused by the defective addition may be covered and requires determination on remand.
[1] A comprehensive liability insurance policy for a general contractor is intended to cover damage caused by the completed product, not the cost of replacing or repairing de…
[2] An "all risks" or "comprehensive general liability" policy does not cover the cost of repairing or replacing the insured's own defective work or materials.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“the purpose of this comprehensive liability insurance coverage is to provide protection for personal injury or for property damage caused by the completed product, but not for the replacement and repair of that product”
Establishes the controlling legal principle from La-Marche that defines the scope of coverage under manufacturers' and contractors' liability policies
Previewing 1 of 2 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceAmerican States Insurance Company issued a manufacturers' and contractors' liability policy to Singleton, a general contractor. Villegas hired Singlet…
The full statement of facts, procedural history, and disposition for this case are member content.
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SHARP, Judge.
American States Insurance Company appeals from the trial court’s determination that its policy provided coverage for the incident involved in this case, and the final judgment of damages imposed as a result of that determination. We reverse.
The appellant issued to Singleton, a general contractor, a “Manufacturers’ and Contractors’ Liability Insurance Coverage” policy. The policy contained Exclusions (a) and (o):
This Insurance does not apply:
(a) to liability assumed by the insured under any contract or agreement except an incidental contract; but with respect to bodily injury or property damage occurring while work performed by the named insured is in progress, this exclu sion does not apply to a warranty that such work will be done in a workmanlike manner;
(o) to property damage to work performed by or on behalf of the named insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith; ....
The appellee, Villegas, argued that this policy should cover the damages he suffered when an addition to his home, which was improperly constructed by Singleton, had to be torn down and replaced.
The trial judge found coverage for all of appellee’s damages under this policy, relying upon Fontainebleau Hotel Corp. v. United Filigree Corp., 298 So. 2d 455 (Fla. 3d DCA 1974). Since the trial, our Supreme Court disapproved Fontainebleau in La-Marche v. Shelby Insurance Company, 390 So. 2d 325 (Fla.1980). It held that a general contractor’s comprehensive liability policy, such as the one involved in this case, does not cover the cost of replacing or repairing defective materials and workmanship:
... the purpose of this comprehensive liability insurance coverage is to provide protection for personal injury or for property damage caused by the completed product, but not for the replacement and repair of that product.
Id. at 326.
However, pursuant to LaMarehe, property damage to appellee’s original structure caused by Singleton’s addition may be covered under the comprehensive policy. This item of damage was not separately determined at the trial because the LaMarehe case had not then been published. We reverse the judgment and remand this case to the trial court for the purposes of making that determination and entering a judgment for appellee, if appropriate. Shelby Mutual Insurance Company v. LaMarche, 371 So. 2d 198 (Fla. 2d DCA 1979), aff’d., 390 So. 2d 325 (Fla.1980).
REVERSED and REMANDED.
DAUKSCH, C. J., and COWART, J., concur.
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Tucker Constr. Co. v. Mich. Mut. Ins. Co., 423 So. 2d 525 (Fla. 5th DCA 1982)…ystem installed by contractor failed after contractor’s insurance [including premises-operations coverage and completed operations coverage] expired, insurance company was not liable for the loss). . See, e.g., American States Ins. Co. v. Villegas, 394 So. 2d 222 (Fla. 5th DCA 1981); Shelby Mut. Ins. Co. v. LaMarche, 371 So. 2d 198 (Fla. 2d DCA 1979), aff'd, 390 So. 2d 325 (Fla.1980). Cf., C.A. Fielland, Inc. v. Fidelity and Casualty Co. of New York, 297 So. 2d 122 (Fla. 2d DCA [*528] 1974), cert. denied, 30…
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Centex Homes Corp. v. Prestressed Sys., Inc., 444 So. 2d 66 (Fla. 3d DCA 1984)…, 429 So. 2d 779 (Fla. 3d DCA 1983); Tucker Construction Co. v. Michigan Mutual Insurance Co., 423 So. 2d 525 (Fla. 5th DCA 1982); Old Republic Insurance Co. v. Sheridan, 407 So. 2d 619 (Fla. 4th DCA 1981); American States Insurance Co. v. Villegas, 394 So. 2d 222 (Fla. 5th DCA 1981). The policy reasons for this result are obvious. If insurance proceeds could be used to pay for the repairing and/or replacing of poorly constructed products, a contractor or subcontractor could receive initial payment for its wo…
Authorities Cited
- LaMARCHE v. The Shelby Mut. Ins. Co. & Clearwater Prestige Homes, Inc., 390 So. 2d 325 (Fla. 1980)
- Fontainebleau Hotel Corp. v. United Filigree Corp., 298 So. 2d 455 (Fla. 3d DCA 1974)
- The Shelby Mut. Ins. Co. v. LaMARCHE, 371 So. 2d 198 (Fla. 2d DCA 1979)