By: Herling D. Romero Adrianza
On August 14, 2024, the Massachusetts Appeals Court in Lessard v. R.C. Havens & Sons, Inc. (“Lessard”) affirmed a trial court’s order allowing an insurer’s motion for summary judgment and finding that an insurer has no duty to indemnify its insured where the plaintiff in a construction defect case failed to distinguish property damage covered by insurance from other uninsured construction defect damages.
In Lessard, the plaintiff homeowners hired the defendant general contractor to construct a single-family home in Marblehead. As the project neared completion, the homeowners discovered substantial issues with the quality of construction. Some problems compromised the structural integrity of the home, including a missing structural post, and incorrectly installed partition walls, sill plates, and support beams. This resulted in some of the partition walls improperly bearing weight.
The homeowners’ expert established that correcting the structural problems would require extensive work, including installing a missing post, doubling up the floor joists under the partition walls, and jacking up the floors. Separate from the structural issues, counter flashing was missing on the roof deck’s posts, the home’s siding was improperly installed, and there were several problems with the home’s metal roof.
Following trial, the jury awarded the homeowners damages for structural defects, the roof deck, for the siding, the metal roof, issues with the home’s insulation, mold damage, loss of use of their home, and costs incurred in investigating the defects.
The general contractor’s insurer moved for summary judgment following trial on whether it had a duty to indemnify its insured by, in this case, paying for the homeowners’ damages. The insured argued it did not because the homeowners’ losses did not constitute “property damage” under the general liability policy. The general liability policy defined property damage as “[p]hysical injury to tangible property, including all resulting loss of use of that property” or “[l]oss of use of tangible property that is not physically injured.”
The Appeals court found that the insurer had no duty to indemnify its insured because the homeowners did not establish what portion of their damages award was for property damage covered by the policy. Instead, the homeowners established the general costs to repair or replace defective work, without distinguishing the uninsured general costs to repair defective work from the costs specifically incurred to repair property damage covered by the general contractor’s insurance.
Lessard teaches plaintiffs the importance of knowing what the applicable commercial general liability policy covers – and what it does not – and ensuring that the evidence at trial clearly delineates and expressly lists in the verdict slip the insured damages covered by the policy from general, uninsured, costs to repair the general contractor’s improper work. Otherwise, plaintiffs could successfully obtain a judgment at trial against an insolvent contractor without the ability to recover from its insurer.
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