Donnelly Bros. Construction Co., Inc. v. State Auto Prop. & Cas. Co., Minn. Ct. App. A08-0457 (January 26, 2009)
Though the technology may exist, it is uncommon to have sensors within the walls of buildings to determine the exact moment when there is water penetration or related damage.
Water intrusion in stucco and other home construction over the past 10 years or so has angered many home-owners, enriched many lawyers, and bedeviled many insurers. It is not uncommon for there to be a string of different insurance companies providing potential coverage over several years and insurers’ lawyers litigate over when the coverage triggering “occurrence” was (or occurences) and, thus, who should bear (1) the costs of defense, and or (2) the costs of coverage itself.
Donnelly Bros. is one of two cases specially released on 1/26/09 on the subject by the Minnesota Court of Appeals. The other was Tony Eiden C. v. Auto-Owners Ins. Co., A07-2222 (unpublished).
The decisions would not appear to lower the litigation cost of such claims or substantially clarify the question of whose insurance coverage period will be triggered. In Donnelly, for example, the Court of Appeals denied summary judgment for an insurer who had argued that the triggering event for damage claims preceded the policy period; rather, the Court of Appeals held that there was a factual question as to when the damage occurred and through what mechanism (i.e., stucco application, window installation, etc.).