Florida District Court Decision on "Your Work"
Exclusion in CGL Policy Is At Odds With Law of Numerous
Article Courtesy of The Property Insurance Coverage Law Blog
September 27, 2016
In Essex Insurance Co. v. DiMucci Development Corp.
of Ponce Inlet Inc., U.S. District Judge Roy B. Dalton Jr. recently held
that Evanston Insurance Company has no duty to defend a builder in a
lawsuit alleging construction defects at one of its Florida condominium
complexes based on an exclusion in the policy for damage to the
developer’s own work.
The lawsuit arose when DiMucci Development Corp. of Ponce Inlet Inc. (“DiMucci”)
was sued by the homeowners' association at the Towers Grande high-rise
in Daytona Beach Shores, Florida, for various construction defect
The construction defect lawsuit alleged that DiMucci ‘s work was
defective on a portion of the high rise condominium complex and that the
defective work caused property damage to other portions of the building
that DiMucci also had constructed. More specifically, the Towers Grande
Condominium Association alleged that DiMucci‘s defective work resulted
in damage to the roof and HVAC systems, as well as multiple water
intrusion issues purportedly tied to poor waterproofing.
DiMucci had held three consecutive CGL policies with Evanston
predecessor Essex Insurance Company between 2003 and 2005. During that
time, DiMucci constructed Towers Grande, a 132-unit condominium
building, with subcontractor Wayne's Roofing and Sheet Metal handling
the roofing work.
After DiMucci tendered a claim for defense and indemnity to its general
liability insurance company (Evanston), Evanston filed suit in Florida
federal court in September 2014, seeking a ruling that its policy
excluded coverage and therefore it had no obligation to defend or
After the parties filed cross motions for summary judgment, the trial
court ruled that the so-called "your work" exclusion in DiMucci's CGL
policy with Evanston precluded coverage because the underlying
construction defect complaint only alleged damage to the builder's own
work. The court found that the Your Work exclusion barred coverage, and
that Evanston had no duty to defend or indemnify DiMucci.
This decision is notable because it takes the interesting position that
because DiMucci constructed the entire high-rise—even though the
defective construction caused damage to other parts of the high-rise—the
exclusion applied not only to the portions of the high-rise where the
defective work appeared, but even to the consequential damage to other
parts of the high-rise caused by the defective construction work.
This decision is at odds with the law of numerous jurisdictions
including (1) California (see Blackfield v. Underwriters at Lloyd's,
London, 245 Cal. App. 2d 271, 273, 276 (1st Dist. 1966) - where
defective construction is at issue, the “your work” exclusion only
applies to the defective work itself, not the consequential damage
caused by the defective work. [insured builder of tract home constructed
home with defective fill/foundation; this caused the remainder of the
house to suffer cracking, slanting, windows and doors could not be
opened. Coverage for damages to the “other parts” of the house covered,
i.e., not excluded]) (2) New Jersey (see Cypress Point Condominium
Assoc. Inc. v. Adria Towers, 226 N.J. 403 (N.J. August 4, 2016), and
even (3) Florida (United States Fire Insurance Co. v. J.S.U.B., Inc.,
979 So.2d 871 (Fla.2007), and Auto–Owners Insurance Co. v. Pozzi Window
Co., 984 So.2d 1241 (Fla.2008) both hold that faulty workmanship or
defective work that has damaged the otherwise non defective completed
project has caused ‘physical injury to tangible property’ within the
plain meaning of the definition in the policy)) to name a few.
Policyholder advocates need to be aware of the authority interpreting
and applying the so called “work product” exclusions as well as the fact
that numerous jurisdictions permit coverage for consequential damage
caused by defective workmanship even when coverage for the defective
workmanship itself might otherwise be excluded.