AIR MASTER & COOLING, INC. VS. SELECTIVE INSURANCE COMPANY OF AMERICA, ET AL.
A-5415-15T3
In this declaratory judgment action, the court addresses legal issues of property damage coverage under a Commercial General Liability ("CGL") insurance policy. The coverage issues stem from lawsuits brought by a condominium association and unit owners to remediate construction defects within a residential building. The insured, an HVAC subcontractor, worked on the roof and elsewhere in the building. The defects concern the progressive infiltration of water within the building.
After the contractor was named as a third-party defendant in the underlying construction defect cases, it sought a defense and indemnity from the insurers that had issued CGL policies to it over successive policy periods. The trial court granted summary judgment to Selective, one of those insurers, finding that the property damage had already manifested before its policy period commenced.
In reversing summary judgment and remanding for further development of the record, the panel held: (1) a "continuous trigger" theory may be applied to third-party liability claims involving progressive damage to property caused by an insured's allegedly defective construction work; and (2) the "last pull" of that trigger occurs when the essential nature and scope of the property damage first becomes known, or when one would have sufficient reason to know of it.
The panel rejected the subcontractor's novel argument that the last pull of the trigger does not occur until there is proof that "attributes" the property damage to faulty conduct by the insured.
