The Eleventh Circuit affirmed the district court’s grant of summary judgment to the insurer on the general contractor’s claims for damages due to faulty workmanship. Tricon Dev. of Brevard v. Nautilus Ins. Co., 2021 U.S. App. LEXIS 27317 (11th Cir. Sept .10, 2021).
Tricon was the general contractor for a condominium project in Florida. Tricon hired a subcontractor to fabricate and install metal railings for the project. The subcontractor was insured by Nautilus under two CGL policies. The policies had endorsements to add Tricon as an additional insured.
The subcontractor fabricated some of the railings, but they had defects and damage. Further they were not installed properly and did not meet the project’s specifications. Tricon found another manufacturer to fabricate new railings to satisfy the projects’ requirements. Tricon agreed to pay the cost of removing the subcontractor’s railings and fabricating and installing new ones. If submitted a claim to Nautilus to cover these costs.
Nautilus denied the claim. Tricon sued and the district court granted summary judgment to Nautilus.
On appeal, the Eleventh Circuit noted that the policies at issue were post-1986 standard form CGL policies with products-completed operations hazard coverage governed by Florida law. Such policies did not cover the costs of replacing defective products.
Applying Florida law, there was no coverage if there was no damage beyond the faulty workmanship, i.e., unless the faulty workmanship damaged some otherwise non-defective component of the project. Further, under Florida precedent, if a subcontractor was hired to install a project component and, by virtue of his faulty workmanship, installed a defective component, then the cost to repair and replace the defective component was not “property damage.”
Here, Tricon alleged that the subcontractor’s railings were deficient due to having defects and damage, not being installed properly, and not satisfying the project’s specification. Tricon did not allege that the subcontractor’s faulty workmanship damaged otherwise non-defective components of the project. Thus, the costs that Tricon incurred in removing the subcontractor’s railings and the fabrication and installation of new railings did not constitute “property damage” under the policies.