Kentucky “occurrence”

In Cincinnati Ins. Co. v. Motorists Mut. Ins. Co., 306 S.W.3d 69  (Ky. 2010), Elite Homes built a home for the Mintmans.  Five years after completion, the Mintmans sued Elite for construction defects.  Motorists, Elites’ CGL insurer during the period of construction, defended Elite, settled the suit, and, with an assignment from Elite, sued Cincinnati which was Elite’s CGL insurer after Motorists.  The trial court granted summary judgment for Cincinnati, holding the damages sought by the Mintmans were not because of “property damage” caused by an “occurrence.”  The intermediate appellate court reversed, holding that, because the property damage was not intentional, it was caused by an “occurrence.”  The Kentucky Supreme Court reversed and remanded, holding no duty to defend or indemnify.  Adopting what it characterizes as the majority rule, the court held that “this claim of faulty workmanship is not an ‘occurrence’.”  The court expressly does not address the no “property damage” argument.  Fn 4.  The court distinguishes Bituminous as “not a faulty construction case.”  “The quick destruction of a residence is manifestly a completely different undertaking than the protracted improper construction of a residence.”  The court does not address the subcontractor work exception argument.  The court acknowledges, but does not decide, that damage to property other than the insured’s work may be covered.