Indiana “occurrence.”

In Sheehan Construction Co. v. Continental Cas. Co., No. 49S02-1001-CV-32 (Ind. Sept. 30, 2010), claimant Alig purchased a house built by insured general contractor Sheehan using subcontractors.  After completion, Alig sued Sheehan alleging that defective construction resulted in moisture intrusion property damage to the house.   Sheehan’s CGL insurer, Continental, defended under a reservation of rights.  Additional homeowners joined the suit which was converted to a class action.  The suit settled with an agreement that the claimants would pursue the settlement amount against Continental.  Continental filed suit seeking a judicial declaration of no duty to indemnify Sheehan.   The trial court, finding no “property damage” caused by an “occurrence,” entered summary judgment for Continental.   The intermediate appellate court affirmed.  The Supreme Court of Indiana, in a 3-2 decision, reversed, holding that unintentional defective workmanship constitutes an “occurrence.”  The court based its holding on the common law definition of accident and its implicit “lack of intentionality.”   It cites to the subcontractor work exception to the “your work” exclusion l. as additional support.     The court remanded to the trial court for a determination as to whether the defective workmanship was intentional or unintentional.