Ohio “property damage” caused by an “occurrence,” and “your work” exclusion

In Fortney & Weygandt, Inc. v. American Manufacturers Mut. Ins. Co., No. 05-4031 (6th Cir. Feb 12, 2010), the insured general contractor was hired to build a restaurant. Prior to completion, shifting foundation soil damaged the building’s underground utility lines, requiring demolition and reconstruction. The CGL insurer denied a defense to the resulting lawsuits. The insured filed a declaratory judgment action. The trial court granted the insurer’s motion for judgment on the pleadings, holding that, while construction of the restaurant’s foundation constitutes “property damage” caused by an “occurrence”, coverage is barred by exclusion j.(6) for damage to that particular part of any property that must be restored, repaired or replaced because “your work” was incorrectly performed on it. On appeal, the Sixth Circuit reversed. The only issue was application of j.(6).  Applying Ohio law, following the Fifth Circuit’s decision in Mid-Continent Casualty Co. v. JHP Development, Inc., 557 F.3d 207 (5th Cir. 2009) which applied Texas law, the court held that the phrase “that particular part” limited application of the exclusion to the defective component, here the defective foundation.