Hawaii “property damage” caused by an “occurrence”

In Group Builders, Inc. v. Admiral Ins. Co., No. 29402 (Haw. Ct. App. May 19, 2010), Hilton hired Hawaiian Dredging to serve as general contractor for the construction of a hotel. Hawaiian Dredging in turn hired Group to serve as subcontractor for the EIFS system and other components. Following completion, mold was discovered in the guest rooms. Hilton sued Group and other for defective construction. Admiral, Group’s CGL insurer during construction, denied a defense. Several of Group’s post-Admiral CGL insurers settled the Hilton claim. Tradewinds, one of these insurers, took an assignment from Group of Group’s claim against Admiral, and filed suit against Admiral. The trial court entered summary judgment for Admiral. On appeal, the intermediate appellate court affirmed, holding that, while the mold damage and resulting loss of use of the hotel constituted “property damage,” breach of contract and related tort theory construction defect claims do not constitute an “occurrence.”