In Lamar Homes, Inc. v. Mid-Continent Casualty Co., No 05-0832 (Tex. Aug. 31, 2007), claimant DiMare purchased a house from insured general contractor Lamar. Several years later, DiMare sued Lamar and Lamar’s subcontractors for negligent construction of the foundation of the house resulting in cracking of the house’s sheetrock and stone veneer. After its CGL insurer, Mid-Continent, denied a defense. Lamar filed suit against Mid-Continent. The federal district trial court entered summary judgment for Mid-Continent, finding no duty to defend. Lamar appealed to the Fifth Circuit which certified questions to the Texas Supreme Court. The court responded that the DiMare complaint did give rise to duty to defend, hold ng in turn that (1) defective construction resulting from a general contractor’s negligence, being neither intended nor expected, constitutes an “occurrence,” (2) physical injury to the house itself constitutes “property damage,” and (3) the subcontractor work exception to exclusion l. for “property damage” to Lamar’s completed work applied.
Texas “property damage” caused by an “occurrence,” and the subcontractor’s work exception to exclusion l.
