Texas trigger and exclusion l.

In VRV Development L.P. v. Mid-Continent Cas. Co., No. 10-10123 (5^th Cir. Jan. 7, 2011), claimant Goodman hired insured VRV to develop residential lots.  VRV in turn hired subcontractors to design and construct retaining walls on the lots.  After completion, Goodman’s successor, the local municipality, and several homeowners sued VRV for negligence and breach of contract and warranties, seeking damages for property damage to the lots and a public easement when the retaining walls first developed cracks and subsequently collapsed following heavy rains.   VRV’s CGL insurer, Mid-Continent, denied a defense and VRV filed suit.  The federal district trial court entered summary judgment for Mid-Continent.  On appeal, the U.S. Court of Appeals for the Fifth Circuit, affirmed on different grounds.  Applying Texas law, the court held that the underlying complaint did not give rise to a duty to defend.  Specifically, the damages to the retaining wall fell within exclusion l. for property damage to VRV’s completed work.   Significantly, the Mid-Continent policy had been endorsed to remove the subcontractor work exception to exclusion l.   The court then held that, while the alleged time period that the retaining walls developed cracks fell within the Mid-Continent policy period, because the collapse was alleged to have occurred after the policy expired, the property damage resulting from the collapse did not occur during the policy period.   The policy expressly provided that any property damage that occurs after the policy ends that is a “continuation, change or resumption” of property damage that occurred during the policy period shall be deemed to have occurred during the policy period.  However, the court held that, because (1) the collapse was the immediate cause of the resulting property damage , and (2) the only property damage that occurred during the policy period was excluded, there was no “continuation, change or resumption.”