Montana “occurrence” and “property damage”

In King v. State Farm Fire & Casualty Co., No. CR 09-96-M-DWM (D. Mont. May 18, 2010), the Kings purchased a log home kit from the insured. After receiving the kit, the Kings sued the insured alleging the kit did not meet the contract specifications in that the logs were of the wrong species and size as well as other defects. The Kings obtained a judgment against the insured, took an assignment of policy rights, and sued State Farm. The federal district trial court entered summary judgment for State Farm on the breach of contract claim, holding (1) because the condition of the logs was not an accident, there was no “occurrence,” and (2) because the logs were not physically injured, there was no “property damage.”