Oct. 10, 2017 (Date Decided)
FOR APPELLANT: Sharon K. Galpern (Stahl & DeLaurentis, PC, attorneys; Ms. Galpern, on the briefs).
FOR RESPONDENT: Todd J. Leon (Hill Wallack, LLP, attorneys; Mr. Leon, of counsel and on the brief; Victoria J. Airgood, on the brief).
Plaintiff appealed from the grant of summary judgment in favor of defendant in plaintiff’s declaratory judgment action. Plaintiff was hired to perform work on a condominium building. Construction defects resulted in property damage from progressive water infiltration. Plaintiff, named as a third-party defendant in the underlying construction defect cases, sought defense and indemnification from defendant, one of a series of insurers that had issued commercial general liability policies to plaintiff over successive policy periods.
The trial court granted defendant summary judgment on plaintiff’s declaratory judgment action, ruling that the property damage to the condo building had manifested before defendant’s policy commenced. On appeal, plaintiff raised several legal theories that were either completely novel or had not been definitively addressed under New Jersey law. Specifically, plaintiff argued that the court should recognize “continuous trigger” principles for third-party liability in construction defect cases involving progressive property damage, and that that such liability should attach to all policies in effect from the time of the insured’s work to when it became known or should have become known the damage was attributable to the insured’s work.
The court first agreed with plaintiff and adopted the “continuous trigger” theory of insurance coverage with respect to third-party liability claims involving progressive property damage from defective construction work, analogizing such claims to progressive personal injury claims where the theory had been adopted. The court further ruled that the “last pull” of the trigger, which determined the temporal end-point for a covered occurrence, occurred when the nature and scope of property damage first became known or when the involved parties would have sufficient reason to know of the damage. The court rejected plaintiff’s novel argument that the “last pull” of the trigger only occurred when there was proof that attributed property damage to conduct by the insured, finding that determining attribution would be an expensive and time-consuming undertaking that would be triggered in most cases where an insured demanded defense and indemnification.
However, the court vacated the trial court’s grant of summary judgment, and remanded for reconsideration of the coverage issue. The court concluded that the factual record developed below was insufficient to determine when the nature and scope of the water infiltration was sufficiently known, or should have reasonably been known, as to both individual condo unit as well as the building roof.