23-2-4424 Air Master & Cooling, Inc. v. Selective Insurance Company of America, et al., N.J. Super. App. Div. (Sabatino, P.J.A.D.) (29 pp.) In this declaratory judgment action, the court addresses legal issues of property damage coverage under a Commercial General Liability (“CGL”) insurance policy. The coverage issues stem from lawsuits brought by a condominium association and unit owners to remediate construction defects within a residential building. The insured, an HVAC subcontractor, worked on the roof and elsewhere in the building. The defects concern the progressive infiltration of water within the building. After the contractor was named as a third-party defendant in the underlying construction defect cases, it sought a defense and indemnity from the insurers that had issued CGL policies to it over successive policy periods. The trial court granted summary judgment to Selective, one of those insurers, finding that the property damage had already manifested before its policy period commenced. In reversing summary judgment and remanding for further development of the record, the panel held: (1) a “continuous trigger” theory may be applied to third-party liability claims involving progressive damage to property caused by an insured’s allegedly defective construction work; and (2) the “last pull” of that trigger occurs when the essential nature and scope of the property damage first becomes known, or when one would have sufficient reason to know of it. The panel rejected the subcontractor’s novel argument that the last pull of the trigger does not occur until there is proof that “attributes” the property damage to faulty conduct by the insured. (Approved for Publication)

35-5-4440 Preserve II, Inc. v. Director, Div. of Taxation;Pulte Homes of NJ, L.P. v. Director, Div. of Taxation;Pulte Communities of NJ, L.P. v. Director, Div. of Taxation, Tax Ct. (Sundar, J.T.C.) (54 pp.) Held: Defendant correctly deemed that Preserve II, Inc., a foreign corporate limited partner, had nexus with New Jersey within the limits of the Constitution as required by the Corporation Business Tax (“CBT”) statute, and is thus liable for CBT for tax years 2005- 2007. For the same reason, defendant’s denial of the limited partner’s claim for refunds of CBT for those tax years was not unreasonable, arbitrary or capricious. Nor was its denial of the limited partner’s claim for preferential tax treatment as an investment company erroneous. As a consequence of these findings, the court negates defendant’s assessment against the two plaintiff partnerships, including the interest and penalties. The court also vacates defendant’s imposition of underpayment penalties for 2005 and 2006, and amnesty penalties for 2005-2007 as improper. (Approved for Publication)