Patriot Insurance Company v. Holmes Carpet Center, LLC et al
///ORDER granting 21 Motion for Summary Judgment. The clerk is directed to enter judgment accordingly and close the case. So Ordered by Judge Paul J. Barbadoro.(vln)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Patriot Insurance Company
Case No. 17-cv-73-PB
Opinion No. 2017 DNH 229
Holmes Carpet Center, LLC, et al.
MEMORANDUM AND ORDER
This declaratory judgment action concerns a commercial
general liability insurance policy issued by Patriot Insurance
Company (“Patriot”) to Holmes Carpet Center, LLC (the “Carpet
Patriot seeks a determination that it has no duty to
defend or indemnify the Carpet Center in an underlying action
asserting claims for breach of contract and violation of New
Hampshire’s Consumer Protection Act because the action seeks
damages only for uncovered defective workmanship.
The matter is
before me on Patriot’s motion for summary judgment.
The Insurance Policy
The insurance policy at issue in this case provides in
pertinent part that Patriot “will pay those sums that the
insured becomes legally obligated to pay as damages because of
‘bodily injury’ or ‘property damage’ to which this insurance
Doc. No. 12-2 at 115, § I(1)(a).
The policy goes on
to explain that coverage is available only if the “bodily
injury” or “property damage” is caused by an “occurrence.”
id. at 115, § I(1)(b)(1).
An “occurrence,” in turn, is defined
as “an accident, including continuous or repeated exposure to
substantially the same general harmful conditions.”
3 at 8, § V(13).
Doc No. 12-
“Property damage” is further defined as
“[p]hysical injury to tangible property, including all resulting
in loss of use of that property” or “[l]oss of use of tangible
property that is not physically injured.”
See id. at 9, §
The Underlying Action
1. Underlying Complaint
Patriot seeks a declaratory judgment that it has no duty to
defend or indemnify the Carpet Center in a suit filed against it
by Red Oak Apartments, LLC (“Red Oak”), in Hillsborough County
See Complaint, Red Oak Apartments, LLC v.
Holmes Carpet Center, LLC, et al., No. 216-2015-CV-00807 (N.H.
Super. Ct. Nov. 11, 2016); see also Doc. No. 12-1 (copy of state
Patriot named Peter Holmes as an additional defendant because
Red Oak sued both the Carpet Center and Holmes. Red Oak,
however, has since abandoned its claims against Holmes. Thus, I
focus my analysis on the Carpet Center’s right to a defense and
indemnification. To the extent that Holmes intends to press his
own claim for coverage, his claim suffers from the same
deficiencies that doom the Carpet Center’s coverage claim.
The complaint in the underlying action
alleges that Red Oak, which owns and manages several rental
properties, hired the Carpet Center to install Versalic vinyl
plank flooring in approximately 195 of its apartment units.
Doc. No. 12-1 at 2.
Red Oak purportedly paid the Carpet Center
more than $272,000 for materials and labor in connection with
the flooring installation.
Shortly after the Carpet
Center completed its work, flooring planks in several units
began to shift and slide out of place, creating large gaps
between the planks.
Id. at 2-3.
Red Oak notified the Carpet
Center of the issue and it subsequently performed repair work in
some of the units.
Id. at 3.
Red Oak, however, was ultimately
dissatisfied with the Carpet Center’s remedial efforts, and sued
for breach of contract and violation of the New Hampshire
Consumer Protection Act, N.H. R.S.A. Chapter 358-A.
See id. at
The underlying complaint alleges that the Carpet Center
“failed to complete the contract work in a workmanlike manner in
accordance with accepted flooring installation practices . . .
[and] failed, refused, and neglected to repair the flooring in a
good and workmanlike manner.”
Id. at 4.
The complaint further
alleges that the Carpet Center “deceptively misrepresented the
quality and character of [its] services” in connection with the
flooring installation, in violation of Chapter 358-A.
Id. at 4-
As a result, Red Oak claims it suffered unspecified damages.
Upon receiving the complaint, the Carpet Center submitted
an insurance claim to Patriot requesting a defense and
Doc. No. 12 at 3.
Patriot, in turn, commenced
the instant declaratory judgment action.
2. Anticipated Damage to Apartment Units, Due to Removal
As part of its supplemental briefing in this case, the
Carpet Center produced correspondence from Red Oak’s counsel and
its retained expert “indicating that property damage is an
aspect of the underlying claim.”
Doc. No. 24 at 2.
expert identified specific areas in the apartment units that he
anticipates will be damaged during the removal of the vinyl
flooring and its attendant components.
See Doc. No. 24-3.
According to the expert, Red Oak should “expect door jambs,
baseboards and any vertical surface between the moldings to be
scrapped, scratched and marred” during the removal process.
Such damage will apparently require spackling, sanding, and
painting to repair.
require similar repairs.
Expected damage to drywall will
He further opined that, in
most cases, moldings will likely be “fractured, broken and
damaged beyond repair; requiring full replacement, priming and
STANDARD OF REVIEW
This case concerns both Patriot’s duty to defend and its
duty to indemnify.
The duty to defend is broader than the duty
whereas the duty to indemnify arises only when
the insured is actually liable, the duty to defend turns on the
nature of the allegations against the insured.
See Great Am.
Dining, Inc. v. Phila. Indem. Ins. Co., 164 N.H. 612, 627
The starting point in determining whether an insurer has a
duty to defend is the policy itself.
The court must first
construe the relevant policy language and resolve all ambiguous
terminology in favor of coverage.
F.3d 83, 86 (1st Cir. 2011).
Hunt v. Golden Rule Ins., 638
Then, the court will review the
pleadings in the underlying action to determine whether they can
be reasonably construed to assert a covered claim.
Mut. Ins. Co., 168 N.H. 754, 759 (2016).
Todd v. Vt.
“In cases of doubt as
to whether the complaint against the insured alleges a liability
of the insurer under the policy, the doubt must be resolved in
the insured’s favor.”
In evaluating Patriot’s summary judgment motion, I look
both to Red Oak’s complaint and the additional information the
Carpet Center has obtained from Red Oak that further describes
I will grant Patriot’s motion for summary judgment
only if the record unambiguously establishes that the Carpet
Center has no right to a defense.
Patriot argues that it does not have a duty to defend the
Carpet Center against Red Oak’s claims because Red Oak is
seeking damages for uncovered defective workmanship rather than
damages caused by an “occurrence.”
The New Hampshire Supreme Court has explained that
“defective work, standing alone, does not constitute an
Concord Gen. Mut. Ins. Co. v. Green & Co. Bldg. &
Dev. Corp., 160 N.H. 690, 693 (2010).
This is because an
occurrence must be an “accident” and “[t]he fortuity implied by
reference to accident or exposure is not what is commonly meant
by a failure of workmanship.”
McAllister v. Peerless Ins. Co.,
124 N.H. 676, 680 (1984); see also 9A Steven Plitt et al., Couch
on Insurance § 129:4 (3d ed. 2016).
Cases applying this
principle demonstrate that an insurer has no obligation to
defend a claim that seeks to recover only the cost of repairing
Instead, when considering claims for damages
caused by defective work, an insurer must defend only claims
that seek compensation for additional damages that fortuitously
result from the defective work.
See, e.g., Concord Gen. Mut.
Ins. Co., 160 N.H. at 694 (no coverage for repairs to defective
chimneys required to prevent carbon monoxide infiltration);
Webster v. Acadia Ins. Co., 156 N.H. 317, 322 (2007) (coverage
for damage to roof rafters produced by snow accumulation on
defective roof); High Country Assocs. v. N.H. Ins. Co., 139 N.H.
39, 43 (1994) (coverage for damage to walls caused by water
seepage resulting from defective workmanship); McAllister, 124
N.H. at 680-81 (no coverage for cost of repairing defective
landscaping and leech field); Hull v Berkshire Mut. Ins. Co.,
121 N.H. 120 (1981)(no coverage for repair of defective masonry
work); see also Fletch’s Sandblasting and Painting, Inc. v.
Colony Ins. Co., 2017 DNH 097, 10 (2017) (no coverage for repair
of defective work).
The Carpet Center argues that these precedents do not
foreclose its demand for a defense because Red Oak has not
limited its damage claim to the cost of repairing the defective
According to the Carpet Center, Red Oak intends to
claim that door jambs, baseboards, dry wall, and fixtures will
inevitably be damaged when the allegedly defective work is
Because Red Oak intends to include the cost of
replacing this property in its damage claim, and the property is
not part of the Carpet Center’s allegedly defective work, the
Carpet Center argues that at least a portion of Red Oak’s damage
claim is for covered property damage.2
I am unpersuaded by the Carpet Center’s argument because it
cannot point to a fortuitous event or exposure as a cause of the
damage to the property that will need to be replaced when the
defective tile is removed.
As I have explained, the policy at
issue provides coverage only for personal injury or property
damage caused by an occurrence, and an insured’s defective work
does not satisfy this requirement because it lacks the requisite
This principle applies regardless of whether the
claim is for damage to the property that the insured worked on
directly or other property that requires repair or replacement
in order to correct the defective work.
In both instances, the
sole cause of the property damage is the insured’s defective
work, which cannot qualify as an occurrence.
In the present
case, any property that will be damaged when the defective tile
is replaced will be solely the result of the Carpet Center’s
The Carpet Center also argues that the vinyl flooring underwent
“cupping” or warping after it was installed, due to a
manufacturing defect, and that the cupping constitutes an
“occurrence.” This argument fails because the floor tiles
themselves are part of Holmes’ work even though he obtained them
from an independent source. Therefore, defects in the floortile material cannot constitute an “occurrence,” regardless of
whether they originated at the manufacturing stage or at some
defective workmanship rather than some intervening fortuitous
event or exposure.
Therefore, the Carpet Center is not entitled
to a defense because the underlying action does not seek to
recover for property damage caused by an occurrence.
The Carpet Center appears to rely on Concord General for
the proposition that fortuity is not required to support a
defective workmanship claim so long as the claim seeks coverage
for damage to property other than the property that is the
subject of the insured’s defective workmanship.
I read Concord
In that case, the court was asked to
review a determination by the trial court that carbon monoxide
that leaked from defective chimneys did not constitute “property
160 N.H. at 692.
In affirming the trial court’s
order, the court restated its commitment to the fortuity
requirement but ruled that coverage was not available because
the carbon monoxide infiltration was not itself tangible
Id. at 693-94.
Thus, coverage was denied in
Concord General not because the carbon monoxide infiltration was
not fortuitous, which it clearly was, but because the carbon
monoxide infiltration did not cause tangible “property damage.”
The Carpet Center’s heavy reliance on Cogswell Farm
Condominium Assoc. v. Tower Group, Inc., 167 N.H. 245 (2015)
also does nothing to advance its case.
There, the insurers
sought to avoid coverage for damages resulting from faulty
“weather barrier” components of condominium units, which
included water/ice shield, siding, and the like.
See id. at
The underlying dispute alleged that the components had
been defectively constructed, which resulted in damage to both
the interiors and exteriors of the units due to water leaks.
The fortuitous event or exposure triggering coverage in
that case was continued exposure to rain or ice.
central issue before the court was the applicability of various
coverage exclusions, specifically focusing on the scope of the
“your work” exclusion.
Id. at 249-51.
The court, therefore,
had no need to consider the existence of an “occurrence,” and
its analysis is inapposite here.3
The Carpet Center also argues that I should deny Patriot’s
summary judgment motion because the “exact nature and extent of
the damages claimed” in the underlying suit have not yet been
established. See Doc. No. 22 at 2-3; Doc. No. 24 at 2. The
Carpet Center’s argument, reasonably construed, invokes Federal
Rule of Civil Procedure 56(d). Under Rule 56(d), “[i]f a
nonmovant shows by affidavit or declaration that, for specified
reasons, it cannot present facts essential to justify its
opposition” to a motion for summary judgment, then the “court
may . . . defer considering the motion or deny it . . . .” Fed.
R. Civ. P. 56(d). Typically, a Rule 56(d) motion “must: (1) be
timely; (2) be authoritative; (3) show good cause for failure to
discover the relevant facts earlier; (4) establish a plausible
basis for believing that the specified facts probably exist, and
(5) indicate how those facts will influence the outcome of
summary judgment.” Pina v. Children’s Place, 749 F.3d 785, 794
(1st Cir. 2014). Although these requirements are treated
flexibly, and “one or more … may be relaxed, or even excused,”
In re PHC, Inc. Shareholder Litigation, 762 F.3d 138, 143 (1st
For the reasons stated in this Memorandum and Order, I
grant Patriot’s motion for summary judgment (Doc. No. 21).
clerk is directed to enter judgment accordingly and close the
United States District Judge
October 24, 2017
Laura M. Gregory, Esq.
Brian W. Haynes, Esq.
Anthony J. Antonellis, Esq.
Edward D. Philpot, Jr., Esq.
Cir. 2014), Rule 56(d) clearly demands a certain degree of
specificity. See Rodriguez-Rivera v. Federico Trilla Reg’l
Hosp. of Carolina, 532 F.3d 28, 31 (1st Cir. 2008). Thus,
“speculative assertions” that future discovery will generally
help defeat a motion for summary judgment are insufficient for
obtaining relief under this rule. See Williams v. Techtronic
Indus. of North America, Inc., 600 Fed. Appx. 1 (Mem) (1st Cir.
Here, not only has the Carpet Center failed to comply with
many of the other formal requirements discussed above, it has
crucially failed to specifically identify what it would hope to
learn through more discovery, other than “the nature and extent
of damages” in the abstract sense. Such a speculative claim of
a general nature is insufficient to invoke relief under Rule
56(d). See C.B. Trucking Inc. v. Waste Management, Inc., 137
F.3d 41, 45 (1st Cir. 1998).
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