Commercial general liability (CGL) coverage dispute; Hawkeye-Sec Ins Co v Vector Constr Co; “Occurrence”

On remand from the Supreme Court for consideration of any remaining issues, the court found that the issues raised by defendant-Amerisure were either irrelevant or premature. Thus, it vacated the trial court’s order denying Amerisure’s summary disposition motion and remanded for consideration in light of the Supreme Court’s opinion. Relying on Hawkeye, the court previously concluded “[i]t is an established principle of law that an ‘occurrence’ cannot include damages for the insured’s own faulty workmanship.” Thus, it had reversed the trial court “because there was no genuine issue of material fact the only damage was to” plaintiff-Skanska’s own work product. The Supreme Court reversed the court’s decision, ruling that “an ‘accident’ may include unintentionally faulty subcontractor work that damages an insured’s work product.” On remand, Amerisure asserted “there is a distinction between whether the faulty work was performed by a named insured or an additional insured and that the policy must be limited to the subcontractor’s” (defendant-MAP’s) perspective. This argument was not properly before the court because it was not presented to the trial court, and the issue required factual development. The court instructed the parties to address the issue “in the trial court, which is then to examine the scope of coverage in light of the Michigan Supreme Court’s opinion.” As to Amerisure’s argument the Supreme Court’s holding is to be only applied prospectively, the court found that “the question of prospective or retrospective application is irrelevant. The Michigan Supreme Court did not overrule Hawkeye; it determined that Hawkeye” did not apply here. On remand, the trial court must “determine whether there is coverage (i.e., whether there was an ‘occurrence’) for the damage alleged in the complaint under the language in the CGL policy and, if so, the scope of such coverage.” Amerisure also asked the court “to affirm its position on the alternative grounds that coverage was properly denied on the basis of the ‘Your Work’ exclusion” in the CGL policy. Although a fact question may exist as to “whether the exclusion applied on the basis of ‘the extent of the work product and whether damages occurred beyond it[,]’” the trial court has to first decide “if coverage applies. The exclusions Amerisure contends are dispositive may or may not apply, depending on whether the trial court determines an ‘occurrence’ took place.”