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PA Court Finds Occurrence When Water Infiltration Became Reasonably Apparent

April 1, 2016

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<p style="text-align: justify;">Olde Glory Builders performed construction work on Thomas Sontag’s home. Sontag claimed that his roof leaked on several occasions, causing significant water damage following a rainstorm in June 2013. Sontag’s homeowners’ insurance, Travelers, paid Sontag $50,000 for the damage.</p>
<p style="text-align: justify;">Thomas Sontag later sued various contractors, including Olde Glory, seeking to recover damages not paid by Travelers. In his complaint, Sontag alleged negligent construction and design and a failure to detect and fix the issues, resulting in damage to his home. As a subrogee of Sontag, Travelers filed the same complaint against Olde Glory, seeking to recoup the $50,000 paid to Sontag.</p>
<p style="text-align: justify;">Olde Glory was insured by Donegal Mutual Insurance Company for the periods of December 2010 to December 2011 and December 2011 to December 2012, and sought coverage from Donegal, who ultimately denied coverage for the Travelers’ complaint on the basis that the action did not involve an occurrence that took place within the policy period. Olde Glory moved for summary judgment seeking an order against Donegal to compel coverage under the policy.</p>
<p style="text-align: justify;">Sontag claimed that the water infiltration at issue became apparent on or before November 2012. The judge determined that the effects of Olde Glory’s alleged negligence was first manifested during the policy term when Sontag first reported roof leaks. The court determined that an occurrence takes place when the injurious effects of a negligent act first manifest themselves to put a reasonable person on notice of an injury, and therefore, pursuant to the first manifestation rule, coverage was triggered when the injury becomes reasonably apparent. Plaintiff’s motion for summary judgment was granted and defendant’s motion for summary judgment was denied.</p>
Thanks to Chelsea Rendelman for her contribution to this post and please write to <a href="" target="_blank" rel="noopener">Mike Bono</a> for more information.


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