Ohio “occurrence” and “your work” and “impaired property” exclusions

In Westfield Ins. Co. v. R.L. Diorio Custom Homes, Inc., No. CA2009-09-12 (Ohio Ct. App. 12th Dist. March 15, 2010), homeowner Schumacher sued homebuilder Diorio alleging that Diorio failed to construct the home in a workmanlike or timely manner, and misrepresented the time and expense for constructing the home.  The complaint included causes of action for negligent misrepresentation and breach of contract.  Diorio’s CGL insurer, Westfield, defended Diorio under a reservation of rights and filed a declaratory judgment action.   The trial court entered summary judgment for Westfield, holding that Westfield did not have a duty to defend Diorio against the Schumacher complaint because it did not seek damages because of “property damage” caused by an “occurrence.”  On appeal, the Ohio intermediate court of appeal, Twelfth  Appellate District, affirmed, holding that the damages alleged by Schumacher did not result from an “occurrence.”   In dicta, recognizing that other Ohio Appellate Districts had held that negligent defective construction can constitute an “occurrence,” the court goes on to state that, even assuming an “occurrence,” multiple exclusions would eliminate any duty to defend.  Specifically, the court states that exclusions j(5) and j(6) would apply to the breach of contract claim for faulty workmanship and any resulting property damage, and exclusion m. – “impaired property” – would apply to the delay and misrepresentation claims. The opinion does not indicate that Diorio hired subcontractors to do any of the work or that there was any damage to any property other than the home itself.