Colorado “occurrence”

In Greystone Construction, Inc. v. National Fire & Marine Insurance Co., No. 09-1412 (10th Cir. November 1, 2011), general contractors Greystone and Branan were each sued by purchases of homes built by each alleging defective construction performed by subcontractors.  CGL insurer American Family Mutual Insurance Company defended both Greystone and Brannon while co-insurer National Fire & Marine Insurance Company denied a defense.  Greystone, Branan, and American Family sued National Fire for contribution towards defense costs.  The federal district trial court entered summary judgment for National Fire.  Relying on General Security Indemnity Co. v. Mountain States Mutual Casualty Co., Nos. 07CA2291 & 07CA2292 (Colo. Ct. App. Feb. 19, 2009), the trial court held that, because the underlying complaints did not seek damages for property damage other than to the insured’s own work, they did not allege “occurrences.”   On appeal, the U.S. Court of Appeals for the Tenth Circuit initially determined that, because neither the Colorado Supreme Court nor the Colorado Court of Appeals had addressed the effect of the subcontractor work exception to the “your completed work” exclusion on the “occurrence” determination, it would certify that question to the Colorado Supreme Court.  However, the Colorado Supreme Court subsequently declined to answer the certified question.  At around the same time, the Colorado General Assembly enacted C.R.S. § 13-20-808.   Left with predicting how the Colorado Supreme Court would resolve the issues, the Tenth Circuit first held that §13-20-808 did not apply retroactively and thus had no application here.  However, the court then held that property damage to non-defective parts of a structure caused by defective workmanship can constitute property damage caused by an “occurrence.”