The U.S. Eleventh Circuit Court of Appeals has held under Alabama law that homeowners who brought a successful breach of contract action against their homebuilder, but who failed to have the jury differentiate covered and non-covered claims, are not entitled to coverage under the builder’s CGL policy. Penn. Nat. Mut. Cas. Ins. Co. v. Snider, 2015 WL 1544617 (11th Cir. April 7, 2015).
A builder was hired to build a home, but ultimately walked off the job without finishing. The homeowners completed the project, discovering in the process that some of the construction was faulty and needed repair. They sued the builder for breach of contract, breach of implied warranty, emotional distress and mental anguish, which suit the builder’s CGL insurer defended under a reservation of rights. The homeowners prevailed on all four claims and were awarded a lump sum for all counts. The insurer filed a separate action for declaratory relief, and the homeowners counter-sued to recover the judgment from the insurer. The parties filed cross-motions for summary judgment. The trial court ruled in favor of the insurer and the homeowners appealed.
The Eleventh Circuit held that the homeowners had the burden of proving that coverage existed and that they could not do so. At least a portion of the judgment was unquestionably not covered because the builder’s refusal to complete the project was an intentional act, not an “occurrence.” Because the verdict form did not differentiate the damages awarded for these claims from other potentially covered claims, the Eleventh Circuit held that the homeowners could not meet their burden of proof to establish what damages were covered. The trial court’s judgment was affirmed.