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May 16, 1990


Appeal from the Superior Court of the District of Columbia; Hon. Reggie B. Walton, Trial Judge

Before Rogers, Chief Judge, Farrell, Associate Judge, and Reilly, Senior Judge.

The opinion of the court was delivered by: Rogers

Appellant, Wrecking Corporation of America, Virginia, Inc. (WCA), appeals from the grant of summary judgment to appellee, Insurance Company of North America (INA), on the ground that the trial Judge erred in ruling that INA had no duty to defend WCA since the property damage (the compensable occurrence under the insurance policy) occurred after the policy had been cancelled. Appellant contends that the policy was an occurrence policy and hence covered property damage as a result of alleged negligence during the period the policy was in effect. We affirm. *fn1


In March 1979, WCA, a demolition subcontractor, began doing demolition work at the Papermill Project and completed its work on August 12, 1979. A portion of a wall on which WCA had worked collapsed in October 1979. WCA had obtained a general liability policy from INA covering WCA for property damage (other than caused by blasting) at the site. The policy provided that "property damage" is

physical injury to or destruction of tangible property which occurs during the policy period, including the loss thereof at any time resulting therefrom. . . .

The policy defined "occurrence" to mean

an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.

The policy was in effect from March 1, 1979, until August 27, 1979, when it was cancelled at the request of WCA.

INA also insured the contractor at the Papermill Project for all of the damage caused by the collapse of the wall. Having paid the contractor's claim, INA sought subrogation against WCA alleging that the collapse of the wall was due solely to WCA's negligence. WCA notified INA of the claim and requested that INA appoint an attorney too defend it. INA refused because, although it agreed that the insurance policy was in effect while WCA worked at the project, the collapse and the property damage occurred after the insurance policy was cancelled.

WCA filed for a declaratory judgment that INA should have provided a defense for it and cross motions for summary judgment were filed. The Judge granted INA's motion. WCA appealed and the case was remanded to the trial court with instructions to rule on the motion in light of the entire insurance policy. Wrecking Corporation of America, Virginia Inc. v. Insurance Company of America, No. 86-18 (D.C. May 5, 1987) (unpublished order). On remand, the trial Judge granted INA's motion on the ground that the insurance policy limited the insurer's liability to compensation for property damage occurring during the policy period and the damage that was the subject of the litigation occurred in October 1979 after the policy had been terminated; in other words, the compensable occurrence did not take place when the damage-causing activity was performed but when the resulting damage occurred.


On appeal WCA contends that the damage at Papermill Project was caused by a process set in motion by appellant's actions, rather than by a single act. There are several problems with this contention.

First, the prevailing rule is that "properly damage occurs" at the time the damage is discovered or when it has manifested itself. See, e.g., Aetna Casualty & Surety Co. v. PPG Industries, Inc., 554 F. Supp. 290, 294 (D. Ariz. 1983) ("It appears well settled that where a policy insures against an occurrence,' rather than an accident,' coverage is based not upon the time when the wrongful act was committed but at the time the damage was discovered.") (citations from New York, Indiana and California omitted); American Motorists Ins. Co. v. E.R. Squibb & Sons, Inc., 95 Misc. 2d 222, 406 N.Y.S.2d 658 (1978) (policy's definition of occurrence -- "an accident or injurious exposure to conditions which results, during the policy period, in bodily injury or property damage" -- is identical to that in Standard Comprehensive Liability Policy promulgated in 1966 by the National Bureau of Casualty Underwriters and the Mutual Insurance Rating Bureau in an effort to resolve whether previously used word, "accident," refers to the act or the injury resulting from the act; coverage turns on the results and not the act); Annotation, Events As Occurring Within Period of Coverage of "Occurrence" and "Discovery" or ...

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