Insurer’s Application for Declaration that Loss not Covered was Denied

Application by insurer for declaration that homeowner’s policy which excluded the cost of making good faulty material or workmanship did not apply to loss in circumstances where statement of claim alleged faulty workmanship was denied on basis that the cause of loss might not be limited to faulty workmanship.

Hallett v. Fitzpatrick, [2013] N.J. No. 438, December 19, 2013, Newfoundland and Labrador Supreme Court, C. Thompson J.

In Hallett v. Fitzpatrick, the insurer sought a determination that a homeowner’s insurance policy in effect between it and the insured did not cover the peril alleged to have occurred in the statement of claim.

In the statement of claim, the insured alleged faulty workmanship in the replacement and installation of roof shingles. The work was completed in December 2010 and from the pleadings it appears the property was damaged by water on December 27, 2010.

The insurer denied liability to the insured on the basis of exclusions relating to: “the cost of making good faulty material or workmanship” and “caused by water unless the loss or damage resulted from: (d) water which enters your dwelling through an opening which has been created suddenly and accidentally by a Specified Peril other than water damage”. The policy listed specified perils, including fire, lightning, explosion and other sudden and accidental perils.

The Court could not conclude that the policy would not apply to the pleadings. Despite the fact that the statement of claim alleged faulty workmanship, the insured took the position on the application that the cause of the water damage could be something other than faulty workmanship. Accordingly, the insurer’s application was denied.

This case was originally summarized by Cameron B.P. Elder and originally edited by David W. Pilley of Harper Grey LLP.

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