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18-P-247                                             Appeals Court

     ALL AMERICA INSURANCE COMPANY vs. LAMPASONA CONCRETE
                     CORPORATION & others.1


                             No. 18-P-247.

           Essex.       December 5, 2018. - March 19, 2019.

             Present:    Rubin, Milkey, & McDonough, JJ.


Insurance, Insurer's obligation to defend, Comprehensive
     liability insurance, Contractor's insurance, Coverage.
     Contract, Insurance, Indemnity. Indemnity.



     Civil action commenced in the Superior Court Department on
October 9, 2015.

     The case was heard by Timothy Q. Feeley, J., on a motion
for summary judgment.


     Doreen M. Zankowski for Northeast Hospital Corporation.
     Michael F. Aylward for the plaintiff.


     MILKEY, J.     This case arises out of the construction of

Beverly Hospital (hospital), which is owned by Northeast




     1 Northeast Hospital Corporation, Dacon Corporation, and
H.G. Moore Associates, Inc.
                                                                    2


Hospital Corporation (NHC).   Following construction of the

hospital, NHC filed a complaint in Superior Court against the

general contractor, Dacon Corporation (Dacon), alleging property

damage to the finished first floor and other areas of the

hospital.   In that action, Dacon filed a third-party complaint

seeking indemnification from various subcontractors, including

Lampasona Concrete Corporation (Lampasona), for improper

installation of the concrete slab that lies underneath the

finished first floor.

    In a separate action that resulted in this appeal,

Lampasona's insurer, All America Insurance Company (All

America), filed a complaint against the defendants seeking a

judgment declaring that it has no duty to defend or indemnify

Lampasona under the comprehensive general liability (CGL) policy

that Lampasona had purchased.   On review of All America's motion

for summary judgment, a Superior Court judge concluded that

Lampasona's work on the concrete slab was inseparable from work

that other subcontractors performed on other layers of the

flooring system.   On that basis, the judge determined that an

exclusion to the CGL policy applied, and he allowed summary

judgment in All America's favor.   For the reasons that follow,

we vacate the judgment and remand for further proceedings.

    Standard of review.    We review the allowance of a motion

for summary judgment de novo without deference to the motion
                                                                       3


judge's reasoning.     See Miller v. Cotter, 448 Mass. 671, 676

(2007).   In our review, we construe all facts "in the light most

favorable to the nonmoving party."     Drakopoulos v. United States

Bank Nat'l Ass'n, 465 Mass. 775, 777 (2013).

    Background.   1.     Nature of dispute.   The first floor of the

hospital has at least three layers:     a bottom vapor barrier, the

concrete slab, and a top layer of either tile or carpet.       While

Lampasona installed the concrete slab, different subcontractors

installed the other two layers.     In the action that NHC brought

against Dacon, NHC alleges that Lampasona made multiple errors

in installing the concrete slab.     These errors included

puncturing the vapor barrier, which allowed moisture to pass

through into the concrete slab, and improperly mixing fiber

reinforcement into the concrete, which contributed to moisture

wicking to the surface.     The resulting moisture problems caused

damage to the tiles and carpet, such as causing the tiles to

buckle.

    NHC already has repaired many areas of the floor.        This

process required NHC to remove the existing tiles and carpet,

burn off fiber from the top of the concrete, and roll on a

moisture mitigation system.     Despite the summary judgment

context of the declaratory judgment action, the judge assumed

that the entire flooring system, including the vapor barrier
                                                                       4


upwards, must be replaced.2      There is no basis in the record for

this "finding," and, in any event, all facts should have been

construed in the light most favorable to NHC.

       2.    All America insurance policy.   Under the CGL policy

issued to Lampasona, All America agreed to pay all "sums that

the insured becomes legally obligated to pay as damages because

of . . . 'property damage' to which this insurance applies."        In

order for the insurance to apply to property damage, the damage

has to be caused by an "occurrence," which is defined as "an

accident, including continuous or repeated exposure to

substantially the same general harmful conditions."

       The CGL policy also contains three exclusions that are

relevant to the parties' arguments on appeal.       The exclusion

under § j(6) states that the insurance does not apply to "[t]hat

particular part of any property that must be restored, repaired

or replaced because 'your work' was incorrectly performed on

it."       However, this exclusion does not apply to damage

"occurring away from premises you own or rent and arising out of

. . . 'your work'" if the work has been completed or abandoned.




       NHC raised this error in a motion for reconsideration.
       2                                                            In
denying the motion for reconsideration, the judge noted that
whether the vapor barrier needed to be replaced did not alter
his analysis.
                                                                     5


    The CGL policy also contains two additional exclusions.

The exclusion under § l of the policy does not cover damage to

"'your work' arising out of it or any part of it."    The other

exclusion, under § m, does not cover damage to "impaired

property."   "Impaired property" is defined, in relevant part, as

property other than Lampasona's work that can be restored by

"[t]he repair, replacement, adjustment or removal of"

Lampasona's work.

    3.   Summary judgment.   Following a hearing in the

declaratory judgment action, a Superior Court judge granted

summary judgment in All America's favor based on the application

of the § j(6) exclusion.   Citing to Bond Bros., Inc. v.

Robinson, 393 Mass. 546 (1984), the judge explained that the

"key" to his ruling was his determination that Lampasona's work

played an "integral and inseparable part . . . in the

installation of a flooring system that was comprised of multiple

layers, but constituted one completed product:     interior

flooring for the first floor of [the hospital]."    The judge also

stated that while installing the concrete slab, "Lampasona's

work was incorrectly, even if inadvertently, performed on the

vapor barrier."   The judge concluded that § j(6) of the policy

excluded coverage for any damage that resulted from the pierced

vapor barrier.
                                                                     6


    Discussion.    1.   Section j(6) exclusion.   We begin by

addressing § j(6), the sole ground relied on by the judge in

granting summary judgment.   That exclusion exempts from coverage

an insured contractor's faulty workmanship, but only with

respect to "that particular part of the property subject to the

faulty workmanship."    Frankel v. J. Watson Co., 21 Mass. App Ct.

43, 46 (1985).   A review of the facts in Frankel shows why that

exclusion does not apply here.    In Frankel, homeowners alleged

that their farmhouse began to sag due to the negligent

construction of the foundation.   Id. at 44.   Because the

contractor's work product was limited to the foundation and did

not extend to the farmhouse, the contractor's general liability

policy covered damage to the farmhouse.    Id. at 46.   Frankel is

thus a fairly straightforward application of the general rule

that "although a commercial general liability policy does not

provide coverage for faulty workmanship that damages only the

resulting work product, the policy does provide coverage if the

faulty workmanship causes . . . property damage to something

other than the insured's work product."   S. Plitt, D. Maldonado,

J.D. Rogers, & J.R. Plitt, Couch on Insurance 3d § 129:4 (rev.

ed. 2015).

    In the case before us, it is undisputed that Lampasona did

not install the vapor barrier on which the concrete slab sits,

or the floor tiles or carpeting installed on top of the concrete
                                                                         7


slab.      The alleged damage that Lampasona caused to those parts

of the hospital property (e.g., the piercing of the vapor

barrier and the buckling of the floor tiles) does not fall

within the § j(6) exclusion.        See Frankel, 21 Mass. App. Ct. at

46.3

       Bond Bros., Inc. v. Robinson, 393 Mass. 546 (1984), the

principal case on which the judge relied, is not to the

contrary.4        There, a subcontractor was hired to install rebar in

connection with the construction of a concrete wall, but failed

to perform the rebar work for a portion of the wall.        Id. at

547.       The missing rebar meant that "the wall did not meet design

criteria, was structurally unstable, and required remedial

work."      Id.    In other words, the faulty workmanship at issue in

Bond Bros. (the missing rebar) did not cause, but itself was,

the damage.        That is different from what happened here, where




       All America argues that Bond Bros., discussed in detail
       3

below, calls into question the continued viability of Frankel.
We previously have rejected such a claim. See Lusalon, Inc. v.
Hartford Acc. & Indem. Co., 23 Mass. App. Ct. 903, 904-905
(1986), S.C., 400 Mass. 767 (1987) (recognizing that both Bond
Bros. and Frankel stand for same proposition: "the liability of
[an] insurer [does] not extend to parts of the property that the
insured [has] worked on").

       All America also relies on cases involving general
       4

contractors. See, e.g., Donovan v. Commercial Union Ins. Co.,
44 Mass. App. Ct. 596 (1998). Those cases are inapposite, as a
general contractor's work product includes the entire project,
whereas subcontractors work on discreet components of a project.
                                                                   8


Lampasona's work on the concrete slab caused damage to other

parts of the hospital that were not part of its work.

     None of this is to say that the judge necessarily was wrong

in concluding that the vapor barrier, concrete slab, and floor

tiles or carpeting fairly could be characterized as layers of an

integrated flooring system.   However, that fact by itself is

beside the point for purposes of determining whether the § j(6)

exclusion applies.    Where Lampasona was hired to install one

layer of the flooring system but caused discrete damage to the

other layers, that damage falls outside the § j(6) exclusion.

Cf. Essex Ins. Co. v. BloomSouth Flooring Corp., 562 F.3d 399,

410 (1st Cir. 2009) (concluding, in reliance on Frankel, that

carpet installer enjoyed coverage under its CGL policy with

regard to damage it may have caused to concrete subfloor on

which carpeting was installed, notwithstanding exclusion for

property damage to carpet installer's product).5

     We further note that the § j(6) exclusion, by its express

terms, does not apply to damage that occurred after Lampasona

completed its work.   Construing the facts in the light most




     5 To the extent the judge was suggesting that Lampasona's
actions necessarily brought the vapor barrier within Lampasona's
scope of work, we discern no merit in that suggestion. See
Essex Ins. Co., 562 F.3d at 410 (rejecting argument that
concrete subfloor on which carpeting was installed became carpet
installer's work product).
                                                                     9


favorable to the nonmoving party, NHC has alleged that some of

the damage occurred after the construction of the hospital.

Such damage would not fall within the scope of the § j(6)

exclusion in any event.

     2.   Alternative grounds.   We now turn to whether the grant

of summary judgment can be sustained on alternative grounds.

All America argued in the trial court, as it does on appeal,

that there was no separate "occurrence" here that could trigger

coverage.6   Rather, according to All America, a claim against

Lampasona simply would be one for faulty workmanship, which

would not be covered.    To support this argument, All America

relies on cases such as Bond Bros.    All America's contention

that there was no "occurrence" fails for the same reasons

discussed above with respect to the § j(6) exclusion.    The claim

here is not simply that Lampasona's work was substandard and

needs to be replaced, but that this work caused damage to

particular parts of the hospital property outside of its own

work.    The puncturing of the vapor barrier and the migration of

water through the concrete slab causing damage to the layer

above it fit readily within the definition of an occurrence.

See Trustees of Tufts Univ. v. Commercial Union Ins. Co., 415


     6 "Occurrence" is defined in the policy as "an accident,
including continuous or repeated exposure to substantially the
same general harmful conditions."
                                                                   10


Mass 844, 848 (1993) (applying term "occurrence" to exposure to

contaminants).

     All America also argues that two alternative exclusions

apply:   those under § l and § m.   However, the exclusion under

§ l by its clear terms applies only to damage to Lampasona's own

work, and the alleged property damage here was to other

subcontractors' work.   Cf. Essex Ins. Co., 562 F. 3d at 409-410

(discussing analogous exclusion for damage to insured's

product).   All America's reliance on the § m exclusion is

similarly unavailing, as the record does not support a

conclusion that any damaged property can be restored to use

merely through the repair, replacement, adjustment, or removal

of Lampasona's work.7

     Conclusion.   For all of the above reasons, we conclude that

the judge erred in ruling, as a matter of law, that All America

faced no duty to defend or indemnify Lampasona for the claims




     7 One additional point bears comment. The judge questioned
NHC's standing. Given that NHC was brought to this litigation
as a defendant, we are not clear why the judge felt that its
standing was implicated. In any event, because NHC's ability to
recover under Lampasona's policy depends on the resolution of
the coverage issues that All America raised (at least insofar as
they implicate All America's duty to indemnify), it is plain
that NHC has "a definite interest in the matters in contention"
sufficient to confer standing. Bonan v. Boston, 398 Mass. 315,
320 (1986).
                                                                  11


that NCH has brought.8   We therefore vacate the judgment and

remand for additional proceedings consistent with this opinion.

                                    So ordered.




     8 At oral argument, All America urged us -- in the event we
reversed -- to offer detailed views on the particular species of
potential damages here for which it could be liable. Especially
given the underdeveloped state of the factual record, it would
be inappropriate to offer such musings.
