         IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

                                 January 2015 Term

                                 ________________                   FILED
                                                                  May 20, 2015
                                   No. 14-0799                    released at 3:00 p.m.
                                                                  RORY L. PERRY II, CLERK
                                 _______________                SUPREME COURT OF APPEALS
                                                                    OF WEST VIRGINIA

                                      BPI, INC.,
                                      Petitioner

                                          v.

               NATIONWIDE MUTUAL INSURANCE COMPANY,

                             Respondent


       ___________________________________________________________

           Certified Question from the United States District Court for the

                            Eastern District of Kentucky

                       Civil Action No. 7:12-cv-00139-ART


                    CERTIFIED QUESTION ANSWERED

       ___________________________________________________________

                             Submitted: March 10, 2015

                                Filed: May 20, 2015


Leigh G. Latherow, Esq.	                              Ronda L. Harvey, Esq.
VanAntwerp, Monge, Jones,	                            Bowles Rice LLP
Edwards & McCann, LLP	                                Charleston, West Virginia
Ashland, Kentucky	                                    Drew Byron Meadows, Esq.
Counsel for Petitioner	                               Pro Hac Vice
                                                      Kellie M. Collins, Esq.
                                                      Pro Hac Vice
                                                      Golden & Waters, PLLC
                                                      Lexington, Kentucky
                                                      Counsel for Respondent


CHIEF JUSTICE WORKMAN delivered the Opinion of the Court.
                               SYLLABUS BY THE COURT




              1. “Defective workmanship causing bodily injury or property damage is an

‘occurrence’ under a policy of commercial general liability insurance. To the extent our prior

pronouncements in Syllabus point 3 of Webster County Solid Waste Authority v. Brackenrich

and Associates, Inc., 217 W.Va. 304, 617 S.E.2d 851 (2005); Syllabus point 2 of Corder v.

William W. Smith Excavating Co., 210 W.Va. 110, 556 S.E.2d 77 (2001); Syllabus point 2

of Erie Insurance Property and Casualty Co. v. Pioneer Home Improvement, Inc., 206 W.Va.

506, 526 S.E.2d 28 (1999); and Syllabus point 2 of McGann v. Hobbs Lumber Co., 150

W.Va. 364, 145 S.E.2d 476 (1965), and their progeny are inconsistent with this opinion, they

are expressly overruled.” Syl. Pt. 6, Cherrington v. Erie Ins. Prop. & Cas. Co., 231 W.Va.

470, 745 S.E.2d 508 (2013).



              2. “ ‘A de novo standard is applied by this court in addressing the legal issues

presented by a certified questions from a federal district or appellate court.’ Syl. Pt. 1, Light

v. Allstate Ins. Co., 203 W.Va. 27, 506 S.E.2d 64 (1998).” Syl. Pt. 2, Aikens v. Debow, 208

W.Va. 486, 541 S.E.2d 576 (2000).



              3. “This Court undertakes plenary review of legal issues presented by certified

question from a federal district or appellate court.” Syl. Pt. 1, Bower v. Westinghouse

                                                i
Electric Corp., 206 W.Va. 133, 522 S.E.2d 424 (1999).



              4. “Retroactivity of an overruling decision is designed to provide equality of

application to the overruling decision because its new rule has been consciously designed to

correct a flawed area of the law.” Syl. Pt. 4, Bradley v. Appalachian Power Co., 163 W.Va.

332, 256 S.E.2d 879 (1979).



              5. “In determining whether to extend full retroactivity, the following factors

are to be considered: First, the nature of the substantive issue overruled must be determined.

If the issue involves a traditionally settled area of law, such as contracts or property as

distinguished from torts, and the new rule was not clearly foreshadowed, then retroactivity

is less justified. Second, where the overruled decision deals with procedural law rather than

substantive, retroactivity ordinarily will be more readily accorded. Third, common law

decisions, when overruled, may result in the overruling decision being given retroactive

effect, since the substantive issue usually has a narrower impact and is likely to involve fewer

parties. Fourth, where, on the other hand, substantial public issues are involved, arising from

statutory or constitutional interpretations that represent a clear departure from prior

precedent, prospective application will ordinarily be favored. Fifth, the more radically the

new decision departs from previous substantive law, the greater the need for limiting

retroactivity. Finally, this Court will also look to the precedent of other courts which have


                                               ii
determined the retroactive/prospective question in the same area of the law in their overruling

decisions.” Syl. pt. 5, Bradley v. Appalachian Power Co., 163 W.Va. 332, 256 S.E.2d 879


(1979).




              6. The determination regarding defective workmanship causing bodily injury


or property damage contained in Cherrington v. Erie Insurance Property & Casualty Co.,


231 W.Va. 470, 745 S.E.2d 508 (2013), should be applied retroactively to any pending claim.





                                              iii

Workman, Chief Justice:



              This matter is before the Court upon certified question from the United States

District Court for the Eastern District of Kentucky (hereinafter “District Court”). That court

has certified two questions regarding retroactive application of this Court’s decision in

Cherrington v. Erie Insurance Property & Casualty Co., 231 W.Va. 470, 745 S.E.2d 508

(2013). This Court accepted the certified questions and docketed the matter for resolution.

Upon review of the parties’ briefs and arguments, this Court answers the retroactivity issue

presented in the first certified question and remands this matter to the District Court for

further proceedings.



                             I. Factual and Procedural History

              The underlying insurance dispute arose from a construction project in

Prestonsburg, Kentucky, for which BPI, Inc. (hereinafter “BPI), was the general contractor.

In February 2008, American Towers LLC (hereinafter “American Towers”) hired BPI, a

West Virginia contractor, to construct a 300-foot cell tower and cell tower compound, with

an access road to the tower, using plans engineered and provided by American Towers. The

access road collapsed within one year after the completion of the project, allegedly due to

faulty workmanship of BPI and/or its subcontractors.




                                              1

              American Towers filed a civil action against BPI, and BPI filed a cross-claim

against Nationwide Mutual Insurance Company (hereinafter “Nationwide”), claiming that

BPI’s potential liability was covered under the commercial general liability (hereinafter

“CGL”) policy it had purchased from Nationwide. In response, Nationwide sought a

declaration that it was not obligated to insure BPI for this incident. Subsequent to discovery,

BPI and Nationwide filed cross-motions for summary judgment.1



              The District Court determined that West Virginia law should apply, based upon

the residence of the named insured and the contract itself. The District Court also recognized

that determinative issues in this case depend upon the application of West Virginia law

regarding BPI’s insurance policy covering property damage caused by an “occurrence.” The

District Court examined this Court’s holding in Cherrington and noted that damages arising

from faulty workmanship had not been deemed damages caused by an “occurrence” prior to

this Court’s Cherrington decision. See, e.g., Corder v. William W. Smith Excavating Co.,

210 W.Va. 110, 116, 556 S.E.2d 77, 83 (2001); Erie Ins. Prop. & Cas. Co. v. Pioneer Home

Improvement, Inc., 206 W.Va. 506, 512, 526 S.E.2d 28, 34 (1999) (“[D]amages to a building

sustained by an owner as the result of a breach of a construction contract due to a contractor’s

faulty workmanship are a business risk to be borne by the contractor and not by his



       1
        The parties’ motions for summary judgment were denied without prejudice, pending
the decision of this Court on the certification order.

                                               2

commercial general liability insurer.”).



              The 2013 Cherrington decision, issued after American Towers filed the

underlying civil action against BPI, overruled several cases examined by the District Court,2

holding as follows in syllabus point six:

                      Defective workmanship causing bodily injury or property
              damage is an “occurrence” under a policy of commercial general
              liability insurance. To the extent our prior pronouncements in
              Syllabus point 3 of Webster County Solid Waste Authority v.
              Brackenrich and Associates, Inc., 217 W.Va. 304, 617 S.E.2d
              851 (2005); Syllabus point 2 of Corder v. William W. Smith
              Excavating Co., 210 W.Va. 110, 556 S.E.2d 77 (2001); Syllabus
              point 2 of Erie Insurance Property and Casualty Co. v. Pioneer
              Home Improvement, Inc., 206 W.Va. 506, 526 S.E.2d 28 (1999);
              and Syllabus point 2 of McGann v. Hobbs Lumber Co., 150
              W.Va. 364, 145 S.E.2d 476 (1965), and their progeny are
              inconsistent with this opinion, they are expressly overruled.

231 W.Va. at 473, 745 S.E.2d at 511-12, syl. pt. 6. Thus, under Cherrington, defective

workmanship may qualify as an occurrence, allowing resulting damages to be covered under

a policy such as BPI’s policy in this case.



              In the certified questions presented to this Court, the District Court observes

that at least a portion of BPI’s potential damages may arise from what could be characterized



       2
       The policies in the overruled cases and the policy in the present case defined
“occurrence” in nearly identical terms. See, e.g., Corder, 210 W.Va. at 116, 556 S.E.2d at
83; Pioneer Home Improvement, 206 W.Va. at 509, 526 S.E.2d at 31.

                                              3

as defective workmanship. Thus, the District Court requests this Court to answer the

question of whether our decision in Cherrington applies retroactively. Further, the District

Court poses the question: “if Cherrington does not apply retroactively, and the road collapsed

because it was poorly constructed, then does the collapse of the road nevertheless qualify as

an ‘occurrence’?” For reasons explained below, this Court holds that Cherrington applies

retroactively.



                                     II. Standard of Review

                 Pursuant to West Virginia Code § 51-1A-3 (2014),

                 the supreme court of appeals of West Virginia may answer a
                 question of law certified to it by any court of the United States
                 or by the highest appellate court or the intermediate appellate
                 court of another state or of a tribe of Canada, a Canadian
                 province or territory, Mexico or a Mexican state, if the answer
                 may be determinative of an issue in a pending cause in the
                 certifying court and if there is no controlling appellate decision,
                 constitutional provision or statute of this state.

This Court has consistently explained that “‘[a] de novo standard is applied by this court in

addressing the legal issues presented by a certified questions from a federal district or

appellate court.’ Syl. Pt. 1, Light v. Allstate Ins. Co., 203 W.Va. 27, 506 S.E.2d 64 (1998).”

Syl. Pt. 2, Aikens v. Debow, 208 W.Va. 486, 541 S.E.2d 576 (2000); see also Syl. Pt. 1, T.

Weston Inc. v. Mineral Cnty., 219 W.Va. 564, 638 S.E.2d 167 (2006): Syl. Pt. 1, Feliciano

v. 7-Eleven, Inc., 210 W.Va. 740, 559 S.E.2d 713 (2001); Syl. Pt. 1, Gallapoo v. Wal-Mart

Stores, Inc., 197 W.Va. 172, 475 S.E.2d 172 (1996). Likewise, in syllabus point one of

                                                 4

Bower v. Westinghouse Electric Corp., 206 W.Va. 133, 522 S.E.2d 424 (1999), this Court

explained that we “undertake[] plenary review of legal issues presented by certified question

from a federal district or appellate court.” Under this plenary standard of review, we proceed

to consider this matter.



                                       III. Discussion

           A. Holding of Cherrington: No Specific Reference to Retroactivity

              As referenced above, this Court’s decision in Cherrington addressed the issue

of defective workmanship causing bodily injury or property damage and held that such event

is properly characterized as an “occurrence” under a CGL insurance policy. The Cherrington

decision altered the law in West Virginia with regard to that issue, and the new principle was

applied to the 2004 insurance policy under review in Cherrington. Beyond its decision to

apply the new principle to the 2004 policy in that case, this Court did not address the matter

of retroactivity in Cherrington, and no reference to past or future insurance policies was

made.



                           B. Retroactivity of Judicial Decisions

              This Court has wisely explained that we will not attempt to formulate a “single

answer to questions that may arise on the issue of retroactivity.” Adkins v. Leverette, 161




                                              5

W.Va. 14, 20, 239 S.E.2d 496, 499 (1977).3 In this Court’s scrutiny of concepts of

retroactivity, however, discussions appropriately commence with the recognition that this

Court, “like all courts in the country, adheres to the common law principle that, ‘[a]s a

general rule, judicial decisions are retroactive in the sense that they apply both to the parties

in the case before the court and to all other parties in pending cases.’ Crowe v. Bolduc, 365

F.3d 86, 93 (1st Cir. 2004).” Caperton v. A.T. Massey Coal Co., 225 W. Va. 128, 157, 690

S.E.2d 322, 351 (2009); see also Alaskan Vill., Inc. v. Smalley, 720 P.2d 945, 949 (Alaska

1986) (“Absent special circumstances, a new rule of law will apply in the case before the

court and in all subsequent cases.”); Citicorp N. Am., Inc. v. Franchise Tax Bd., 100

Cal.Rptr.2d 509, 525 (Cal. Ct. App. 2000) (“[T]he general rule as to judicial opinions is that

they are fully retroactive.”); Findley v. Findley, 629 S.E.2d 222, 228 (Ga. 2006) (“[W]e shall

continue to apply the general rule that a judicial decision announcing a new rule is

retroactive[.]”); Aleckson v. Village of Round Lake Park, 679 N.E.2d 1224, 1226 (Ill. 1997)

(“Generally, when a court issues an opinion, the decision is presumed to apply . . .

retroactively [.]”); Dempsey v. Allstate Ins. Co., 104 P.3d 483, 489 (Mont. 2004) (“Therefore

today we reaffirm our general rule that [w]e give retroactive effect to judicial decisions.”

(internal quotations and citation omitted)); In re Commitment of Thiel, 625 N.W.2d 321, 326

(Wis. Ct. App. 2001) (“Wisconsin generally adheres to the ‘Blackstonian Doctrine,’ which


       3
       Similarly, this Court acknowledged in Kincaid v. Mangum, 189 W.Va. 404, 432
S.E.2d 74 (1993), that “we continue to recognize that there is no one rule which will answer
questions regarding the issue of retroactivity in every case. . . .” Id. at 416, 432 S.E.2d at 86.

                                                6

provides that a decision that clarifies, overrules, creates or changes a rule of law is to be

applied retroactively.”).



               Particularly relevant in the civil context, courts have consistently held that

common law provides that appellate decisions are presumed to apply retroactively. Ireland

v. Worcester Ins. Co., 826 A.2d 577, 580-81 (N.H. 2003); see also Beavers v. Johnson

Controls World Servs., Inc., 881 P.2d 1376, 1383 (N.M. 1994) (“[W]e believe there should

be a presumption that a new rule adopted by a judicial decision in a civil case will operate

retroactively.”); Christy v. Cranberry Volunteer Ambulance Corps, Inc., 856 A.2d 43, 51 (Pa.

2004) (“Our general principle is that we apply decisions involving changes of law in civil

cases retroactively[.]”); State v. Styles, 693 A.2d 734, 735 (Vt. 1997) (“We have previously

adopted the common law rule that a change in law will be given effect while a case is on

direct review, except in extraordinary cases. This rule applies whether the proceedings are

civil or criminal.”).



               In the United States Supreme Court’s decision in James B. Beam Distilling Co.

v. Georgia, 501 U.S. 529 (1991), a majority of the justices agreed that a rule of federal law,

announced and applied to the parties in the case, must be given full retroactive effect by all

courts adjudicating federal law. Id. at 540. The Court recognized the potential inequity of

selective prospectivity, defined as a situation in which a court applies a new rule “in the case


                                               7

in which it is pronounced, then return[s] to the old one with respect to all others arising on

facts predating the pronouncement.” Id. at 537. The Court reasoned that selective

prospectivity ignores the principle that “litigants in similar situations should be treated the

same, a fundamental component of stare decisis and the rule of law generally.” Id.

Retroactivity was recognized as “overwhelmingly the norm, and is in keeping with the

traditional function of the courts to decide cases before them based upon their best current

understanding of the law” Id. at 535 (citations omitted).



              These principles of retroactivity were expanded by the United States Supreme

Court in Harper v. Virginia Department of Taxation, 509 U.S. 86 (1993), and the Court

explained that a controlling interpretation of federal law “must be given full retroactive effect

in all cases still open on direct review and as to all events, regardless of whether such events

predate or postdate our announcement of the rule.” Id. at 97. The Court noted that such rule

extends the ban against selective application of new rules. Id. “[W]e can scarcely permit

the substantive law to shift and spring according to the particular equities of individual

parties’ claims of actual reliance on an old rule and of harm from a retroactive application

of the new rule.” Id. at 97 (quotations and brackets omitted). The Court in Harper concluded

that in the absence of an announcement that a decision is to have prospective effect only, “it

is fairly assumed that the decision will apply prospectively and retroactively.” Id. at 98




                                               8

(additional citation omitted).4



               Justice Harlan provided an illuminating allegory in his separate opinion in

Williams v. United States, 401 U.S. 667 (1971) (Harlan, J., concurring and dissenting),

regarding the injustice of selective prospectivity. He explained that “[s]imply fishing one

case from the stream of appellate review, using it as a vehicle for pronouncing new

constitutional standards, and then permitting a stream of similar cases subsequently to flow

       4
         In a purely prospective ruling, “even the party who successfully litigates the issue
does not benefit from the new rule.” Ashland Oil, Inc. v. Rose, 177 W. Va. 20, 25 n.10, 350
S.E.2d 531, 537 n.10 (1986). Thus, all cases in which new rulings are applied to the litigants
in that case must be characterized as at least partially retroactive. “Prospective application
of a judicial decision is a departure from the general rule and is only appropriate in exigent
circumstances.” Paul v. Wayne Co Dep’t of Pub. Serv., 722 N.W.2d 922, 924 (Mich. 2006).
        The various approaches to the issue of retroactivity were aptly summarized in
Thompson v. Hagan, 523 P.2d 1365 (Idaho 1974):

               Three different approaches to retroactivity can be identified. The
               first approach is the traditional rule which is derived from the
               concept that courts do not pronounce new law, but only discover
               the true law. Under this approach there are no new decisions, but
               only clarifications of the true law which makes a decision
               applicable to both past and future cases. The second approach is
               the prospective rule. Under this rule a decision is effective only
               in future actions, and does not affect the rule of law in the case
               in which the new rule is announced. The third approach is the
               modified prospective rule which is a combination of the
               traditional and prospective rules. Under the modified
               prospective rule, the new decision applies prospectively and to
               the parties bringing the action resulting in the new decision; or,
               to the parties bringing the action and all similar pending actions.

Id. at 1371.


                                               9

by unaffected by that new rule” was inconsistent with proper judicial standards. Id. at 679.

Courts have consistently applied the settled principle of treating similarly-situated defendants

in the same manner and attempting to refrain from leaving one to be a “chance beneficiary.”

United States v. Johnson, 457 U.S. 537, 555-56 n.16 (1982). The United States Supreme

Court emphasized that failure to apply new rules to pending cases creates an “actual

inequity” through the court’s selection of “which of many similarly situated defendants

should be the chance beneficiary of a new rule.” Griffith v. Kentucky, 479 U.S. 314, 323

(1987) (citations omitted).



                  The concept of applying new rules to pending cases was also addressed in

Forster v. North Dakota Workers Compensation Bureau, 447 N.W.2d 501 (N.D. 1989),

where the North Dakota court providing the following sound reasoning:

                  Thus a court upon considering the circumstances of the
                  particular case may determine that an overruling decision should
                  be given limited retroactive effect, so that the new rule, besides
                  governing the rights of the parties to the overruling case, will
                  govern the rights of parties to other cases which were pending
                  when the overruling case was decided, but that the old rule will
                  still govern the rights of the parties which had been terminated
                  prior to the time the overruling case was decided.

Id. at 505 n.4.



                  This Court has also recognized the evolution of concepts of retroactivity and

has noted that despite the common law rule of retroactivity of appellate judicial decisions,

                                                 10

“[t]he courts of this country long have recognized exceptions to the rule of retroactivity[.]”

Ashland Oil, Inc., 177 W.Va. at 23, 350 S.E.2d at 534. This Court’s seminal case regarding

exceptions to retroactivity is Bradley v. Appalachian Power Co., 163 W.Va. 332, 256 S.E.2d

879 (1979). In Bradley, this Court altered the principles of contributory negligence and held

that “[a] party is not barred from recovering damages in a tort action so long as his

negligence or fault does not equal or exceed the combined negligence or fault of the other

parties involved in the accident.” Id. at 332, 256 S.E.2d at 880, syl. pt. 3. The Court in

Bradley overruled prior contributory negligence cases to the extent that they were

inconsistent with the newly announced principles. Id. at 343, 256 S.E.2d at 885. Within the

Bradley opinion, this Court also addressed the matter of retroactivity of its decision and held

as follows in syllabus point four: “Retroactivity of an overruling decision is designed to

provide equality of application to the overruling decision because its new rule has been

consciously designed to correct a flawed area of the law.” Id. at 332, 256 S.E.2d at 880, syl.

pt. 4.



              In syllabus point five of Bradley, this Court enumerated several considerations

in a determination of retroactivity, with the weight given to each factor to vary with the facts

of a particular case.

                     In determining whether to extend full retroactivity, the
              following factors are to be considered: First, the nature of the
              substantive issue overruled must be determined. If the issue
              involves a traditionally settled area of law, such as contracts or

                                              11

              property as distinguished from torts, and the new rule was not
              clearly foreshadowed, then retroactivity is less justified.
              Second, where the overruled decision deals with procedural law
              rather than substantive, retroactivity ordinarily will be more
              readily accorded. Third, common law decisions, when
              overruled, may result in the overruling decision being given
              retroactive effect, since the substantive issue usually has a
              narrower impact and is likely to involve fewer parties. Fourth,
              where, on the other hand, substantial public issues are involved,
              arising from statutory or constitutional interpretations that
              represent a clear departure from prior precedent, prospective
              application will ordinarily be favored. Fifth, the more radically
              the new decision departs from previous substantive law, the
              greater then need for limiting retroactivity. Finally, this Court
              will also look to the precedent of other courts which have
              determined the retroactive/prospective question in the same area
              of the law in their overruling decisions.

163 W.Va. at 332, 256 S.E.2d at 880, syl. pt. 5. Despite the adoption of these factors, this

Court noted in Bradley that “while general guidelines can be evolved to determine whether

retroactive or prospective application should be given to an overruling decision, it is difficult

to etch them with precision so that they will fit all cases.” Id. at 348, 256 S.E.2d at 888. The

Court ultimately found in favor of retroactivity of the new comparative negligence approach

of Bradley. Id. at 351, 256 S.E.2d at 890.



              Critically, the factors courts have adopted, such as those utilized by this Court

in Bradley, “are premised on the presumption that normally, our decisions will be given

retroactive effect. We employ the factors to determine whether equity requires a departure

from the norm.” Baatz v. Arrow Bar, 426 N.W.2d 298, 300 (S.D. 1988) (quoting Am.Jur.2d


                                               12

Courts § 233 (1965) (“the general rule in civil cases seems to be that unless the overruling

decision declares that it shall have only prospective effect, [ ] the judicial overruling of a

precedent has both prospective and retroactive effect.”)).5



              In applying the Bradley factors, this Court has “utilized principles of

retroactivity in certain cases when we have created new principles of law which have marked

a clear departure from our prior law.” City of Fairmont v. Pitrolo Pontiac-Cadillac Co., 172

W. Va. 505, 511, 308 S.E.2d 527, 533 (1983); see also Sitzes v. Anchor Motor Freight, Inc.,

169 W.Va. 698, 704, 289 S.E.2d 679, 683 (1982) (finding reversal to be “clearly

foreshadowed by our decisions . . . overruling other common law immunities, particularly

family immunities.”); Bond v. City of Huntington, 166 W.Va. 581, 276 S.E.2d 539 (1981).



              In reviewing the Bradley factors, as applicable to the present case, this Court

       5
       Similarly, in Plumley v. Hale, 594 P.2d 497 (Alaska 1979), the Alaska court aptly
explained:

              Absent special circumstances, a new decision of this court will
              be given effect in the case immediately before the court, and
              will be binding in all subsequent cases in which the point in
              question is properly raised, regardless of the fact that the events
              to which the law is applied occurred prior to the actual decision
              of the Court. In a number of our cases however, we have
              recognized that on occasion, the interests of justice may demand
              that a new rule of law only be applied prospectively.

Id. at 502 (footnote omitted).


                                              13

first examines the nature of the substantive issue overruled. Although the Cherrington

decision overruled prior cases to the extent they were inconsistent with the holding in

Cherrington, the definition of “occurrence,” particularly within the context of subcontractor

work performance, was not an entirely settled area of the law. For example, the Corder

decision held that “[p]oor workmanship, standing alone, cannot constitute an ‘occurrence.’”

210 W.Va. at 116, 556 S.E.2d at 83. This Court did not explain the meaning of “standing

alone” in Corder and did not address issues regarding defective work performed by a

subcontractor, as in Cherrington.6 Thus, as BPI argues, the prior holdings did not settle the

particular area of law addressed by this Court in Cherrington and presented in the current

case.



              The second Bradley factor is easily resolved in this case; this is a substantive

matter, rather than a procedural one which is generally more likely to be applied

retroactively. The third Bradley factor analyzes the impact of the decision, and we address

the issue of whether Cherrington has a relatively narrow impact and is likely to affect only

a few parties. As observed by this Court in Richmond v. Levin, 219 W.Va. 512, 637 S.E.2d


        6
        In Cherrington, this Court held that defective workmanship may qualify as an
occurrence allowing damages resulting from the defective workmanship. This Court also
held that although the “your work” exclusion in the CGL policy excludes coverage for the
insured contractor’s work, such exclusion did not apply where the work at issue was
performed by the insured’s subcontractor. See 231 W.Va. at 482, 745 S.E.2d at 520
(explaining that policy exclusion “specifically provides coverage for work performed by
subcontractors by excepting it from ‘your work’ exclusion[.]”).

                                             14

610 (2006), a concern that “retroactively would revive all cases decided before the decision

was reached” is not relevant. Id. at 518, 637 S.E.2d at 616. This contention was rejected in

Richmond, and this Court explained that “[t]he issue of retroactivity . . . is narrowly confined

to cases pending . . . when Louk [v. Cormier, 218 W. Va. 81, 622 S.E.2d 788 (2005)]7 was

decided.” 219 W.Va. at 518, 637 S.E.2d at 616. The Court in Richmond clarified that “we

are not aware of any prior ‘civil’ decision of this Court that was made retroactive to cases in

which the appeal period had expired.” Id. at 518-19, 637 S.E.2d at 616-17.8



                 In the present case, retroactive application of Cherrington would affect a

narrow portion of the law dealing specifically with insurance contracts where this type of

provision becomes pivotal, and Cherrington is a common law decision, overruling and

clarifying prior common law decisions that the Court believed to be flawed or incomplete.

As in Sitzes, applying the judicial decision retroactively would “affect only a limited number

of cases.” 169 W. Va. at 704, 289 S.E.2d at 683.



       7
           In Louk, this Court held that the Medical Professional Liability Act’s non-unanimous
jury verdict provision was unconstitutional. 218 W. Va. at 94, 622 S.E.2d at 801.
       8
        It is somewhat intriguing to note that a party in Richmond suggested the approach of
allowing a court to simply decide each question anew, presumably in the same manner as
previously decided, rather than choosing to characterize a prior judicial decision as
retroactive. 219 W.Va. at 516 n.5, 637 S.E.2d at 614 n.5. The assertion was made that “this
Court need not determine whether Louk applies retroactively, and could simply decide anew
whether or not the statute is constitutional.” Id. This Court responded: “We decline to
reinvent the wheel and will confine our analysis to the issue of retroactivity.” Id.


                                               15

              The fourth Bradley consideration is not particularly relevant to our inquiry in

this case because Cherrington did not represent a change in statutory or constitutional law.

Additionally, as addressed above, the Cherrington decision, while overruling prior cases to

the extent they were inconsistent, did not involve substantial public issues. It merely

addressed the narrow issue of whether faulty or defective workmanship could constitute an

“occurrence” under a CGL policy.



              Similarly, the fifth Bradley factor requires this Court to address how radically

the new decision departs from previous substantive law. As noted above and argued by BPI,

the Cherrington decision concerned faulty workmanship performed by a subcontractor. The

holding does not represent a radical departure from previous law in West Virginia or

throughout the country. This Court’s decisions prior to Cherrington did not directly address

the issue decided by Cherrington. The sixth Bradley factor is closely connected to that

inquiry, based upon the national recognition of evolving legal principles concerning whether

faulty workmanship of a subcontractor constitutes an occurrence. See Cherrington, 231

W.Va. at 479, 745 S.E.2d at 517 (“However, a majority of other states have reached the

opposite conclusion [that faulty workmanship may constitute an occurrence]).9 In other

       9
       The split in authority on this issue was readily apparent as early as 2003, as indicated
by United States Fidelity & Guarantee Co. v. Continental Casualty Co., 120 S.W.3d 556
(Ark. 2003). In that case, the court noted:

              [T]here is a split in the jurisdictions over whether defective
                                                                                 (continued...)

                                              16

jurisdictions applying recent changes regarding whether faulty workmanship constitutes an

“occurrence,” courts have applied the new principles to pending cases immediately. See,

e.g., Trinity Homes LLC v. Ohio Cas. Ins. Co., 864 F. Supp. 2d 744, 748 (S.D. Ind. 2012)

(observing that precedential landscape had been altered by Indiana Supreme Court’s new

judicial decision while case was pending and acknowledging that new principles regarding

faulty workmanship characterized as accident would be applied).



                 In the present case, we also consider the insurer’s reliance interests and find

      9
          (...continued)
                 workmanship is an accident and therefore an “occurrence”
                 which is covered under the terms of an insurance policy. See
                 Heile v. Herrmann, 136 Ohio App.3d 351, 736 N.E.2d 566
                 (1999); Pursell Construction, Inc. v. Hawkeye–Security Ins. Co.,
                 596 N.W.2d 67 (1999); Standard Fire Ins. Co. v. Chester-
                 O'Donley & Associates, Inc., 972 S.W.2d 1 (1998), R.N.
                 Thompson & Associates, Inc. v. Monroe Guaranty Ins. Co., 686
                 N.E.2d 160 (1997); United States Fidelity & Guaranty Corp. v.
                 Advance Roofing & Supply Co., Inc., 163 Ariz. 476, 788 P.2d
                 1227 (Ct. App. 1989) (all holding that faulty or defective
                 workmanship is not an accident and therefore not an
                 “occurrence” under the terms of an insurance policy). But see
                 Fidelity & Deposit Co. of Maryland v. Hartford Casualty Ins.
                 Co., 189 F.Supp.2d 1212 (D.Kan.2002); Colard v. American
                 Family Mutual Ins. Co., 709 P.2d 11 (Colo. App. 1985) United
                 States Fidelity & Guaranty Co. v. Bonitz Insulation Co. Of
                 Alabama, 424 So.2d 569 (1982) (all holding that faulty or
                 defective workmanship is an accident and therefore an
                 “occurrence” under the terms of an insurance policy).

120 S.W.3d at 563 n.4; see also Am. Empire Surplus Lines Ins. Co. v. Hathaway Dev. Co.,
707 S.E.2d 369, 371 (Ga. 2011) (acknowledging “trend in a growing number of
jurisdictions” to cover damage resulting from poor workmanship).

                                                17

they do not mandate a finding of prospectivity of the Cherrington decision. Although this

Court recognizes that retroactive application of Cherrington presents a degree of unfairness

to insurers who have presumably set their rates based upon a definition of “occurrence”

which differs from that announced in Cherrington, this “is a problem which is always

encountered when there is a change in the law brought about by judicial decision.” Suh v.

Pingo Corp., 736 P.2d 342, 348 (Alaska 1987) (Matthews, J., dissenting).



              Professor Keeton also addressed the effects on liability insurers and the process

of examining the competing interests involved in a retroactivity decision. His rationale for

retroactive overruling is persuasive:

              It is sometimes suggested that retrospective overruling in tort
              cases is unfair not only to the uninsured institutions but also to
              the liability insurers whose rates have been set in reliance on
              precedent and to the group of policyholders who will pay higher
              than the compensatory premiums in order to make up for the
              losses the insurers suffered by collecting inadequate premiums
              over the period to which the overruled decision retrospectively
              applies. But the implications of this view make it wholly
              unacceptable. First, its general acceptance would in effect
              disable courts from creative decisions in accident law. Second,
              the need for protection of the reliance interest is much less
              significant in this context than in the context of uninsured
              institutions, since the risk of disastrous impact upon a particular
              insurer is so much less serious. Some guarantee of this appraisal
              appears in the fact that ordinarily it is impossible to trace the
              impact of particular legal doctrines upon liability insurance
              rates. Also, even where the doctrinal change is one that might
              promptly affect rates, as in the case of overruling an immunity,
              a contrast between the reliance of an insurer and the reliance of
              an institution in not insuring remains. A single heavy judgment

                                              18
               against an uninsured hospital would be more likely to spell
               catastrophe than the number of such judgments that would fall
               on a single insurer. Moreover, there is a good prospect of the
               insurer’s spreading the loss among a group that comes fairly
               close to corresponding to the group of policyholders who might
               appropriately have been required to pay higher premiums if the
               overruling decision had been forecast.

Keeton, Creative Continuity in the Law of Torts, 75 Harv.L.Rev. 463, 492-93 (1962)

(emphasis added, footnote omitted).



               In the case sub judice, an exception to the general rule of retroactivity is not

warranted. This Court finds no reason to deviate from the conventional retroactivity precepts

in the present case, and this action was pending at the time Cherrington was decided. We

consequently hold that the determination regarding defective workmanship causing bodily

injury or property damage contained in Cherrington v. Erie Insurance Property & Casualty

Co., 231 W.Va. 470, 745 S.E.2d 508 (2013), should be applied retroactively to any pending

claim. Thus, any case that was not final at the time the Cherrington decision was rendered

should have the benefit of our holding in Cherrington. Based upon our holding that

Cherrington is retroactive to pending cases, the second certified question need not be

addressed.10




       10
          “‘In a certified case, this Court will not consider certified questions not necessary
to a decision of the case.” Syllabus Point 6, West Virginia Water Serv. Co. v. Cunningham,
143 W.Va. 1, 98 S.E.2d 891 (1957).” Syl. Pt. 7, Shell v. Metropolitan Life Ins. Co., 181
W.Va. 16, 380 S.E.2d 183 (1989).

                                              19

                                     IV. Conclusion

              The certified question having been answered, this case is remanded to the

United States District Court for the Southern District of Kentucky for further proceedings.



                                                               Certified question answered.




                                            20

