                                UNPUBLISHED

                     UNITED STATES COURT OF APPEALS
                         FOR THE FOURTH CIRCUIT


                                No. 07-1525


TRAVELERS INDEMNITY       COMPANY   OF   AMERICA;   THE    TRAVELERS
INDEMNITY COMPANY,

                  Plaintiffs - Appellees,

COLONY INSURANCE COMPANY; DONEGAL GROUP, INCORPORATED,

                  Defendants – Appellees,

           and

FOUNDATIONS      UNLIMITED,   INCORPORATED;    NICHOLAS    JOHN   ALAN
WHITE,

                  Defendants,

           v.

TOWER-DAWSON, LLC,

                  Defendant – Appellant.



Appeal from the United States District Court for the District of
Maryland, at Baltimore.     William D. Quarles, Jr., District
Judge. (1:05-cv-02644-WDQ)


Argued:   September 24, 2008                  Decided:    October 31, 2008


Before WILKINSON, Circuit Judge, HAMILTON, Senior Circuit Judge,
and James C. CACHERIS, Senior United States District Judge for
the Eastern District of Virginia, sitting by designation.


Affirmed by unpublished per curiam opinion.
ARGUED: Michael Evan Jaffe, THELEN, REID, BROWN, RAYSMAN &
STEINER, L.L.P., Washington, D.C., for Appellant. Lee Hedgecock
Ogburn, KRAMON & GRAHAM, Baltimore, Maryland, for Appellees. ON
BRIEF: Todd J. Wagnon, THELEN, REID, BROWN, RAYSMAN & STEINER,
L.L.P., Washington, D.C., for Appellant. Stuart M. G. Seraina,
KRAMON & GRAHAM, Baltimore, Maryland, for Appellees Travelers
Indemnity Company of America and The Travelers Indemnity
Company; Laura Campbell Walters, DRECHSLER, LARKIN & WALTERS,
P.C.,   Baltimore,  Maryland,   for  Appellee  Colony  Insurance
Company; Michael B. Mann, MANN & CASEY, P.A., Towson, Maryland,
for Appellee Donegal Group, Incorporated.


Unpublished opinions are not binding precedent in this circuit.




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PER CURIAM:

     Tower-Dawson, LLC (Tower), the developer of The Villages at

Tower Oaks (Tower Oaks), a residential development in Rockville,

Maryland, appeals the district court’s grant of summary judgment

on   its   claim   that     Travelers    Indemnity      Company    of   America,

Travelers     Indemnity     Company,     Colony      Insurance    Company,     and

Donegal Group (collectively the Insureds) had an obligation to

indemnify     Foundations     Unlimited,      Inc.    (Foundations)     for   the

costs incurred by Tower in installing a new retaining wall in

front of the defective one Foundations installed in Tower Oaks

and for the costs to repair federally-protected wetlands located

adjacent to Tower Oaks which were damaged by Tower during its

installation of the new retaining wall.                 For the reasons that

follow, we affirm.



                                        I

     The    Insureds   issued     commercial      general     liability      (CGL)

policies (the Policies) to Foundations, covering a time period

beginning on August 28, 1995 and ending on August 28, 2003.                    The

Policies    provided   coverage    for      damages   that   Foundations      owed

because     of   “property     damage”      caused     by    an   “occurrence.”

Property damage is defined as either a “[p]hysical injury to

tangible property, including all resulting loss of use of that

property” or “[l]oss of use of tangible property that is not


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physically injured.”               Occurrence is defined as “an accident,

including continuous or repeated exposure to substantially the

same general harmful conditions.”

       The Policies’ grant of coverage for property damage caused

by    an    occurrence       is     limited    by   a    “your       work”     exclusion.

Specifically, the your work exclusion provides that coverage to

the named insured, in this case Foundations, does not apply to

“‘property damage’ [due] to ‘your work’ arising out of it or any

part of it.”

       In    August    1995,        Tower     contracted      with     Foundations      to

construct a 770-foot retaining wall at Tower Oaks.                           Construction

began       shortly    thereafter,          and     Foundations         completed      the

retaining wall some time in 1996.

       In 2001, the retaining wall began to show signs of failure,

and    eventually      a   seventy-foot        section     of   the     retaining      wall

collapsed      in     2003,       causing     damage     to     several       homeowners’

property      and     federally-protected           wetlands         adjacent    to    the

development.

       In    order    to     prevent    further     damage      to     the    homeowners’

property and the federally-protected wetlands adjacent to the

development, Tower stabilized the area around the retaining wall

by    installing      wood    and    gravel    bracing.         Once    the    slope   was

stabilized, Tower constructed a new retaining wall immediately

in front of the defective one.                 With the two retaining walls in


                                            - 4 -
place, the land both above and below the walls was stabilized.

To construct the new retaining wall, Tower decided to access the

site through the federally-protected wetlands, but this caused

further damage to those wetlands.                 Following the construction of

the new retaining wall, Tower repaired the homeowners’ property

and remediated the federally-protected wetlands.                         For the costs

it   incurred,     Tower    instituted      arbitration         proceedings     against

Foundations, which resulted in an award to Tower in the sum of

$2,015,603, an amount which has not been paid.

       Travelers     Indemnity       Company       of       America     and   Travelers

Indemnity     Company       (collectively         Travelers)          instituted     this

declaratory judgment action, seeking a declaration that it had

no   duty   under    the    CGL    policies       it   issued      to   Foundations    to

indemnify Tower for any portion of the arbitration award Tower

obtained against Foundations.                Travelers joined as defendants

Colony Insurance Company and Donegal Group, each of whom filed

counterclaims seeking a declaration that their policies did not

require     them    to      indemnify      Tower       in    connection       with    the

arbitration award.

       On cross-motions for summary judgment, the district court

held that the Insureds were obligated to indemnify Tower for

some   of   its    costs,    but    not    others.          More   specifically,      the

district court held that the damage to the homeowners’ property

and the federally-protected wetlands caused by the collapse of


                                          - 5 -
the   original   retaining   wall    was    a   covered   loss   under   the

Policies.     The district court also held that the cost of the

emergency bracing was a covered loss as well, concluding that

the cost was incurred to prevent imminent or further damage to

third party property.     The district court held that the cost of

installing the new retaining wall was not a covered loss under

the Policies because it was not caused by an occurrence or,

alternatively, the loss was barred by the “your work” exclusion.

Finally, the district court held that the cost of repairing the

further damage to the federally-protected wetlands brought about

by the installation of the new retaining wall was not a covered

loss because the loss was not accidental.

      Tower appeals the portion of the district court’s decision

adverse to its interests.     The Insureds have not challenged any

portion of the district court’s decision.



                                     II

      We review de novo the district court’s grant of summary

judgment.   Ellis v. Metro. Life Ins. Co., 126 F.3d 228, 232 (4th

Cir. 1997).      We will affirm the district court’s decision “if

the pleadings, the discovery and disclosure materials on file,

and any affidavits show that there is no genuine issue as to any

material fact and that the movant is entitled to judgment as a

matter of law.”     Fed. R. Civ. P. 56(c).        We view the record and


                                    - 6 -
all   reasonable   inferences    drawn   therefrom   in    the    light   most

favorable to the nonmoving party, here Tower.             Williams v. Giant

Food Inc., 370 F.3d 423, 428 (4th Cir. 2004).

      On appeal, Tower argues that the district court erred when

it determined that the cost of installing the new retaining wall

and the cost of repairing the damage to the federally-protected

wetlands brought about by the installation of the new retaining

wall were not covered losses under the Policies.                 In resolving

this argument, we apply Maryland’s substantive law regarding the

interpretation of an insurance policy, which the parties agree

applies to this case.     French v. Assurance Co. of Am., 448 F.3d

693, 700 (4th Cir. 2006).       Under Maryland law,

      [a]n insurance policy is interpreted in the same
      manner as any other contract. Maryland courts do not
      follow the rule that an insurance policy must be
      strictly construed against the insurer. The principal
      rule in the interpretation of contracts is to effect
      the intentions of the parties.      When a contract’s
      wording is clear, the court will presume that the
      parties intended what they expressed, even if the
      expression differs from the parties’ intentions at the
      time they created the contract.         If reasonably
      possible, effect must be given to every clause and
      phrase of a contract, so as not to omit an important
      part of the agreement.

Nationwide Ins. Co. v. Rhodes, 732 A.2d 388, 390-91 (Md. Ct.

Spec.   App.   1999)   (citations     and   internal      quotation       marks

omitted).

      The Policies provided coverage for damages that Foundations

owed because of “property damage” caused by an “occurrence.”


                                   - 7 -
The Policies define an “occurrence” as “an accident, including

continuous       or    repeated         exposure     to     substantially          the    same

general harmful conditions.”

       Under Maryland law, in order for there to be an occurrence

under a CGL policy, there must be an accident.                          Lerner Corp. v.

Assurance Co. of Am., 707 A.2d 906, 911 (Md. Ct. Spec. App.

1998).      Typically,          a    CGL   policy    does    not    define     there      term

accident.        French, 448 F.3d at 698.                   However, under Maryland

law, “an act of negligence constitutes an ‘accident’ under a

liability insurance policy when the resulting damage takes place

without the insured’s actual foresight or expectation.”                             Id.

       Our decision in French is instructive on the question of

what    constitutes      an         accident    under     Maryland     law.        There,    a

contractor       built      a    single     family      home     for   the    appellants.

Pursuant to the parties’ contract, the exterior of the home was

clad    with   a      synthetic        stucco    system     known      as    the    Exterior

Insulating Finishing System (EIFS).                       Id. at 696.         Nearly five

years after the home was completed, the appellants discovered

extensive moisture and water damage to the walls of their home,

resulting from the defective cladding of the home with the EIFS.

Id.     The appellants spent over $500,000 to correct the defects

in the EIFS exterior of the home and to remedy the resulting

damage to the otherwise nondefective structure and walls of the

home.      Id.        The       appellants      brought     an     action     against      the


                                            - 8 -
contractor, and the question before this court was whether the

contractor’s insurer was required to cover the claim under the

contractor’s CGL policy.         Id.

     Applying Maryland law, we concluded that the insurer was

required to cover any unexpected property damage that occurred

to something other than the defective object as a result of the

defective object, but the insurer was not required to cover any

damage to the defective object itself:

     [I]f the defect causes unrelated and unexpected
     property damage to something other than the defective
     object itself, the resulting damages . . . may be
     covered. For example, if a collapse of [a] veneer had
     injured a user of the facility or damaged property
     other than the veneer itself, these may well be
     covered.

Id. at 702 (alterations and internal quotation marks omitted).

     Thus,   when    there      is     no   property    damage    “to     otherwise

nondefective parts of [a] building,” there is no “accident” or

“occurrence.”       Id.   at    703.        Thus,   coverage   exists     only   “to

remedy   unexpected       and    unintended         property     damage    to    the

contractor’s otherwise nondefective work-product caused by the

. . . defective workmanship.”               Id. at 706.        And if a product

does not meet the contract requirements of a sale, it should not

be unforeseen that “the purchaser will be entitled to correction

of the defect.”     Id. at 702.

     The Maryland Court of Appeals’ decision in Woodfin Equities

Corp. v. Harford Mutual Insurance Co., 678 A.2d 116 (Md. Ct.


                                        - 9 -
Spec. App. 1996), overruled in part on procedural grounds, 687

A.2d 652 (Md. 1997), also is instructive on the question of what

constitutes an accident under Maryland law. ∗                       In that case, a

hotel hired the insured to install a Heating, Ventilation, and

Air Conditioning (HVAC) system.               Id. at 118-19.         The HVAC system

was defective, and carpeting and drywall had to be destroyed to

remedy    the    defect.      Id.    at      121,    131.     The    insured    sought

coverage    for     the   costs   of    the    carpeting      and    drywall.      The

Maryland Court of Special Appeals found that the insurer was not

required    to    cover     the     property        damage    because    pulling    up

carpeting and breaking through drywall to access the HVAC system

was   not   property       damage,     but    rather    the    “cost    incurred    in

replacing and repairing the HVAC systems.”                    Id. at 132 n.8.      The

Woodfin     court     further       explained:        “Voluntarily      pulling    up

carpeting or breaking through dry-wall to access the HVAC units

is not property damage. . . .                 Even if it could be considered

‘property damage,’ we would hold that it was not caused by an

‘occurrence,’ because the so-called damage was not accidental.”

Id.

      Under these authorities, it is evident that the cost of

installing the new retaining wall and the cost of repairing the

      ∗
       Even though Woodfin was overruled on procedural grounds,
Maryland courts continue to find “Woodfin instructive on the
interpretation of CGL policies generally.”   Lerner Corp., 707
A.2d at 910.


                                       - 10 -
damage to the federally-protected wetlands brought about by the

installation of the new retaining wall are not covered losses

under the Policies.        With regard to the installation of the new

retaining wall, Foundations’ contractual obligation to Tower was

to furnish a retaining wall, one capable of protecting the land

both above and below the retaining wall.               The original retaining

wall    did   not   fulfill   this   purpose     and   needed    to   be   either

repaired or replaced.         The correction of the defective retaining

wall,    either     by   replacing   the      original    retaining    wall    or

installing a new one, simply was not unforeseen, just like it

was not unforeseen in French that the EIFS exterior would have

to be replaced as it was not capable of keeping moisture and

water out of the appellants’ home.

       With regard to the cost of repairing the damage to the

federally-protected wetlands brought about by the installation

of the new retaining wall, these costs are not covered losses as

well.    This damage was not caused by an accident; rather, it was

caused by the intentional act of Tower.              Just like the carpeting

and drywall that had to be removed or destroyed in Woodfin to

remedy the defect in the HVAC units, the further damage to the

federally-protected wetlands was necessary to correct the defect

(inability     to   protect    the   land     both     above    and   below   the

retaining wall) in the original retaining wall.




                                     - 11 -
       In   an     attempt     to     make   an    end-run       around       these    well-

established authorities, Tower states that the outcome of this

case is controlled by Aetna Ins. Co. v. Aaron, 685 A.2d 858 (Md.

Ct. Spec. App. 1996).                 In that case, the Maryland Court of

Special Appeals addressed whether remediation expenses incurred

in connection with the insured homeowner’s own property were

covered     losses     under    a     homeowner’s        insurance      policy    covering

property damages, even though the policy contained an “owned

property” exclusion, which provided that coverage did not apply

if the property damage was to “property owned by the insured.”

Id.   at    860.       The    Aaron    court      held    that    the   owned     property

exclusion        did    not     preclude       coverage          for    the      costs      of

preventative measures undertaken on the insured’s property to

prevent imminent damage to third-party property.                        Id. at 866-70.

       Aaron is of no help to Tower.                 Aaron did not involve a CGL

policy that provided for coverage for damages that were caused

by an “occurrence.”             The inclusion of the occurrence provision

brings into play the well-settled Maryland law construing what

constitutes an accident in the construction context.                           If we were

to    accept     Tower’s      invitation     to    apply     Aaron      outside       of   the

homeowner’s context and in the construction context, we would

turn the Maryland law on what constitutes an occurrence on its

head, as redoing the insured contractor’s work routinely has the

effect of preventing further or imminent damage to third-party


                                         - 12 -
property.      We also note that the Court of Appeals of Maryland

has rejected a claim for coverage under a similar CGL policy to

the   one   in   our   case    for   measures   taken   to     avoid    imminent

property damage in the construction context.             See W.M. Schlosser

Co., Inc. v. Ins. Co. of North America, 600 A.2d 836, 840 (Md.

1992)   (“We     conclude     that   under   Maryland   law,    the    liability

policy at issue here [which defines occurrence as an accident]

did not provide coverage for the preventive costs incurred by

Schlosser.”).



                                       III

      For the reasons stated herein, the judgment of the district

court is affirmed.

                                                                        AFFIRMED




                                      - 13 -
