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Friday, December 17, 2010

Ind. Decisions - Well, we have another opinion from the Supreme Court

In Sheehan Construction Company v. Continental Casualty, a 6-page, 5-0 opinion on a petition for rehearing, Justice Rucker writes:

Indiana Insurance seeks rehearing of this Court’s opinion in which we determined that damage caused by faulty workmanship may be covered under a standard Commercial General Liability (CGL) policy. See Sheehan Constr. Co. v. Cont’l Cas. Co., 935 N.E.2d 160 (Ind. 2010). More particularly, on a claim for indemnification made by Sheehan Construction Company and a Class of homeowners (hereafter “Sheehan”) against various insurance carriers including Indiana Insurance, the trial court entered summary judgment in favor of the insurance carriers. Among other things the trial court determined that under the terms of the CGL polices there was no “occurrence” or “property damage” and thus there was no coverage. Sheehan appealed and the Court of Appeals affirmed the judgment of the trial court. See Sheehan Constr. Co. v. Cont’l Cas. Co., 908 N.E.2d 305 (Ind. Ct. App. 2009). Because the Court of Appeals affirmed the trial court’s judgment on the issue of coverage, it did not address Indiana Insurance’s alternative argument that summary judgment should also be affirmed on grounds that Sheehan provided untimely notice of its claims. We granted transfer thereby vacating the Court of Appeals opinion, see Indiana Appellate Rule 58A, and reversed the judgment of the trial court. In so doing we addressed what we characterized as the “main issue” in the case, namely: “whether a standard commercial general liability (“CGL”) insurance policy covers an insured contractor for the faulty workmanship of its subcontractor.” Sheehan Constr. Co., 935 N.E.2d at 162. We did not address the timeliness of Sheehan’s notice. Indiana Insurance appropriately filed a petition for rehearing which we now grant so that this issue may be addressed. * * *

In this case Sheehan conceded it did not give Indiana Insurance timely notice of Sheehan’s claims under the CGL policy. Because prejudice to the insurer was therefore presumed, Indiana Insurance carried its initial burden of demonstrating it had no liability to Sheehan under the policy of insurance. Sheehan has not directed this Court to any evidence it presented to the trial court rebutting the presumption of prejudice. Thus the trial court properly granted summary judgment in favor Indiana Insurance on this point.

We grant rehearing and modify our original opinion as set forth herein. In all other respects the original opinion is affirmed.

Posted by Marcia Oddi on December 17, 2010 05:09 PM
Posted to Ind. Sup.Ct. Decisions