Nationwide Mutual Fire Insurance Company v. The David Group, Inc.Annotate this Case
Defendant Nationwide Mutual Fire Insurance Company ("Nationwide") appealed a judgment entered in favor of plaintiff The David Group, Inc. ("TDG"), which held TDG was entitled to coverage and indemnification under a commercial general- liability ("CGL") insurance policy issued by Nationwide. Under the terms of that CGL policy, Nationwide agreed to "pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies." According to the policy, its coverage applied to "bodily injury" and "property damage" only if "[t]he 'bodily injury' or 'property damage' is caused by an 'occurrence.'" In October 2006, while TDG's CGL policy with Nationwide was in effect, Saurin and Valerie Shah purchased a newly built house from TDG. After they moved in, the Shahs began experiencing problems with their new house. Despite TDG's efforts at correcting the problems, however, in February 2008, the Shahs sued TDG. Although Nationwide initially defended TDG against the Shahs' action, Nationwide withdrew its defense after conducting its own investigation into the Shahs' allegations. It concluded that it had no duty either to defend or to indemnify TDG because, according to Nationwide, the damage the Shahs complained of did not constitute an "occurrence" so as to trigger coverage under the CGL policy. The Alabama Supreme Court concluded the trial court erred in finding that TDG was entitled to coverage and indemnification under its CGL policy with Nationwide. Thus, the Court reversed the trial court's judgment and remanded the case for further proceedings.