Westfield Insurance Co. v. National Decorating Service, Inc., No. 16-1439 (7th Cir. 2017)Annotate this Case
A newly-constructed multi‐story condominium building suffered water damage, allegedly caused by the painting subcontractor, National, failing to apply an adequate coat of sealant to the exterior. In Illinois state court, the condominium association sued the general contractor, developer, and subcontractors. The defendants tendered the defense to Westfield, National’s insurer, Westfield filed a federal action seeking a declaration that it owed no duty to defend in the underlying action. The district court determined that the complaint triggered Westfield’s duty to defend. The Seventh Circuit affirmed the grant of summary judgment, rejecting an argument that failure to apply an adequate amount of paint cannot be considered an “accident” that would constitute a covered “occurrence” under the policy. Westfield also argued that because the damage is to the building itself, which was a new construction and not an existing structure, the association has not demonstrated that there was property damage that is subject to its policy. The policy defines “occurrence” to include the “continuous or repeated exposure to substantially the same harmful conditions,” so the allegation that National acted negligently was sufficient under Illinois law to constitute an “occurrence.” National’s actions allegedly damaged parts of the building that were outside of the scope of its work, so the complaint alleges potentially covered property damage sufficient to invoke the duty to defend.