21st Jan 2021

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Fortuitous act – are construction and design defects fortuitous?

For an act or event to be covered under an insurance policy, it must be a “fortuitous” act. An act is fortuitous if it is contingent i.e. unknown to the parties at the inception of the loss. [Chadwick v. FIE (1993) 17 Cal. App. 4th 1112, 1119-1120] See § F44 FORTUITOUS [§ F44:01 In general].

Fortuity questions and issues

Can property damage resulting from a design defect ever be fortuitous? The answer is yes.

Is damage that has been caused before an issuance of the policy damage from a fortuitous act? The answer is probably yes. See discussions § C100 CONTINUOUS OR REPEATED EXPOSURE [§ C100:1.02 Construction defects spanning several policies]; § M14 MANIFESTATION OF DAMAGE [§ M14:4 Pre-existing non-manifesting defect covered]; § P103 PROGRESSIVE PROPERTY LOSS – FIRST PARTY; § S100 SUCCESSIVE LIABILITY POLICIES [§ S110: 2.2 Multiple successive policies; where property damage was “not known” before a policy period].

The above fact patterns can raise interesting coverage questions, but as long as knowledge or information regarding design defects or damage caused before the issuance of the policy are unknown to the insured, the requirement of “fortuity” is satisfied. [Chadwick v. FIE (1993) 17 Cal. App. 4th 1112, 1119-1120] See § C85 CONSTRUCTION DEFECTS [§ C85:9.11].

Fortuitous construction defects; illustrations

Illustrations of fortuitous defective design of a structure include the following:

1. Improper construction drawings failing to provide for appropriate shear transfer, improperly designed 2 x 12 joists addressing vertical loads.

2. Poor framing practices described in the drawings that were plainly visible from the crawl space in the structure. [Chadwick v. FIE (1993) 17 Cal. App. 4th 1112, 1116]

3. Deficient design and construction of structure floor and frame, including lack of proper contact and connection between structural members; deviations from the framing plans; use of a heavier header than called for and deviation from the flooring plans. [17 Cal. App. 4th 1112, 1115]

4. Negligent welding in a steel supporting system. [17 Cal. App. 4th 1112, 1120]

5. Property damage caused by a “misjudgment in design” causing collapse of part of the structure. [17 Cal. App. 4th 1112, 1120-1121]

6. Faulty design and construction of a brick wall. [17 Cal. App. 4th 1112, 1121]

7. A deficiently designed and constructed retaining wall. [17 Cal. App. 4th 1112, 1121

References in bold are to Mr. Cornblum’s text CALIFORNIA INSURANCE LAW DICTIONARY AND DESK REFERENCE, 2020 Edition, published by ThomsonReuters (1-800-344-5008) to order 3-Volume text). This text is also available to search on Westlaw.

Bruce Cornblum
16935 West Bernardo Drive, Suite 155
San Diego (Rancho Bernardo), California 92127
Telephone: 858-485-8770
Website: www.brucecornblum.com E-mail: cornblum@pacbell.net

Mailing Address:
PO Box 28536
San Diego CA 92198-0536

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