California Supreme And Appellate Court
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Construction Law

CONSTRUCTION LAW

Construction Law Case Summaries
■ Freedman v State Farm Ins Co B202617

A contractor remodeling a bathroom in Bernard and Gail Freedman’s home drove a nail through a pipe while hanging new drywall.  The nail in the pipe apparently caused no leak at the time and went unnoticed until years later, when corrosion around the nail caused a leak and extensive water damage.  The Freedmans’ insurer, State Farm Insurance Company, denied their claim.  The Freedmans filed suit, and the parties filed cross-motions for summary judgment on the basis of jointly stipulated facts.  The superior court granted State Farm’s motion, denied the Freedmans’, and entered judgment for the defense.

The Freedmans timely appealed, arguing that the contractor’s negligence is the efficient proximate cause of their loss and that it is a covered peril, so the loss is covered.  We conclude, however, that the Freedmans’ argument is based on a form of analysis that has been superseded by the Supreme Court’s decision in Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747 (Julian).  We therefore affirm.

■ Held:  

In a dispute over insurance liability coverage, trial court's grant of summary judgment for defendant is affirmed where: 1) the court properly concluded that the third-party negligence provisions of the insurance policy are enforceable, and thus the policy provides no coverage for the third-party negligence at issue; 2) plaintiff's arguments that defendant cannot deny coverage on the basis of the exclusion for continuous or repeated seepage or leakage of water are not persuasive; and 3) the mold damage to plaintiff's property was not covered under the mold endorsement of the policy as it was not caused by either a specified peril under their personal property coverage or a peril not otherwise excluded
Freedman v. State Farm Ins.-B202617-  5/5/09 CA2/1
Freedman v. State Farm Ins.-B202617-  5/5/09 CA2/1-pdf

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