In a separate action, Lampasona's insurer, All America Insurance Company, sought a judgment declaring that it had no duty to defend or indemnify Lampasona under the commercial general liability (“CGL”) insurance policy that Lampasona had acquired from All America.

The trial court concluded that Lampasona's work on the concrete slab was inseparable from work that other subcontractors had performed on other layers of the flooring system. On that basis, the trial court determined that an exclusion under Section j(6) of the All America insurance policy applied, and it granted summary judgment in All America's favor.

The dispute reached the Massachusetts appeals court.

The All America Insurance Policy

The exclusion under Section j(6) of the All America insurance policy stated that the insurance did not apply to:

[t]hat particular part of any property that must be restored, repaired or replaced because “your work” was incorrectly performed on it.

The Appellate Court's Decision

The appellate court reversed.

In its decision, the appellate court explained that the Section j(6) exclusion exempts from coverage an insured contractor's faulty workmanship, but only with respect to “that particular part of the property subject to the faulty workmanship.” The appellate court pointed out that Lampasona did not install the vapor barrier under the concrete slab or the floor tiles or carpeting installed on top of the concrete slab. The appellate court then ruled that the alleged damage that Lampasona caused to those parts of the hospital property (for example, the piercing of the vapor barrier and the buckling of the floor tiles) did not fall within the Section j(6) exclusion. That was because, the appellate court reasoned, Lampasona's work on the concrete slab allegedly caused damage to other parts of the hospital “that were not part of its work.”

According to the appellate court, the fact that the vapor barrier, concrete slab, and floor tiles or carpeting fairly could be characterized as layers of an integrated flooring system was, by itself, “beside the point” for purposes of determining whether the Section j(6) exclusion applied. It ruled that where Lampasona was hired to install one layer of the flooring system but caused discrete damage to the other layers, that damage fell outside the Section j(6) exclusion.

The appellate court concluded that the Section j(6) exclusion, by its express terms, also did “not apply to damage that occurred after Lampasona completed its work.” Construing the facts in the light most favorable to the nonmoving party, NHC alleged that some of the damage occurred after the construction of the hospital, but that damage would not fall within the scope of the Section j(6) exclusion in any event.

The case is All America Ins. Co. v. Lampasona Concrete Corp., No. 18-P-247 (Mass. Ct. App. March 19, 2019). Attorneys involved include: Doreen M. Zankowski for Northeast Hospital Corporation. Michael F. Aylward for the plaintiff.