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NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by E-mail at the following address: reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________

Merrimack No. 2009-699

CONCORD GENERAL MUTUAL INSURANCE COMPANY v. GREEN & COMPANY BUILDING AND DEVELOPMENT CORPORATION & a. Argued: May 4, 2010 Opinion Issued: September 17, 2010 Wiggin & Nourie, P.A., of Manchester (Gordon A. Rehnborg, Jr. and Mary Ann Dempsey on the brief, and Mr. Rehnborg orally), for the petitioner. Bouchard, Kleinman & Wright, P.A., of Hampton (Paul B. Kleinman and Shenanne R. Tucker on the brief, and Ms. Tucker orally), for respondent Green & Company Building and Development Corporation. McDonough, O'Shaughnessy, Whaland & Meagher, P.L.L.C., of Manchester (Robert G. Whaland on the brief and orally), for respondent Middlesex Mutual Assurance Company. CONBOY, J. In this declaratory judgment proceeding, respondent Green & Company Building and Development Corporation (Green) appeals an order of

the Superior Court (Brown, J.) denying its cross-motions for summary judgment and granting summary judgment in favor of the petitioner, Concord General Mutual Insurance Company (Concord General), and respondent Middlesex Mutual Assurance Company (Middlesex Mutual). The trial court found that there was no "occurrence" as defined by the insurance policies issued by Concord General and Middlesex Mutual and concluded, therefore, that coverage for Green's indemnification claims was not required under either policy. We affirm. The trial court found, or the record supports, the following facts. In March 2004, Green began a project in Lee, involving the construction of thirtyfour homes to be known as Thurston Woods. Green contracted with Birch Masonry to build the chimneys in each of the homes. Birch Masonry was insured by Middlesex Mutual. Birch Masonry requested that Green be added to the policy as an additional named insured, and Middlesex Mutual complied. Throughout the construction, Green held its own commercial general liability policy with Concord General. Soon after the homes at Thurston Woods were completed and sold, Green began receiving complaints about the chimneys, particularly regarding flue size. Green told the homeowners that it would make the appropriate repairs and bring the chimneys "to code." Eventually, however, the homeowners brought suits against Green in superior court. When the lawsuits were filed, Green made demand on Concord General to provide it with a defense and indemnification. Concord General agreed to provide Green with a defense pursuant to a reservation of rights. While the suits were pending, Green placed carbon monoxide detectors in each of the homes and discovered unacceptable levels of carbon monoxide in several of them. Green also began receiving complaints that flue gases were seeping into the homes because of the defective chimneys. Green hired an independent company to conduct tests on all of the chimneys, and in every case, it discovered one or more problems known to lead to the escape of carbon monoxide. Subsequently, Green either paid to have the defective chimneys repaired or reimbursed those homeowners who had already made repairs. After the repairs were made, the homeowners' lawsuits against Green were either settled or withdrawn. In the meantime, Concord General initiated this declaratory judgment proceeding against Green, Middlesex, and the homeowners to resolve the insurance coverage issues. After the homeowners' lawsuits were settled or withdrawn, the remaining parties filed motions and cross-motions for summary judgment. In arguing for summary judgment, Green argued, among other things, that the leaking carbon monoxide constitutes property damage and is therefore an "occurrence" under the policies. The trial court disagreed, and

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granted summary judgment in favor of Concord General and Middlesex Mutual. This appeal followed. On appeal, Green argues that the trial court erred in finding that the leaking carbon monoxide did not constitute property damage and was therefore not an "occurrence." "We review de novo the trial court's application of the law to the facts in its summary judgment ruling." Progressive N. Ins. Co. v. Concord Gen. Mut. Ins. Co., 151 N.H. 649, 652 (2005). "All evidence presented in the record, as well as any inferences reasonably drawn therefrom, must be considered in the light most favorable to the party opposing summary judgment." Id. "If our review of that evidence discloses no genuine issue of material fact and if the moving party is entitled to judgment as a matter of law, then we will affirm the grant of summary judgment." Id. Green argues that the carbon monoxide that seeped into the homes as a result of the faulty chimneys resulted in property damage and constitutes "occurrences" under both insurance policies. Concord General and Middlesex Mutual assert that the carbon monoxide caused no physical damage and that Green's claim is essentially for faulty workmanship, which they contend is not covered under the insurance contracts. "In a declaratory judgment action to determine the coverage of an insurance policy, the burden of proof is always on the insurer, regardless of which party brings the petition." Carter v. Concord Gen. Mut. Ins. Co., 155 N.H. 515, 517 (2007). "Our analysis necessarily begins with an examination of the policy language." Webster v. Acadia Ins. Co., 156 N.H. 317, 319 (2007). "The interpretation of insurance policy language is a question of law, which we review de novo." Id. "We construe the language as would a reasonable person in the position of the insured based upon a more than casual reading of the policy as a whole." Id. at 319-20. "Policy terms are construed objectively; where the terms are clear and unambiguous, we accord the language its natural and ordinary meaning." Id. at 320. Green's policy with Concord General and the Middlesex Mutual policy contain identical relevant language. Both policies provide coverage for "bodily injury" and "property damage" only if "[t]he `bodily injury' or `property damage' is caused by an `occurrence' . . . ." The policies define "occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." Under both policies "property damage" means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or

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b. Loss of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the "occurrence" that caused it. We have previously held that defective work, standing alone, does not constitute an occurrence. See Hull v. Berkshire Mut. Ins. Co., 121 N.H. 230, 231 (1981). This is because "[t]he fortuity implied by reference to accident or exposure is not what is commonly meant by a failure of workmanship." McAllister v. Peerless Ins. Co., 124 N.H. 676, 680 (1984). "Instead, what does constitute an occurrence is an accident caused by or resulting from faulty workmanship, including damage to any property other than the work product and damage to the work product other than the defective workmanship." 9A S. Plitt, D. Maldonado & J. Rogers, Couch on Insurance 3d

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