Appeal from the District Court for Douglas County: PETER C. BATAILLON, Judge.
John C. Brownrigg, Heather B. Veik, and Thomas J. Culhane, of Erickson & Sederstrom, P.C., L.L.O., for appellant.
John D. Stalnaker and Robert J. Becker, of Stalnaker, Becker & Buresh, P.C., for appellee.
IRWIN, MOORE, and RIEDMANN, Judges.
[22 Neb.App. 362]
Columbia National Insurance Company (Columbia) appeals from the order of the Douglas County District Court denying its motion for summary judgment and entering judgment in favor of Cizek Homes, Inc. (Cizek). Finding that the claims settled did not arise out of an " occurrence" as that term is defined in Columbia's commercial general liability (CGL) policy issued to Cizek, we reverse, and remand with directions to enter judgment in favor of Columbia.
Cizek is a building contractor that has been in the home building business for nearly 40 years. In 1995, Cizek [22 Neb.App. 363] purchased a parcel of real estate known as Lot 75. In 2003, Cizek sold Lot 75 to Carl and Zoe Riekes and constructed a residence thereon. In 2006, the Riekeses notified Cizek that the soil beneath the residence was settling and causing physical damage to their residence. Cizek monitored the settling, and in June 2007, an engineer determined that the settling had ceased.
During this process, Cizek notified Columbia, its insurance carrier, of the claim. Columbia denied any coverage associated with the Riekeses' claim for damage to the residence. When the Riekeses decided on a method of repairing the damage to their home, they presented a settlement agreement to Cizek to complete the repairs, and in the event Cizek did not agree to complete the repairs, the Riekeses presented a draft complaint that they intended to file against Cizek for breach of contract and negligence. The draft complaint contained allegations that negligence and faulty workmanship had purportedly caused the damage to the home.
Cizek reached a settlement with the Riekeses prior to the filing of the underlying complaint, and it completed the repairs to their home. In the settlement agreement, the parties described the Riekeses' claim as one " for damages to the Residence due to soil conditions and/or improper construction of the Residence by [Cizek], which claims [Cizek] denies." Cizek submitted the claim to Columbia, which again denied coverage for the cost of the repairs, claiming that the damages did not arise from an " occurrence" as that term was defined in the CGL policy.
According to the terms of the CGL policy, Columbia agreed to " pay those sums that [Cizek] becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies." The insurance applies to " 'bodily injury'" or " 'property damage'" only if the " 'bodily injury'" or " 'property damage'" is caused by an " 'occurrence'" that takes place in the " 'coverage territory.'" The policy defines " '[o]ccurrence'"
as " an accident, including [22 Neb.App. 364] continuous or repeated exposure to substantially the same general harmful conditions."
The policy also included an exclusion entitled " Recall Of Products, Work Or Impaired Property." This provision excluded ...