How will courts determine the number of occurrences in construction defect cases?

There is not much case law in Florida which addresses how a court will determine the number of  “occurrences” when it comes to applying the each “occurrence” limit in the context of construction defects. 

However, in Southern- Intern. Corp. v. Poly-Urethane, 353 So. 2d 646 (3rd DCA 1977), the Third DCA does address this issue.

In Southern- Intern. Corp , Poly-Urethane entered into a contract with Southern Intern Corp., for the application of a poly-urethane sealant to the roofs of part of a condominium complex known as Palm West Gardens. Pursuant to the contract, Poly-Urethane applied this sealant to the roofs of several buildings. Several months later, the tenants in these buildings began experiencing roof leaks. 

Southern Intern Corp. brought suit against Poly Urethane for the damages due to the leaking roofs. Poly Urethane was insured under a policy of insurance issued by Foremost Insurance Company. The policy provided coverage in the amount of $10,000, per occurrence and $25,000, for the “aggregate.” 

Poly Urethane did not contest liability for the damages, nor was it contested that the damages were covered under the Foremost policy. The dispute was whether the leakage of each roof constituted a separate occurrence, triggering the aggregate limit, or whether the damages to the complex, as a whole, constituted one occurrence, subject to the single $10,000, per occurrence limit. 

Southern Intern Corp. argued that because several roofs were sealed pursuant to the contract, the leakage of each roof was a separate occurrence. Foremost argued that the application of the sealant to the several roofs under a single contract constituted one event, thus, the damages were the result of a single “occurrence,” as defined by the policy. The policy defined “occurrence” as:

“For the purposes of determining the limit of the company’s liability, all bodily injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions, shall be considered as arising out of one occurrence.”

The Third DCA noted that it was unable to locate any case law on point on this issue of whether, under the facts of this case, the application of the sealant to all roofs constituted a single “occurrence.” However, after looking at case law from other jurisdictions, the Third DCA found that the trial court properly held that Poly Urethane’s application of sealant to several roofs under a single contract constituted a single “occurrence” under the policy. 

Therefore, under Florida law damage to several buildings may be considered just one “occurrence” if the damage is the result of exposure to the same harmful cause.