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Faulty work not 'accident,' state Supreme Court rules Friday, Mar 7, 2008 By John Lyon Arkansas News Bureau LITTLE ROCK - Faulty work by a contractor cannot be considered an accident, the state Supreme Court said Thursday in an answer to a question posed by a federal judge. Arkansas' highest court issued the answer in connection with a lawsuit that alleges faulty workmanship by a Little Rock contractor. Tom and Kara Baumgartner of Maumelle filed the suit in Pulaski County Circuit Court against John Holder, whom they hired in 2004 to build their new home and whose construction work they claim was defective. Holder demanded that his insurance carrier, Glen-Allen, Va.-based Essex Insurance, defend him in the suit. Essex responded by asking a federal judge to rule that it did not have to defend Holder or pay any judgment the circuit court might enter against him. The company argued that alleged defective workmanship did not constitute an "occurrence" that would be covered under Holder's insurance policies because the polices define an "occurrence" as an "accident," and faulty workmanship is not an accident. The Baumgartners argued that the term "accident" is not defined in the policies, so it should be interpreted liberally, and Essex should be required to pay any judgment. The U.S. District Court in Little Rock asked the state Supreme Court to answer the question of whether, under Arkansas law, faulty workmanship can be considered an accident. The court answered that it cannot, noting a 1976 ruling in an insurance case that an accident is commonly defined as an event that takes place without one's foresight or expectation. "Faulty workmanship is not an accident; instead, it is a foreseeable occurrence, and performance bonds exist in the marketplace to insure the contractor against claims for the cost of repair or replacement of faulty work," Justice Tom Glaze wrote for the court. |
