Last week's Pennsylvania Superior Court decision, in Knoblich v. Erie Ins. Co., No. 2282 EDA 2023 (Pa. Super. Ct. Aug. 5, 2024), is like the countless that have come before it, concluding that, under Pennsylvania law, no coverage is owed for damages caused by an insured's faulty workmanship – and then some – because it is not an "occurrence."  I usually don't report on these decisions in Coverage Opinions because they generally do not offer anything new.

While Knoblich's holding is what you would expect, I decided to give it a brief mention here for a couple of reasons.

The case involved a geothermal heating and cooling system, newly installed in a home, that went on the fritz and led to different temperatures in rooms – by as much as 40 degrees.  Efforts by the insured-installer to fix it were not successful.  The homeowner had to hire a new HVAC company to remove and replace the home's old ductwork to properly install the system. 

The homeowner sued the installer, its commercial general liability insurer disclaimed, coverage litigation ensued and a Monroe County, Pennsylvania trial court held that no coverage was owed.  As you'd expect, the court concluded – after discussing the decisions in Kaverner, Gambone and Indalex; the Pennsylvania trifecta of CD coverage law -- that faulty workmanship is not an "occurrence" and no coverage was owed. 

The Superior Court affirmed: "In the instant case, there was no triggering 'occurrence' under the Erie policy to require it to defend or indemnify M&M where the defective work performed by M&M caused the heating problems. Thus, all consequential damages that followed were not a fortuitous or accidental event triggering Erie's duty to defend or indemnify."

Despite this being a dog bites man case, I gave it a shout-out here – especially since I know that this Pennsylvania CD issue is followed by a lot of CO readers.

First, Knoblich is not a traditional defective construction case, such as a contractor improperly installing windows or a roof.  Rather, here, the insured installed a system or component into a home.  This does not make a difference when it comes to Pennsylvania law and faulty workmanship not being an "occurrence."  But, since the facts are of a less common variety, I thought I'd mention the case here.

Second, albeit unpublished, the decision is from the Superior Court.  With a sea of faulty workmanship/"occurrence" cases from Pennsylvania federal courts, one from Pennsylvania's appeals court is worth a mention.