On January 7, 2011 the South Carolina Supreme Court issued its decision in Crossman Communities v. Harleysville Insurance. The court’s ruling was that builders’ commercial general liability (CGL) policy of insurance was inapplicable where no “occurence” in the case of water intrusion and construction defect cases in South Carolina not the result of an “accident” or “fortuity”. The decision resulted in the filing of twelve (12) Amicus Briefs from various groups and interested parties from across the state of South Carolina.

On April 21, 2011 the state legislature passed S.431 in response to the court’s decision, and Governor Nikki Haley on May 17, 2011 signed the bill into law. The new legislation provided a new definition of “occurence”, providing that “property damage …resulting from faulty workmanship, exclusive of the faulty workmanship itself” qualifies as an occurence.

On May 23, 2011, the South Carolina Supreme Court heard oral arguments in the rehearing of its January 7, 2011 decision, Crossmann Communities. Including the direct parties to the case, Harleysville Mutual Insurance Company and Crossmann Communities/Beazer Homes, the court permitted arguments from a number of groups who submitted amicus briefs advocating for the opinion to be reversed or modified to eliminate the “fortuity” component of the court’s prior decision. Halford’s amicus brief advocated the perspective of the home buyer and owner arguing that “occurence” should be broadly defined by the court to include progressive cases not characterized by sudden or acute onset, accident, or fortuity.

Whether the decision of the Supreme Court will stand as written remains is yet to be determined. For now, however, the May 23, 2011 decision of our Supreme court reversed the “fortuity” component, and adopted a “Time of on the Risk” analysis applicable to builders and subcontractors with regard to construction cases in South Carolina. The case is available for review at www.sccourts.org.