The ICA issued its decision on the duty to defend portion of the pending Group Builders appeal.
Bottom line on the crucial issue of whether the ICA would revisit or reexamine its decision that construction defects can never be "occurrences" and therefore cannot trigger insurance coverage:
1. The court noted its prior finding that construction defects can't be an "occurrence" triggering coverage, is not dispositive of the duty to defend question
2. At the time the trial court found a duty to defend in the underlying case, courts were split on whether construction defects could constitute an "occurrence" and therefore, there was a possibility of coverage.
3. Therefore, the trial court was correct in finding a duty to defend:
http://www.courts.state.hi.us/docs/opin_ord/ica/2013/April/ica29729mop
In other words, the court's ruling does not address or analyze its prior findings on what is an "occurrence" and instead goes around them to find a duty to defend based upon the law existing at the time of the denial of coverage. So, a fortiori, the court appears to be holding there is no defense coverage for denials issued post-Group Builders.
Tred will brief this case in greater detail at his insurance law blog.
