WPC Ӛ/ G_CHV: 4;y%[L*:UψwQCۏ=絺!b0)3nAb 8T|hG/J掗`]j&U!!t7V dKO andHollyK.Lillard,J.,joined. .~ MatthewR.Zenner,Nashville,Tennessee,forappellant,BlakeIndustries,Inc. ^ JamesI.Pentecost,Jackson,Tennessee,forappellee,GeneralAgentsInsuranceCompanyof  > America,Inc. !.  U OPINION #XX꫄#XX #" #XX꫓ #  XX  BlakeIndustries,Inc.,(hereinafter, Blake),isacompanythatinstallsandserviceswater % $ treatmentequipment.OnMay5,1996,Blakepurchasedacommercialgeneralliabilityinsurance &!% policy(hereinafter, CGLpolicy),fromGeneralAgentsInsuranceCompanyofAmerica,Inc., ~'"& (hereinafter, GAINSCO).ThepolicywastorunfromMay5,1996,untilMay5,1997. n(#' Ѐ̀Policyprovisionsrelevanttothecaseareasfollows: N*%) 8  8`    COMMERCIALGENERALLIABILITYCOVERAGEFORM.,~'+` x` x  -n(,    ....  8  COVERAGEA.BODILYINJURYANDPROPERTYDAMAGELIABILITY   ̀8  1.InsuringAgreement.p   8   ` a.8   Wewillpaythosesumsthattheinsuredbecomes P  legallyobligatedtopayasdamagesbecauseof @   bodilyinjuryor propertydamagetowhichthis 0  insuranceapplies.Wewillhavetherightanddutyto  p  defendany suitseekingthosedamages.Wemayat `  ourdiscretioninvestigateany occurrenceandsettle P  anyclaimor suitthatmayresult....@    8  8`   .... ` x` x 8  2.Exclusions.   8  8`   Thisinsurancedoesnotapplyto:` x` x 8  8`   ....` x` x 8  8`   j.0 ` x` x Propertydamageto:` x x    `  .... @ 8  8`    (5)8` x` xThatparticularpartofrealpropertyon  p whichyouoranycontractorsor ` subcontractorsworkingdirectlyor P indirectlyonyourbehalfare @ performingoperations,ifthe property 0 damagearisesoutofthose   operations;or! 8  8`    (6)8` x` xThatparticularpartofanyproperty "  thatmustberestored,repairedor #! replacedbecause yourworkwas $" incorrectlyperformedonit.% # 8   `  ....`'"%   8  8`   k. Propertydamageto yourproductarisingoutofitoranypart @)$' ofit.0*%(` x` x    +p&) 8  8`   l. Propertydamageto yourworkarisingoutofitoranypartof   itandincludedinthe productscompletedoperationshazard.` x` x   Thepolicyalsoincludedthefollowingendorsement:  8  Thisendorsementmodifiesinsuranceprovidedunderthefollowing:`    8  8`    ` x` x 8  8`   COMMERCIALGENERALLIABILITYCOVERAGEPART.@ ` x` x 8      8  Thisinsurancedoesnotapplyto bodilyinjuryor propertydamageincluded  p  withinthe productscompletedoperationshazard.8@  8  `    ̀Pertinentdefinitionssetforthinthepolicyareasfollows: @  8  5.8`   "Impairedpropertymeanstangibleproperty,otherthan your   productor yourwork,thatcannotbeusedorislessuseful  because:` x` x 8  8`   a.8 ` x` xItincorporates yourproductor yourworkthatis  knownorthoughttobedefective,deficient,  inadequateordangerous;or   8  8`   b.0 ` x` xYouhavefailedtofulfillthetermsofacontractoragreement;p x x 8  ifsuchpropertycanberestoredtouseby:P   8  8`   a.8 ` x` xTherepair,replacement,adjustmentorremovalof 0  yourproductor yourwork;or p   8  8`   b.8 ` x` xYourfulfillingthetermsofthecontractoragreement.`   8  ....@   8  11.a.8`    Productscompletedoperationshazardincludesall bodilyinjury   and propertydamageoccurringawayfrompremisesyouownor ! rentandarisingoutof yourproductor yourworkexcept:" ` x` x 8   ` (1)8   Productsthatarestillinyourphysicalpossession;or$"   8   ` (2)8   Workthathasnotyetbeencompletedorabandoned.% #   8  b.8`    Yourworkwillbedeemedcompletedattheearliestofthe `'"% followingtimes:P(#&` x` x 8   ` (1)8   Whenalloftheworkcalledforinyourcontracthas @)$'  beencompleted.0*%(   8   ` (2)8   Whenalloftheworktobedoneatthesitehasbeen  completedifyourcontractcallsforworkatmorethan  onesite.    8   ` (3)8   Whenthatpartoftheworkdoneatajobsitehasbeen  puttoitsintendedusebyanypersonororganization p otherthananothercontractororsubcontractor `  workingonthesameproject.P    8  Workthatmayneedservice,maintenance,correction,repairorreplacement,but @  whichisotherwisecomplete,willbetreatedascompleted.0    8   ` ....`    8  12.8`    Propertydamagemeans:@ ` x` x 8  8`   a.8 ` x` xPhysicalinjurytotangibleproperty,includingall 0  resultinglossofuseofthatproperty.Allsuchlossof   useshallbedeemedtooccuratthetimeofthe  physicalinjurythatcausedit;or   8  8`   b.8 ` x` xLossofuseoftangiblepropertythatisnotphysically  injured.Allsuchlossshallbedeemedtooccuratthe  timeofthe occurrencethatcausedit.     .... ` 8  14.8`    Yourproductmeans:@` x` x 8  8`   a.8 ` x` xAnygoodsorproductsotherthanrealproperty, 0 manufactured,sold,handled,distributedordisposed  p ofby:`   8  8`    (1)You;P` x` x 8   ` ....@   8  15.8`    Yourworkmeans: ` x` x 8  8`   a.8 ` x` xWorkoroperationsperformedbyyouoronyour ! behalf;and"    8  8`   b.8 ` x` xMaterials,partsorequipmentfurnishedinconnection #! withsuchworkoroperations.$"   ̀OnoraboutJanuary27,1997,BlakeinstalledawatersoftenersysteminthehomeofBlaze p&!$ andGinaWattenbarger.OnFebruary17,1997,theWattenbargersreportedawaterleakwhich `'"% Blakepromptlyrepaired.Nonetheless,theleakcausedconsiderabledamagetotheWattenbargers P(#& home.TheWattenbargersfiledsuitintheGeneralSessionsCourtofDavidsonCountyseekingmore @)$' than$9,000indamagestotheirhome.TheWattenbargerssoughtindemnificationfordamages 0*%( causedtotheirhomeby(1)Blakesnegligence;(2)breachofexpresswarranty;(3)breachofthe  +p&) impliedwarrantyofmerchantability;and(4)breachoftheimpliedwarrantyforaparticularpurpose. ,`'*  TheWattenbargerslawsuitwasappealedtotheCircuitCourtforDavidsonCounty, BlazeandGina  Wattenbargerv.BlakeWaterTreatmentTechnologies ,DavidsonCountyCircuitCourtNo.98C  1816. Thatcaseeventuallysettled.    DuringthependencyoftheWattenbargerslawsuit,BlakemadedemandsuponGAINSCO p toindemnifyand/ordefendBlake .Theinsurancecompanydeclinedtoprovidecoverage. Blake `  subsequentlyfiledadeclaratoryjudgmentactionintheDavidsonCountyChanceryCourton P  October30,1998. GAINSCOrespondedbyfilingaconsolidatedmotiontodismiss,motionfor @  judgmentonthepleadingsandananswer. Blakethenfiledamotionforpartialsummaryjudgment 0  ontheissueofGAINSCOsdutytodefendBlakeintheWattenbargerscase. OnMay13,1999,the  p  ChanceryCourtenteredajudgmentinfavorofGAINSCOanddismissedBlakeslawsuit. Blake `  timelyfiledthenoticeofappealonMay17,1999. Theappealhasbeenperfectedandisproperly P  beforethisCourtforconsiderationanddisposition. @      InconsideringtheappealofaRule12.02(6)Tenn.R.Civ.P.motiontodismiss,theCourt   ofAppealsisrequiredtotaketheallegationsofthecomplaintastrueandtoconstruethe  allegationsliberallyinfavoroftheplaintiff. Pembertonv.AmericanDistilledSpiritsCo. ,664  S.W.2d690,691(Tenn.1984).SincethisappealisbeforetheCourtofAppealsonaquestionof  law,thescopeofthereviewis denovo withnopresumptionofcorrectnessforthetrialcourt's  conclusion. Montgomeryv.MayoroftheCityofCovington ,778S.W.2d444,445(Tenn.Ct.  App.1988).AmotiontodismisspursuanttoRule12.02(6)forfailuretostateaclaimupon p whichreliefcanbegrantedistheequivalentofademurrerunderourformercommonlaw ` procedureand,thus,isatestofthesufficiencyoftheleadingpleading. Humphriesv.WestEnd P Terrace,Inc. ,795S.W.2d128,130(Tenn.Ct.App.1990).Suchamotionadmitsthetruthofall @ relevantandmaterialavermentscontainedinthecomplaintbutassertsthatsuchfactsdonot 0 constituteacauseofaction. Id. However,admissionsofthisnature,madesolelyinconnection  p withthemotiontodismiss,donotconstituteadmissionschargeabletotheproponentofthe ` motionforpurposesofthelitigationasawhole. Anthonyv.Tidwell ,560S.W.2d908,910 P (Tenn.1977).Acomplaintshouldbedismissedforfailuretostateaclaimifitappearsbeyond @ doubtthatplaintiffcanprovenosetoffactsinsupportofitsclaimthatwouldentitlehimto 0 relief. Pemberton ,664S.W.2dat691. Coulterv.Hendricks ,918S.W.2d424,42526(Tenn.   Ct.App.1995). ! ̀Insurancecontractslikeothercontractsshouldbeconstruedsoastogiveeffecttothe #! intentionandexpresslanguageoftheparties. InterstateLife&Acc.Ins.Co.v.Gammons ,56 $" Tenn.App.441,408S.W.2d397(Tenn.Ct.App.1966).Inconstruingandapplyinginsurance % # policies,theapparentobjectandintentofthepartiesmustbekeptinmind. DempsterBros.,Inc. p&!$ v.U.S.Fidelity&GuarantyCo. ,54Tenn.App.65,388S.W.2d153(Tenn.Ct.App.1964). `'"% Languageinacontractwhichhappenstobetechnicalorcomplextothelayman,doesnotrender P(#& itambiguous, Bartlettv.Philip-CareyManufacturingCo. ,216Tenn.323,330,392S.W.2d @)$' 325,328(Tenn.1965),andwherethereisnoambiguityitisthedutyofthecourttoapplytothe 0*%( wordsusedtheirusual,naturalandordinarymeaning. Ballardv.NorthAmericanLife&Cas.  +p&) Co. ,667S.W.2d79,82(Tenn.Ct.App.1983).Thecourtcannot,undertheguiseofconstruction, ,`'* makeanewanddifferentcontractfortheparties. UnitedStatesStoveCorp.v.AetnaLifeIns.  Co. ,169Tenn.264,267,84S.W.2d582,583(Tenn.1935). Seealso_Blaylock_ԀandBrown  Const.,Inc.v.AIUIns.Co. ,796S.W.2d146,149(Tenn.Ct.App.1990).    EachpartyhasanalyzedthevariousprovisionsanddefinitionsoftheCGLpolicyinorder p toconstruethepolicyintheirfavor.Asapracticalmatter,GAINSCOneedonlyestablishthat `  onerelevantpolicyprovisionpermittingexclusionappliestothefactsofthiscauseinorderto P  prevail.Indeed,afterexhaustiveanalysisofthepolicy,weconcludethatthepolicydoesexclude @  coveragefortheunderlyingclaim. 0    Bothpartieshavereliedupon VernonWilliams&SonConstruction,Inc.v.Continental `  InsuranceCo. ,591S.W.2d760(Tenn.1979),inwhichtheTennesseeSupremeCourtaddressed P  whethertheCGLpolicyatissueprovidedcoveragetoVernonWilliams&SonsConstructionfor @  itsfailuretoperformaconstructioncontractinaworkmanlikemanner.Itisapparentthatthe 0  insurancepolicyatissueinthe Williams casecontainedsubstantiallysimilarprovisions   regardingexclusionsasthatcontainedintheCGLpolicybeforethisCourt.Initanalysis,the   Williams courtstated:  8  Allofthecasesagreethat[therelevantexclusions]clearlyeliminatecoveragefor  damagesconfinedtotheinternaldefectivenessoftheinsuredsownworkproduct,  resultingfromdefectivematerialsordefective,negligentorunskilled p workmanship.`    Id. at762. @   The Williams courtfound that thepolicyinquestiondoesnotcoveranaccidentoffaulty  p workmanshipbutratherfaultyworkmanshipwhichcausesanaccident. Id. at764. The ` TennesseeSupremeCourtconcluded thatthestandardcomprehensivegeneralliabilitypolicy P doesnotprovidecoveragetoaninsuredcontractorforabreachofcontractactiongroundedupon @ faultyworkmanshipormaterials,wherethedamagesclaimedarethecostofcorrectingthework 0 itself. Williams ,591S.W.2dat765.     Inlightoftheforegoing,Blakeassertsthatexclusions(k)and(l)oftheGAINSCOpolicy "  donotexcludecoverageinthisinstancebecausethedamageclaimedwascollateraldamageto #! theWattenbargershomewhichisnotconfinedtothecostsofcorrectingtheworkitself.Simply $" stated,becausetheWattenbargersclaimedwaterdamagethroughouttheirhome,exclusions(k) % # and(l)donotapply.Moreover,Blakearguesthatexclusion(j)doesnotapplybecausethe p&!$ damageclaimedwascollateraltoandoutsideofthewatersoftenerandtheparticularpartofthe `'"% propertyonwhichBlakeworked. P(#&   Sincethe Williams casewasissued,thisCourthashadtheopportunitytoaddressaCGL 0*%( policysuchastheoneatissuein BlaylockandBrownConstruction,Inc.v.AIUInsuranceCo. ,  +p&) 796S.W.2d146(Tenn.Ct.App.1990). Blaylock presentedtheCourtwithasubstantially ,`'* similarfactualandlegalscenariotothecaseatbar.In Blaylock ,theconstructioncompanybuilt  acustomhome.Aftercompletionoftheproject,theownerdiscoveredastructuraldefectinthe  foundationthatresultedinconsiderabledamagetothehome.TheCGLpolicyin Blaylock   containedabroadformpropertydamageendorsementwhichexcludedcoveragefor property  damagetoworkperformedbyoronbehalfofthenamedinsuredarisingoutofsuchworkorany p portionthereof,oroutofsuchmaterials,partsorequipmentfurnishedinconnectiontherewith. `   Id. at14748.TheCourtconcluded: P  8  Inthecaseatbar,BlaylockandBrownsoughttohaveAIUdefendtheminasuit 0  broughtbyacontractingpropertyownerwhichwasgroundedupon,interalia,  p  breachofcontract,breachofwarrantyandnegligenceandsoughtdamages `  resultingfromtheconstructionperformedunderthecontractbetweenBlaylock P  andBrownandthepropertyowner.Tothisextent,andtotheextentthatthesame @  definitionofpropertydamageisusedinthepolicies,thiscaseisfactually 0  identicalto Williams .Wearethereforeconstrainedtoagreethatthecoveragefor   propertydamageprovidedbythestandardcomprehensivegeneralliabilitypolicy  doesnotextendcoveragetoaninsuredcontractorforabreachofcontractaction  suchasthis.    Id. at152153.    Asin Williams andasin Blaylock ,theGAINSCOCGLpolicyatissuebeforeusdefines `  propertydamagetoinclude [p]hysicalinjurytotangibleproperty.MoreovertheCGLpolicy P intheinstantcasespecificallyexcludes: @ 8  j.8`    Propertydamageto: p` x` x 8   ` ....`   8   ` (5)8   Thatparticularpartofrealpropertyonwhichyouor @ anycontractorsorsubcontractorsworkingdirectly 0 orindirectlyonyourbehalfareperforming   operations,ifthe propertydamagearisesoutof ! thoseoperations;or"    8   ` (6)8   Thatparticularpartofanypropertythatmustbe #! restored,repairedorreplacedbecause yourwork $" wasincorrectlyperformedonit.% #     ItisapparentthattheWattenbargersclaimsweregroundedincontractandaroseoutof `'"% Blakesattempttofulfillitsagreementtoinstallawatersoftenersystem.InlightofthisCourts P(#& holdingin Blaylock ,weconcludethatGAINSCOsCGLpolicyexcludescoveragefordamages @)$' sustainedbyBlakeasaresultoftheinstallationofthewatersoftenersystemattheWattenbarger 0*%( home.Toholdotherwisewouldmaketheinsureraguarantoroftheinsuredsperformance.  +p&)  J.Z.G.Resources,Inc.v.King ,987F.2d98,103(2ndCir.1993). ,`'* Ї  Moreover,theGAINSCOspolicyandanendorsementincludedthereinexpressly  excludecoverageforpropertydamageincludedwithintheproductscompletedoperations  hazard.Specifically,thepolicyandendorsementprovided:    Thisinsurancedoesnotapplyto: p 8  l.8`    Propertydamageto yourworkarisingoutofitoranypartofit P  andincludedinthe productscompletedoperationshazard.@ ` x` x 8  Thisendorsementmodifiesinsuranceprovidedunderthefollowing: p    8  8`    ` x` x 8  8`   COMMERCIALGENERALLIABILITYCOVERAGEPART.P ` x` x 8      8  Thisinsurancedoesnotapplyto bodilyinjuryor propertydamageincluded 0  withinthe productscompletedoperationshazard.8@  8          TheGAINSCOpolicydefined Productscompletedoperationshazardas:  8  11.a.8`    Productscompletedoperationshazardincludesall bodily  injuryand propertydamageoccurringawayfrompremisesyou  ownorrentandarisingoutof yourproductor yourwork p except:`` x` x 8   ` (1)8   Productsthatarestillinyourphysicalpossession; @ or0   8   ` (2)8   Workthathasnotyetbeencompletedor  p abandoned.`   8  b.8`    Yourworkwillbedeemedcompletedattheearliestofthe @ followingtimes:0` x` x 8   ` (1)8   Whenalloftheworkcalledforinyourcontracthas ! beencompleted."    8   ` (2)8   Whenalloftheworktobedoneatthesitehasbeen #! completedifyourcontractcallsforworkatmore $" thanonesite.% #   8   ` (3)8   Whenthatpartoftheworkdoneatajobsitehas p&!$ beenputtoitsintendedusebyanypersonor `'"% organizationotherthananothercontractoror P(#& subcontractorworkingonthesameproject.@)$'   8  Workthatmayneedservice,maintenance,correction,repairorreplacement,but 0*%( whichisotherwisecomplete,willbetreatedascompleted. +p&)    ,`'*   BlakecompletedinstallationofthewatersoftenersystemintheWattenbargershomeon  January29,1997.ThedamageoccurredonoraboutFebruary17,1997.Clearly,theworkhad  been completed,asdefinedinthepolicy,fornearlythreeweeksbeforetheincidentresultingin  damageoccurred.In Butlerv.U.S.Fidelity&GuarantyCo. ,277S.W.2d348(Tenn.1955),a  contractormaderepairsandimprovementstoaresidence.Aftertherepairshadbeencompleted, p anoccupantfellfromtheporchafterthebannistergaveway.Ininterpretingtheinsurancepolicy `  in Butler ,theTennesseeSupremeCourtfoundnoliabilityonthepartoftheinsurancecompany P  duetothepolicysspecificexclusionregardingcompletedwork.Basedontheprecedentof @   Butler , weconcludethatGAINSCOisnotliableforanydamagesarisingoutofthecompleted 0  workperformedbyBlake.  p    BlakealsoraisedasanissueonappealGAINSCOsfailuretodefendBlakeinregardto P  the Wattenbarger case.Aninsurersdutytodefendisseparateanddistinctfromtheinsurers @  obligationtopayclaimsunderthepolicy. JacksonHousingAuth.v.AutoOwnersIns.Co. , 0  686S.W.2d917(Tenn.Ct.App1984).Aninsurersdutytodefenditsinsuredisdeterminedby   theallegationsmadeinthepleadingfiledagainsttheinsured.Consequently,thedutytodefend  isbroaderthanthedutytoindemnify. DrexelChem.Co.v.BituminousIns.Co. ,933S.W.2d  471(Tenn.Ct.App.1996); AmericanNatlProperty&Cas.Co.v.Gray ,803S.W.2d693,695  96(Tenn.Ct.App.1990). AssuccinctlynotedbytheSixthCircuitin AetnaCasualty&Surety  Co.v.SunshineCorp. ,74F.3d685,688(6thCir.1996), [_t]he_Ԁfactthattheallegationsofthe  suitmaybegroundlessdoesnotrelievetheinsurerofitsobligationtoprovideadefense. p Likewise,thisCourtin Drexel , supra ,  stated, ` 8  [_a]n_Ԁinsurermaynotproperlyrefusetodefendanactionagainstitsinsuredunless @  itisplainfromthefaceofthecomplaintthattheallegationsfailtostatefactsthat 0 bringthecasewithinorpotentiallywithinthepolicyscoverage. p    DrexelChem.Co. ,  933S.W.2dat480(quoting GlensFallsIns.Co.v.HappyDayLaundry, P Inc. ,19784T.V.,1989WL91082(Tenn.Ct.App.Aug.14,1989)). @    OurSupremeCourtin St.PaulFireandMarineInsuranceCo.v.Torpoco ,879S.W.2d   831(Tenn.1994),summarizedthestateofthelawasfollows: ! 8  Itisacceptedintheoverwhelmingmajorityofjurisdictionsthattheobligationofa #! liabilityinsurancecompanytodefendanactionbroughtagainsttheinsuredbya $" thirdpartyistobedetermined solely bytheallegationscontainedinthecomplaint % # inthataction....Accordingly,iftheallegationsintheunderlyingtortactionsin p&!$ theinstantcasearewithintheriskinsuredagainstandthereisapotentialbasisfor `'"% recovery,thenAmericanmustdefend...,regardlessoftheactualfactsorthe P(#& ultimategroundsonwhich...liabilitytotheinjuredpartiesmaybepredicated... @)$' .Inanyevent,thepleadingtestfordeterminationofthedutytodefendisbased 0*%( exclusivelyonthefactsas alleged ratherthanonthefactsastheyactuallyare.... +p&)    ,`'*  Id. at835(quoting AmericanPolicyholders'Ins.Co.v.CumberlandColdStorageCo. ,373  A.2d247(Me.1977)).  Ѐ    TheCourt,therefore,mustreviewtheallegationsofthecomplaintinordertodetermine  whetherthefactsallegedarewithintheriskinsuredagainst.TheWattenbargersinitiatedthis p lawsuitbyswearingoutaCivilWarrantagainstBlakeintheMunicipalGeneralSessionsCourt `  ofDavidsonCounty,Tennessee,onoraboutApril8,1998. ThewarrantcompelledBlaketo P  answerfor @  8  [_d]amages_Ԁasaresultofthedefectivesysteminstalledbythedefendantinthe  p  Plaintiffshome,causedby(1)thedefendantsnegligence,(2)Breachofexpress `  warrantyunderT.C.A.472312,(3)Breachofimpliedwarrantyof P  merchantabilityunderT.C.A.472314,(4)Breachofimpliedwarrantyfora @  particularpurposeunderT.C.A.472315.0      Clearly,thewarrantallegedBlakesnegligenceinregardtoacompletedactinstallation  ofthesystemwhichisexcludedfromcoverageunderthetermsoftheCGLpolicy.The  remainingallegationsappeartopertainsolelytothefitnessofthewatersoftenersystem,as  installed,foritsintendedpurpose.As Blaylock ,supra,held, thestandardcomprehensive  generalliabilitypolicydoesnotextendcoveragetoaninsuredcontractorforabreachofcontract  action.796S.W.2dat153.Consequently,giventheallegationscontainedinthecivilwarrant, p GAINSCOhadnodutytodefendBlakeinthe Wattenbarger lawsuit. `   Inviewoftheforegoinganalysis,weaffirmtheorderofthetrialcourtdismissingthe @ lawsuitfiledbyBlake.Costsonappealaretaxedtoappellant,BlakeIndustries,Inc.,andits 0 surety,forwhichexecutionmayissueifnecessary.  p    `     h     ___________________________________ 0    `     h     DAVIDR.FARMER,JUDGE