from the Iowa District Court for Lee (North) County, John G.
defendant appeals the district court's declaratory
judgment in favor of the plaintiff.
Jeffrey A. Stone and Robert S. Hatala of Simmons Perrine
Moyer Bergman, PLC, Cedar Rapids, for appellant.
Matthew G. Novak and Stephanie L. Hinz of Pickens, Barnes
& Abernathy, Cedar Rapids, for appellee.
Considered by Vaitheswaran, P.J., Doyle, J., and Vogel, S.J.
Vaitheswaran, Presiding Judge.
Bay Levee Drainage District contracted with MEP Co. to
reshape the levee. As part of the bid process before the
contract was awarded, board members took MEP Co.'s owner
Mike Pieper to "the various locations" from which
dirt could be moved to complete the project. After MEP
Co.'s bid was accepted, the company moved dirt from
individual landowners' private property, rather than the
authorized sites. Federal litigation ensued.
had a commercial general liability (CGL) policy with Addison
Insurance Company. Addison sued MEP Co. for a judgment
declaring that its policy provided no coverage for MEP
Co.'s expenses in the federal litigation. Following
trial, the district court found in favor of Addison,
concluding, "[t]he commercial general liability
insurance policy . . . affords no coverage."
appeal, MEP Co. raises several arguments in support of
reversal. First among them is a contention that "the
insuring agreement provides coverage for occurrences
resulting in property damage." This issue is the only
one we find it necessary to address.
begin with the policy language. The insuring agreement
provides coverage for "those sums that the insured
becomes legally obligated to pay as damages because of . . .
'property damage.'" The agreement further
obligates the insurer "to defend the insured against any
'suit' seeking those damages." However, the
insurer "will have no duty to defend the insured against
any 'suit' seeking damages for . . . 'property
damage' to which this insurance does not apply." The
insurance "applies to . . . 'property damage'
only if . . . [t]he . . . 'property damage' is caused
by an 'occurrence.'" The insuring agreement
defines "occurrence" as "an accident,
including continuous or repeated exposure to substantially
the same general harmful conditions."
supreme court interpreted the identical definition of
"occurrence" in National Surety Corp.
v. Westlake Investments, LLC, 880
N.W.2d 724, 735 (Iowa 2016). The court held, "An
intentional act resulting in property damage the insured did
not expect or intend qualifies as an accident amounting to an
occurrence as defined in a modern standard-form CGL policy so
long as the insured did not expect and intend both the act
itself and the resulting property damage."
Westlake, 880 N.W.2d at 736; cf.
Pursell Constr., Inc. v.
Hawkeye-Security Ins. Co., 596 N.W.2d 67, 71 (Iowa
1999) (holding "defective workmanship standing alone . .
. is not an occurrence under a CGL policy"); Yegge
v. Integrity Mut. Ins. Co., 534 N.W.2d
100, 103 n.3 (Iowa 1995) (noting policy defined
"occurrence" as "an accident including
continuous or repeated exposure to substantially the same
general harmful conditions"); Hudson Hardware
Plumbing & Heating, Inc. v.
AMCO Ins. Co., No. 15-1677, 2016 WL 5930779, at *6
(Iowa Ct. App. Oct. 12, 2016) (characterizing
Westlake as "a bit of a game changer").
Westlake, the district court made the following
Analyzing whether MEP Co.'s actions in intentionally
removing dirt from unauthorized sites qualifies as an
accident under the CGL policy boils down to a determination
by the Court of whether [MEP Co.] did not expect and intend
both the act of removing the dirt and the resulting property
damage. Pieper claims he intentionally removed dirt from the
[individual property owners'] sites but he did not expect
or intend resulting property damage because he believed it
was permissible to remove dirt within the 150-foot easement
the [d]istrict had over the levee. MEP Co. claims Pieper did
not intend to harm the property owned by [private
landholders]; therefore, the removal of the dirt was an
The Court rejects Pieper's assertion. First and foremost,
Pieper's testimony on this issue lacks credibility.
Pieper knew the location of the explicitly authorized borrow
sites. He attended the meeting at which [a board member and
engineer] were also present. The location of the authorized
borrow sites was carefully described, and Pieper even marked
the locations on a map. [A board member, engineer, and
Pieper] physically visited these sites. Pieper cannot dispute
the fact that he had specific knowledge of the location of
the explicitly authorized borrow ...