In this DJ action, Airolite, a manufacturer of commercial louver products, sought coverage from its insurer, Valley Forge. Airolite had contracted with Glassalum to design and manufacture custom-made louvers for the curtain wall of a new office building. The louvers were to be installed by Glassalum. Part of the specifications was that the louvers had to meet certain criteria with regard to noise and vibration.

After installation, Glassalum began complaining to Airolite about excessive noise and vibration from the louvers, and attributed the problem to a design change that Airolite had made prior to manufacture: the omission of a stiffener that was to be attached to each blade. Airolite had decided that the stiffener was not needed because the louvers were more rigid than had been anticipated.

When Glassalum threatened to take action if Airolite did not take remedial measures, Airolite contacted its insurance agency.

Airolites CGL policy specifically excluded coverage for any property damage to your work arising out of it or any part of it, and also excluded coverage for a defect, deficiency, inadequacy or dangerous condition in your product or your work, and also excluded coverage for a delay or failure by youto perform a contract or agreement in accordance with its terms.

Glassalum sued Airolite for breach of contract based on the noise and vibration of the louvers. Glassalum was awarded summary judgment in the amount of $707,666.35 " the cost of remediation of the defects. Airolite then commenced this DJ action. Both sides moved for summary judgment.

The court noted that Glassalum sued only for the cost of correcting the defects in the louvers, and not for any injury or loss of use of property. Where, as here, the commercial general liability policy specifically excludes coverage for a defect in the insureds own work product that does not cause injury to, or loss of use of, other tangible property, New York courts decline to find a duty to defend. (citing Bonded Concrete Inc. v. Transcontinental Ins. Co., 12 AD3d 761). CGL policies are not intended to insure the integrity or quality of the contractors product.

Airolite argued that, as an Ohio corporation, Ohio law should apply, and it cited a case which, it argued, supported the contention that under Ohio law there would be coverage for this claim. But the court distinguished away the Ohio case on the ground that in the Ohio case, there were consequential damages (the shutting down of a factory and loss of production output while repairs to the defective product were made) that went beyond the cost of repairing the defective product.

Summary judgment was granted to the insurer.

Airolite v. Valley Forge Insurance Company, 2007 NY Slip Op 31459(u) (Supreme Court, New York Co.) (Stallman, j)