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Weedo v. Stone-E-Brick, Inc.

Supreme Court of New Jersey
405 A.2d 788 (1979)


Facts

Calvin and Janice Weedo (plaintiffs) retained Stone-E-Brick, Inc. (Stone) (defendant) to perform masonry work on their home. The completed masonry work showed signs of faulty workmanship and had to be replaced. Vivino (defendant), a general contractor, hired Stone to perform masonry work on a house for the Gellases (plaintiffs). That masonry work also showed signs of faulty workmanship and had to be replaced. Stone had a general automobile-liability policy with Pennsylvania National Mutual Insurance Company (Pennsylvania National) that was in effect at the time Stone performed the faulty work for the plaintiffs. This policy included comprehensive general liability coverage (CGL) provisions. Under the CGL provisions, Pennsylvania National agreed to pay “on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of . . . bodily injury . . . or property damage to which this insurance applies, caused by an occurrence . . . .” The policy excluded coverage for breaches of implied or express warranties. The insurance policy also excluded coverage for liabilities assumed by Stone under a contract. This exclusion contained a clause excluding the warranties of fitness or quality of Wall’s products or warranties that Wall’s work was done in a workmanlike manner. The Weedos sued Stone for damages arising from Stone’s shoddy workmanship. The Gellases sued Vivino, who sued Stone. The appeals court held that the exclusions in the policy were ambiguous and should be interpreted in favor of Wall, because one exclusion excluded coverage for the repair or replacement of faulty workmanship, while another separate exclusion excluded breaches of warranty. The Supreme Court of New Jersey granted certification to review the Appellate Division’s decision.

Rule of Law

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Issue

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Holding and Reasoning (Clifford, J.)

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