The recent decision in Carr v. Spinnaker Insurance Company, 1 is a coverage interpretation case where the policyholder attempted to reframe the cause of a disputed loss into covered perils. It is a case involving defective workmanship being reframed into allegations of vandalism. I suggest that students and those involved with litigation of insurance coverage may want to read the competing trial court briefs because they argue two very different causes at play, leading to the result, which seems a common occurrence in many construction scenarios.
The case arose after Karen Carr purchased a vacation rental home in Sekiu, Washington. Shortly thereafter, she hired a painter, David Scott, whom she met on Facebook. Carr alleged that Scott falsely claimed to be a licensed contractor and, once inside her home, performed reckless and destructive painting work that damaged her floors, cabinets, fixtures, and other personal property. She paid him in part before discovering the damage and asked him to leave. She filed a claim with her homeowner’s insurer, Spinnaker Insurance Company, contending that the loss was covered under the policy’s theft and vandalism or malicious mischief provisions.
Spinnaker denied the claim after an investigation, relying on the policy’s “faulty workmanship” exclusion. The exclusion, contained in Section I – Exclusions, stated that the insurer did “not insure for loss to property described in Coverages A and B caused by any of the following… Faulty, inadequate or defective… workmanship, repair, construction, renovation, remodeling… [or] materials used in repair, construction, renovation or remodeling.”
Spinnaker maintained that the loss was the direct result of Scott’s imperfect and deficient work, not any intentional destruction, and thus squarely fell within this exclusion. The company further pointed to the absence of evidence that Scott stole any property from the home, undermining Carr’s theft theory, and argued that Washington law requires proof of willful and malicious conduct for vandalism coverage—proof Carr did not have.
Carr attempted to reframe the facts by arguing that Scott was not a legitimate contractor, but an imposter who gained entry under false pretenses, making him a trespasser. She claimed his conduct was so reckless that it amounted to vandalism or malicious mischief, and that the payment she made to him was effectively stolen by deception.
Carr cited cases in which Washington courts held that intentional acts causing damage, even if arising in nontraditional vandalism scenarios like meth labs or marijuana grows, could trigger coverage. She asserted that the faulty workmanship exclusion did not apply because this was not a simple “bad job” dispute but a case of intentional or reckless property destruction.
Spinnaker noted one case in particular regarding the defective workmanship exclusion with an ensuing loss clause similar to Spinnaker’s policy, which caught my attention for this proposition:
[An] insurance policy with an exclusion of the kind before us should not be interpreted as extending a warranty of fitness to materials used in construction or repair or as an extending coverage to property loss arising from the negligence of third parties. 2
The district court rejected Carr’s arguments and granted summary judgment to Spinnaker, a decision the Ninth Circuit affirmed. The appellate court held that Carr’s losses from Scott’s painting did not fall within the scope of theft or vandalism and malicious mischief. The court emphasized that under Washington law, an insured cannot avoid a contractual exclusion merely by relabeling the cause of loss.
The court found that the record contained no reasonable dispute of fact as to whether Scott acted in conscious or intentional disregard of Carr’s property rights. Carr failed to show that any of Scott’s work occurred without her prior direction or contemporaneous approval. The court further concluded that the faulty workmanship exclusion was unambiguous and enforceable, applying to Scott’s imperfect painting work under the ordinary meanings of “faulty” and “defective.”
For my fellow insurance coverage nerds studying this case and looking for lessons, courts will often look past the labels used by policyholders and examine the actual cause of loss in relation to the policy language. This is still a worthwhile exercise when seeking coverage, although it failed in this instance. Second, exclusions for faulty workmanship are broadly enforced in some jurisdictions, and ensuing covered perils should always be examined. Third, some claims arising from poor or negligent contractor work are not excluded in some older policy forms, so always read the full policy. Fourth, a big takeaway is that vandalism coverage usually requires proof of willful or malicious acts. These need facts with more than just substandard performance.
Many will just think of this case as another faulty workmanship or defective construction exclusion case without reading the underlying trial briefs. When I read the briefs, it shows two very different scenarios that the judge resolved at the summary judgment stage, without the matter going to the jury to make the final determination about facts. Some may suggest the trial and appellate judges should have allowed the jury to weigh the facts.
Thought For The Day
“You can use an eraser on the drafting table or a sledgehammer on the construction site.”
—Frank Lloyd Wright
1 Carr v. Spinnaker Ins. Co., 3:23-cv-05252, 2025 WL 2170333 [Not Reported in Fed. Rptr.] (9th Cir. July 31, 2025).
2 McDonald v. State Farm Fire & Cas. Co., 119 Wash. 2d 724, 735, 837 P.2d 1000, 1005–06 (1992).