A federal appeals court on Wednesday affirmed a lower court ruling in favor of a W.R. Berkley Inc. unit in a coverage dispute with a developer in which the insurer said there was no claim under its property policy because nothing unintended had occurred.

Wheeling, West Virginia-based GC&P Development LLC was sued by nearby neighbors of a property upon which the company was conducting operations including commercial timbering and/or development of a rock quarry, according to court papers in Nautilus Insurance Co. v. GC&P Development, LLC et al.

Nautilus, a Berkley excess and surplus lines unit, filed suit in U.S. District Court in Clarksburg, West Virginia, seeking a declaratory judgment it had no obligation to defend or indemnify the company, alleging the company had engaged in unlawful timbering activities and fraudulently concealed development plans from the City of Wheeling, West Virginia.

Nautilus primarily argued there had not been an occurrence under its policy, the district court said. The court agreed. The determinative issue, it said, “is whether any of the property damage alleged in the Underlying Complaint resulted from an occurrence,” which the policy defines as an accident.

“Neither the means nor the result of the events alleged was unforeseen or unexpected,” the ruling said.

“First, even a cursory review of the complaint makes clear that the alleged ‘means’ by which property damage purportedly occurred” were the defendant’s intended development activities on the property.

“Second, the Underlying Plaintiffs plainly allege ‘results,’ that is property damage, foreseen or expected” by the defendants.

“Because the underlying complaint alleges damages caused only by intended activities,” there has not been an occurrence, which is required to trigger coverage, it said.

A three-judge panel of the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, affirmed the lower court in a brief opinion, stating it agreed with it that there had not been an occurrence that triggered coverage. 

Attorneys in the case did not respond to requests for comment.