In Trost v. Haack Homestead Inspections, LLC (2018AP2344), the Court of Appeals District IV held that a liability insurer had no duty to defend because the complaint did not allege property damage caused by the insured.

Defendants Raymond and Donna Weihofen sold their house. After discovering a bat infestation and water intrusion in the home, the buyers brought misrepresentation claims against the Weihofens. The Weihofens claimed their liability insurer Economy Premier Insurance Co. had a duty to defend them under their policy, which covered claims resulting from occurrences where there is property damage.

Economy argued that it did not have a duty to defend the Weihofens in this case because the Weihofens did not cause the property damage at issue. The court agreed, finding that the buyers’ misrepresentation claims did not allege that the Weihofens’ conduct caused property damages at the home; instead, the buyers alleged that the Weihofens’ misrepresented the extent of the already existing damages, inducing the buyers to purchase the home to their detriment. The Economy policy provided coverage only for liability for property damage – not for liability for misrepresentations, so Economy had no duty to defend the Weihofens.