Monthly Archives: June 2015

Missouri Court: “Equivalent” Requires that Replacement Siding be Both Equal in Value and Virtually Identical

In December, we published a post about a Minnesota Supreme Court case that held that under a replacement cost policy, the phrase “comparable material and quality” meant that all of the siding on 20 buildings had to be replaced to avoid a color mismatch, even though less than 2% had actually been damaged by hail.  According to the court, that was necessary to ensure a “reasonable” color match.  Last week, a unanimous panel of Missouri’s intermediate level appellate court reached a similar conclusion under a replacement cost contract of insurance that required replacement “for equivalent construction and use.”  In Alessi v. Mid-Century Ins. Co., 2015 WL 3874799, 2015 Mo.App. LEXIS 679 (Mo.App., Jun. 23, 2015), the judges held that the

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Posted in Direct Physical Loss or Damage, Hailstorm, Replacement Cost, Valuation

New York Court: Undefined Word “Occurrence” in a Deductible Provision Must be Construed by the Finder of Fact

Many property policies expressly define the term “occurrence” to encompass a series of similar and related events.  Last month, however, in Rokeach v. Hanover Ins. Co., 2015 WL 2400097, U.S. Dist. LEXIS 6580 (May 19, 2015, S.D.N.Y.), a New York federal court held that when the word is employed in the policy’s deductible provision without either emphasis or quotation marks, it is effectively undefined, and the question of whether it should be understood to denote a single occurrence or a series of multiple occurrences must be determined by the jury. The policyholder operated a welding business in Uniondale, and the company stored scrap metal in an ungated yard on the property.  As summarized by the court, the undisputed facts were

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Posted in Ambiguity, Deductible, Occurrence, Theft or Dishonesty

Washington Supreme Court Misses Opportunity to Clarify the Meaning Of “Collapse”

Washington State has long been a jurisdiction with no judicial pronouncement as to the meaning of the term “collapse” in a property insurance policy, but that changed last Thursday when the state’s Supreme Court issued its decision in Queen Anne Park Homeowners Ass’n v. State Farm Fire & Cas. Co., 2015 WL 3795796, 2015 Wash. LEXIS 695 (Wash., Jun. 18, 2015).  The court found that the term, as used in the insurance policy before it, was ambiguous.  It then adopted a definition of “collapse,” but its use of uncertain terms in that definition may only lead to further ambiguity, and the likely result will be yet more expensive litigation concerning older policies that contain similar “collapse” language. The Queen Anne

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Posted in Ambiguity, Collapse, Hidden Decay

Missouri Court Clarifies What Constitutes An Ensuing Loss

Last week in Performance Arts Cmty. Improvement Dist. v. ACE Amer. Ins. Co., 2015 WL 3491292, 2015 U.S. Dist. LEXIS 71592 (W.D. Mo., June 3, 2015), a federal court in Missouri shot down an insured’s arguments that a wall collapse caused by the excluded peril of defective design was a covered ensuing loss under a builder’s risk policy.  The developer admittedly erred in calling an for excess amount of concrete slurry to be pumped behind the structure, but the policyholder contended that the collapse that that mistake caused was a separate loss by “excessive lateral pressure.”  The court analogized to that to arguing that the collapse of a defectively-designed building was a separate loss caused by the covered peril of

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Posted in Builders' Risk, Collapse, Ensuing Loss, Faulty Workmanship or Design

Ninth Circuit: Under Arizona Law Mudslide Can Be Covered as the Direct Result of Fire

Last Friday, a unanimous panel of the Ninth Circuit held that loss from the excluded peril of mudslide occurring one month after a wildfire could be covered as the “direct” result of the blaze.  In Stankova v. Metropolitan Prop. & Cas. Ins. Co., 2015 WL 3429395, 2015 U.S. App. LEXIS 8935 (9th Cir., May 29, 2015),  it reached that result even though Arizona has not adopted the efficient proximate cause rule, saying that it did not need to apply that doctrine to determine that the mudslide “could have been directly and proximately caused by the wildfire.” It also blithely ignored anti-concurrent causation (ACC) language, which is given effect in Arizona, as “inconsistent with Arizona’s standard fire insurance policy, which insures

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Posted in Anti-Concurrent Causation, Causation, Direct Physical Loss or Damage, Efficient Proximate Cause, Exclusions, Flood, Mudslide, Wildfire
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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