Blog Archives

Colorado Court Conducts a Clinic on Explosions

Earlier this month in Paros Properties v. Colorado Cas. Ins. Co., 2015 WL 5139293, U.S. Dist. LEXIS 116939 (D.Colo., Sep. 2, 2015), a federal court in Colorado addressed what constitutes an explosion.  After a mudslide knocked down part of its building, the insured contended that the structure had sustained a “violent breaking apart” and therefore an explosion, but the judge held otherwise.  In her opinion, the term “explosion” required that a force from within the object cause it to expand violently and burst apart in all directions. The insured owned a commercial building in Boulder, a city which experienced unprecedented rainfall in September of 2013.  On September 12th, “a violent flow of water, mud, rocks, trees, and other debris traveled

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Posted in Collapse, Exclusions, Explosion, Mudslide, Water

Iowa Court: Anti-Concurrent Causation Language Mandates That the Jury Determine Whether an Excluded Peril Was One Cause of the Loss

Last month, we discussed a recent Texas Supreme Court decision that enforced an anti-concurrent causation (ACC) clause.  The month of April also saw a unanimous panel on Iowa’s intermediate level appellate court do the same thing.  In Salem United Methodist Church v. Church Mut. Ins. Co., 2015 WL 1546431, 2015 Iowa App. LEXIS 308 (Iowa Ct. App., Apr. 8, 2015), the judges held that ACC provisions unambiguously exclude loss caused by a concurrent combination of excluded perils and included perils and that the question of whether an excluded peril played any causative role must therefore be put to the finder of fact. The policyholder had a church in Cedar Rapids.  On June 11-12, 2008, the Cedar River overflowed its banks,

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Posted in Anti-Concurrent Causation, Flood, Water

Iowa’s Highest Court: Damage by Rainwater is Damage by Rain

Last July, we posted that an intermediate level appellate court in Iowa had held that a policy excluding loss “caused by rain” did not bar coverage for loss occasioned by the non-excluded peril of “rainwater.”  On Friday, the state’s highest court threw cold water on such nonsense, holding that there was no distinction between rain and rainwater for coverage purposes.  No justice disagreed, though the court split 4-3 on another issue.  The decision can be found at Amish Connection, Inc. v. State Farm Fire & Cas. Co., 2015 WL 1260085, 2015 Iowa Sup. LEXIS 32 (Iowa, Mar. 20, 2015). The insured operated the Amish Connection Store in Crossroads Shopping Mall in Waterloo, Iowa.  Rooftop drains discharged into a 4” cast-iron

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Posted in Anti-Concurrent Causation, Corrosion, Ensuing Loss, Flood, Water

New York’s Highest Court Enforces a Water Damage Exclusion Despite an Ensuing Loss Exception

In Platek v. Town of Hamberg, et al., 2015 WL 685726, 2015 N.Y. LEXIS 252 (N.Y., Feb. 19, 2015), the New York Court of Appeals held that an exclusion for water below the surface of the ground was unambiguous and operated to bar coverage when a subsurface water main burst and flooded the insureds’ basement.  The policyholders’ attempt to invoke an ensuing loss exception to the exclusion was also rejected in an opinion that surveys the historical genesis of ensuing loss provisions and explains the limited circumstances under which they operate to restore coverage. The insureds, Frederick and Mary Platek, owned a home in Hamberg, New York.  On September 7, 2010, a subsurface water main abutting their property ruptured, flooding

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Posted in Ambiguity, Burden of Proof, Ensuing Loss, Explosion, Flood, Water

Seventh Circuit: Under Wisconsin Law, “Continuous or Repeated Exposure” Language Means That a Continuous Trigger Theory Applies

Yesterday, in Strauss v. Chubb Indem. Ins. Co., – F.3d – , 2014 WL 6435314, 2014 U.S. App. LEXIS 21794 (7th Cir., Nov. 18, 2014), the Court of Appeals held that the use of the phrase “continuous or repeated exposure” in a Wisconsin first-party property policy’s definition of occurrence meant that the contract of insurance contemplated that the continuous trigger theory determined whether loss was covered.  As a result, a claim for 11 years of gradual water damage under a series of insurance policies was held to be timely even though it was first presented when the damage was initially discovered, five years after the last contract of insurance had expired. The Strausses had constructed a home in Mequon, Wisconsin

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Posted in Ambiguity, Homeowners Coverage, Trigger, Water

Second Circuit Affirms a Southern District Decision Construing “Covered Location” Narrowly

In January, the Southern District rejected an insured’s $2 million claim for a generator destroyed by Superstorm Sandy.  The unit was in the basement of an office building in lower Manhattan, but the contract of insurance defined “covered location” to mean the 33rd floor of the structure.  The district court rejected the policyholder’s argument that language insuring personal property “in buildings or structures at a ‘covered location’ “ extended coverage to the entire building including its basement.  On October 16th, a panel of the Court of Appeals affirmed this carrier-friendly interpretation in Jane Street Holding, LLC v. Aspen American Ins. Co., — Fed.Appx. –, 2014 WL 5287051, 2014 U.S. App. LEXIS 19905 (2d. Cir., Oct. 16, 2014). Jane Street Holding,

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Posted in Flood, Insured Premises, Superstorm Sandy, Water

Oklahoma Supreme Court Reconciles Sewer Backup Exclusion With Accidental Discharge Coverage Grant

In May, we reported that a New York court had found that a policy containing both an exclusion for water that backs up through sewers and drains and a coverage grant for accidental discharge or overflow from a plumbing system was neither internally inconsistent nor ambiguous in nature.  The post can be found here.  On June 17th, Oklahoma’s highest court agreed, albeit without citing the New York case, and it held that the two provisions were fully reconcilable and enforceable.  The case in question is Porter v. Oklahoma Farm Bureau Mut. Ins. Co., 330 P.3rd 511, 2014 Okla. LEXIS 72 (Okla., June 17, 2014). Justin and Brandy Porter owned a home that was damaged when raw sewage entered the premises

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Posted in Ambiguity, Flood, Seepage or Leakage, Water

Pennsylvania Court: Inaction When Damage is Known to Be Likely is Enough to Render the Loss Non-Fortuitous

On September 19th, a federal court in Pennsylvania held that a wall collapse was not fortuitous because the insureds knew that the wall was unstable and likely to fall and yet took no steps to correct the problem.  No one could say the loss was certain to happen, but the court effectively held that the insureds’ inaction was enough to make the collapse non-fortuitous given the likelihood that the wall would fail if it wasn’t repaired or braced.  The decision is Fry v. Phoenix Ins. Co., 2014 WL 4662481, 2014 U.S. Dist. LEXIS 131504 (E.D.Pa., Sept. 19, 2014). The Frys owned a home in Fleetwood, Pennsylvania.  The house was a wood-frame structure with a stone veneer, and they noticed that

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Posted in Collapse, Fortuity, Water, Wear and Tear

Vermont: There is No Cause of Action for Negligence in Adjusting a Property Loss

Last week, the Vermont Supreme Court firmly rejected the notion that an insured can bring a cognizable claim for negligence against his or her carrier in connection with the inspection and handling of a first-party property insurance claim.  In Helena G. Murphy v. Patriot Ins. Co., 2014 VT 96, 2014 WL 3965639, 2014 Vt. LEXIS 101 (Vt., Aug. 14, 2014), the court recognized that the relationship was “fundamentally contractual” in nature and that a policyholder’s rights flowed solely from the insurance policy and the covenant of good faith and fair dealing implied in that instrument. In July of 2007, the insured, Helena Murphy, reported damage to the roof of her house and interior water damage to her homeowner’s carrier, Patriot

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Posted in Homeowners Coverage, Investigation, Loss Adjustment, Mold, Water

In Iowa, Rain is What Gene Kelly Sang In – Not Water From a Burst Drain Pipe

Earlier this year, an Iowa court recognized that rain becomes rainwater once it has fallen, and it held that policy language excluding loss caused by “rain” – without more – will not operate to bar coverage for water from a burst drain pipe that ruptured during a rainstorm.  The decision is reported at Amish Connection, Inc. v. State Farm Fire & Cas. Co., 847 N.W.2d 237, 2014 WL 1234161 (Iowa Ct. App., March 26, 2014). The insured, Amish Connection, Inc., leased space in a mall in Waterloo, Iowa, and its merchandise was damaged after a 4” cast iron drain pipe above the ceiling burst during a rainstorm.  The pipe carried water from the roof drains to a storm sewer.  The

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Posted in Flood, Water
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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