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…
Blog Archives
Missouri Court Clarifies What Constitutes An Ensuing Loss
Tagged with: Missouri
Posted in Builders' Risk, Collapse, Ensuing Loss, Faulty Workmanship or Design
Posted in Builders' Risk, Collapse, Ensuing Loss, Faulty Workmanship or Design
Indiana Court Nixes Requests for Reinsurance and Reserves
Early last month a federal court in Indianapolis barred a policyholder from seeking the claims and underwriting files of the defendant carrier’s reinsurer in Indianapolis Airport Auth. v. Travelers Property Cas. Co. of Amer., 2015 WL 1548959, 2015 U.S. Dist. LEXIS 45123 (S.D. Ind., Apr. 7 2015). Several months ago, the same court also shot down the policyholder’s requests for the insurer’s reserves. The insured operated the Indianapolis International Airport, and it began construction on the $1 billion Midfield Terminal Project in 2005 and secured a builder’s risk policy from Travelers to cover the work. On January 24, 2007, temporary shoring towers collapsed, damaging the building, disrupting the original construction schedule, and generating claims by consultants and contractors. The policyholder…
Anti-Sequential Causation Clause Upheld in Hurricane Irene Case in New Jersey
In Ashrit Realty, LLC v. Tower National Ins. Co., 2015 WL 248490, 2015 N.J. Super. Unpub. LEXIS 107 (N.J.Super.Ct., App.Div., Jan. 20, 2015), New Jersey’s Appellate Division held that an anti-concurrent/anti-sequential causation clause precluded coverage for a Hurricane Irene loss. A covered peril (hidden decay) led to an excluded peril (soil erosion), bringing down part of the insured’s structure. As the court explained, such a provision “excludes coverage in situations where a covered event and an excluded event contribute, concurrently or sequentially, to a single loss.” While the New Jersey Supreme Court has yet to weigh in on anti-concurrent/anti-sequential causation clauses, the case adds to growing body of lower court decisions holding or suggesting that such provisions are valid and…
Tagged with: Anti-Sequential Causation, New Jersey
Posted in Anti-Concurrent Causation, Causation, Collapse, Hurricane, Hurricane Irene, Seepage or Leakage
Posted in Anti-Concurrent Causation, Causation, Collapse, Hurricane, Hurricane Irene, Seepage or Leakage
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…
