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 down a nearby hillside [and this] knocked down a wall of the building, causing the building to partially collapse.”
The contract of insurance contained a water exclusion endorsement barring coverage for loss from “flood [or] surface water. . . mudslide or mudflow, [or] waterborne material carried or otherwise moved by” such water. The policyholder conceded that this was applicable. It argued, however, that an exception to the exclusion where any of the enumerated perils resulted in “explosion” operated to restore coverage. According to the insured, “the force of the impact with the building was so abrupt and strong, and the damage so immediately catastrophic that the impact” could fairly be described that way. The contract of insurance did not define the term “explosion.” Read more ›
In February, we reported on an Alabama federal court decision that barred an insured from recovering for employee theft where the only evidence of shortage was a comparison between computer records and a physical inventory conducted after the malefactor had been discharged. On August 6th, a unanimous panel of the Eleventh Circuit affirmed in 
The insured’s home was damaged by 2011’s massive Bastrop County Complex Fire. After disputes arose over the amount of loss, the insurer invoked the appraisal clause in the contract of insurance. The parties’ appraisers were unable to agree on an umpire, and the carrier then requested that the court appoint one. The district judge proceeded to do so, and, four months later for unspecified reasons, removed him and appointed a replacement umpire in his stead.
There are obviously many reasons for this. The west is undergoing a historically severe drought; the snowpack in California is currently 5% of what it should be. The region is also suffering from extreme heat; 2015 is the second warmest year ever recorded in Alaska, and temperatures in the west as a whole are now averaging two degrees hotter than they did in the 1980’s. This year’s “Godzilla” el Niño is also a factor, because that tends to heat the west coast but inhibit hurricane formation in the Atlantic basin.
The insureds owned a home in Seaside Heights that was demolished by the storm on October 29, 2012, and they filed a claim for “storm damages.” Their homeowners carrier had the property inspected by an engineer, and he concluded that while wind had caused some damage to the structure, its loss was primarily attributable to storm surge and flooding.
“Read the policy, read the policy, read the policy” is a famous piece of advice for coverage counsel everywhere. Last Friday in 
A storm damaged the insured’s roof in December 2013, and she made claim under her homeowners policy. The contract of insurance called for payment on an ACV basis unless the damage had been completely repaired or replaced, and it defined ACV as “[t]he amount which it would cost to repair or replace damaged property with property of like kind and quality, less allowance for physical deterioration and depreciation, including obsolescence.” The insurer paid this amount after determining the replacement cost and depreciating both materials and labor, and it subsequently tendered the holdback after the roof had been fixed. The insured then brought suit, seeking class action status and arguing that the carrier’s practice of depreciating the cost of labor when determining ACV was unlawful.
In December, 2008 Allstate and four affiliated companies brought suit against 63 defendants, alleging the violations of IFPA. Those sued included physicians, chiropractors, and medical and equipment providers. The 604 paragraph complaint asserted that the defendants that engaged in a wide-ranging scheme to defraud the carriers of over $8 million by providing unnecessary care, engaging in fraudulent testing, creating bogus medical bills and records, and even staging accidents and recruiting accident victims. The plaintiffs sought compensatory and treble damages, as well as equitable relief in the form of disgorgement of benefits already paid and liens on the defendants’ assets. 
The policyholder owned an apartment building in Oakland that was damaged by fire in November of 2010. The blaze was confined to one unit, and the insurer valued the loss at approximately $180,000. The insured contended that there was extensive fire and smoke damage to five other apartments, however, requiring that all six units be completely gutted and rebuilt and that the building’s exterior be renovated and repainted. Her claim exceeded $800,000.
In 