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 in 1994, and they were insured by four separate Chubb carriers from then until October of 2005. In October of 2010, Mr. and Mrs. Strauss discovered that a defect during construction in 1994 had been allowing water infiltration during every rainstorm over the past 16 years, causing damage to the building’s envelope. They made claim under the 1994-2005 Chubb policies, but the insurers denied liability, and the Strausses brought suit in federal court in October of 2011, within one year of their discovery of the damage.
The policies covered “all risks of physical loss to [the] house” with coverage limited “only to occurrences that take place while this policy is in effect.” The term “occurrence” was then defined as”
a loss or accident to which this insurance applies occurring during the policy period. Continuous or repeated exposure to substantially the same general conditions unless excluded is considered to be one occurrence.
Finally, there was a “Legal Action Against Us” clause mandating that any action against the insurers be brought “within one year after a loss occurs.” Read more ›
Plaintiff Wakefern was a buying cooperative consisting of the owners of ShopRite and PriceRite supermarkets, and it had a commercial property policy issued by Lexington Insurance Company. After Superstorm Sandy struck on October 29, 2012, Wakefern made claim for over $50 million in damage at dozens of different locations.
Jane Street Holding, LLC was a trading company with offices in One New York Plaza in lower Manhattan. On September 2, 2011, it purchased a commercial property policy from Aspen American Insurance Company for the 2011-2012 policy year. Jane Street subsequently bought a $2.2 million generator and installed it in the basement of One New York Plaza. The policy was renewed “as expiring” on September 2, 2012, and the generator was totally destroyed when Superstorm Sandy struck on October 29, 2012 and flooded Lower Manhattan.
Justin and Brandy Porter owned a home that was damaged when raw sewage entered the premises on November 14, 2009. Their homeowners carrier was Oklahoma Farm Bureau Mutual Insurance Company, and the insurer denied. Litigation followed. After the district court granted Oklahoma Farm Bureau’s motion to dismiss and the state’s intermediate level appellate panel affirmed, the Oklahoma Supreme Court granted the Porters’ writ of certiorari.
The Frys owned a home in Fleetwood, Pennsylvania. The house was a wood-frame structure with a stone veneer, and they noticed that the veneer was bulging in 2003. An engineering report that they commissioned at the time attributed the problem to “an insufficient number of veneer wall ties and fasteners,” and the Frys paid $22,000 to have the exterior wall repaired.
The Brancos’ home was damaged by a sinkhole in April of 2010, and they made claim under a homeowner’s policy issued by Homewise Preferred Insurance Company. The insurer denied liability, asserting that what had happened did not qualify as a “sinkhole loss” as defined, and the Brancos brought suit. Homewise was subsequently declared insolvent, and Mr. and Mrs. Branco filed an amended complaint substituting the Florida Insurance Guaranty Association as defendant.
The case involved sinkhole damage to a piece of property owned by Cannon Ranch Partners, Inc. The property was insured by Cincinnati Insurance Company, and the contract of insurance included coverage for sinkholes. The dispute involved the necessary scope of repair. Cincinnati’s two consultants determined that grouting was all that was needed to restore the structure to its pre-sinkhole state, but Cannon Ranch’s consultant opined that underpinning was also needed, and the policyholder entered into a contract to have that done. Cincinnati refused to sign off on the work, however, and it made a demand for appraisal instead.
The case arose after the Office of Thrift Supervision closed Vantus Bank and appointed the FDIC as its receiver. The FDIC then filed suit against the bank’s former officers and directors, alleging gross negligence and breach of fiduciary duties. Progressive Casualty Insurance Company, which had issued a D&O policy to the bank, responded by filing a declaratory judgment action of its own, asserting that there was no coverage for the FDIC’s claims under its contract of insurance.
The Curries were the owners of a home in Langhorne, Pennsylvania. When Superstorm Sandy struck on October 29, 2012, the structure took a direct hit from a tree on the property. The insurer, State Farm Fire & Casualty Company, conducted an inspection and then tendered its repair estimate to the policyholders together with a check for $56,940.54 – the actual cash value of the estimate less the policy’s deductible. The Curries responded by submitting their own repair estimate in the amount of $363,804.98. State Farm then conducted a new inspection and made a supplemental payment of $9,502.09.
Effective March 16, 2010, Colony Insurance Company issued a commercial property policy providing $4.5 million in coverage for a vacant, 95,000 sq. ft. building in Montezuma, Georgia. In light of the vacancy, the insurer insisted that the policy include a protective safeguards endorsement requiring that the policyholders maintain an automatic sprinkler system, fire extinguishers, and functioning utilities and reciting that Colony would “not pay for loss or damage caused or resulting from fire if, prior to the fire, [the insureds] [f]ailed to maintain any protective safeguard . . . in complete working order.” The policyholders’ application for coverage also recited that the utilities in the building were on. When the insurer had the structure inspected in early April, however, the utilities were all found to be shut off.