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Showing posts with label earth movement. Show all posts
Showing posts with label earth movement. Show all posts
Sunday, October 4, 2015
U.S. District Court interprets earth movement exclusion
Habit OPCO leased a building that was damaged by construction at an adjacent site owned by the Greater Boston Food Bank.
The building rested on concreted piles and on fill. On December 7, 2007 GBFB began construction of a new building on the adjacent property. It drove concrete piles to a depth of almost 190 feet. Within a couple of weeks Habit employees noticed damage to its building such as cracked door frames. By mid-February the building had floor heaves, its ceiling tiles were shifting, and walls were cracking.
Habit's insurer, Philadelphia Indemnity, hired an expert who opined that the damage was caused by vibrations from the pile driving on the GBFB property.
Philadelphia Indemnity denied the claim for structural damage, citing the policy's earth movement exclusion. Habit argued that the earth movement exclusion bars coverage only for damage from naturally occurring earth movements and not from man-made events.
In Mulhern v. Philadelphia Indem. Co., __ F. Supp. 2d __, 2011 WL 3563126 (D. Mass.), the United States District Court for the First Circuit noted that the exclusion includes loss from "improperly compacted soil," which is a man-made condition. The court held that Philadelphia Indemnity was entitled to judgment to the extent that Habit is precluded from arguing that the policy covers damages caused by defects in the fill.
Philadelphia Indemnity argued that the anti-concurrent causation clause in the earth movement exclusion precluded coverage under Habit's theory that shock waves generated by the pile driving caused the structural damage to the building. The court denied summary judgment on that issue because there was a disputed issue of fact as to whether improperly compacted soil was a cause of damage or whether vibrations emanating from the pile driving were the exclusive cause.
Finally, the court held there was no coverage under the collapse clause of the policy because the damage to the building was not "an abrupt falling down or caving in of a building or any part of a building with a result that the building cannot be occupied for its intended purpose, because the claim was the the roof split, leaving a gap of .75 inches, and then cracked.
Friday, April 17, 2015
U.S. District Court holds that exclusion for earth movement does not apply to damages from burst pipe
A ceiling pipe in a warehouse owned by Espedito Realty burst. The break was not noticed for several days. The water pooled against a wall and eventually seeped down between the concrete floor and exterior wall. As a result, the sub-base below the concrete floor subsided, and the warehouse floor sank.
Espedito's insurer, National Fire Insurance Company of Hartford, paid some of the damages, but it refused to pay for the repair of the sunken floor. It asserted that an exclusion for "earth movement" applied.
The earth movement exclusion excludes coverage for damages arising from earthquake, landslide, mine subsidence, volcanic eruption, and "earth sinking, rising or shifting, including soil conditions which cause settling, cracking or other disarrangement of foundations or other parts of realty."
Espedito's experts opined that water from the broken pipe penetrated the ground underneath the floor, resulting in a subsidence of wasting away of the soil that caused the floor to sink.
National Fire argued that the cause of the earth movement was irrelevant.
In Espedito Realty, LLC v. Nat'l Fire Ins. Co. of Hartford, __ F. Supp. 2d __, 2012 WL 1014176 (D. Mass.) the court held that the exclusion does not apply:
The unavoidable fact is that pipes burst rather frequently. It is a
rare property owner who has not dealt with the problem, or at least suffered
anxiety over the possibility, and it is hardly intuitive that an "earth
movement" exclusion would bar coverage for the homely situation where a pipe
bursts and a floor sinks as a result. No objectively reasonable insured
reading the policy would think so, especially when the only reference to the
impact of water is to "water flowing underground." If the policy truly
intended to cover this commonly recurring situation, it should have said
so.