SlideShare une entreprise Scribd logo
1  sur  3
Télécharger pour lire hors ligne
The Insurance Coverage Law Information Center
The following article is from National Underwriter’s latest online resource,
FC&S Legal: The Insurance Coverage Law Information Center.
COURT REJECTS COVERAGE UNDER ALL-RISK PROPERTY POLICY
WHERE PARTIAL COLLAPSE OF BUILDING WAS NOT CAUSED “ONLY”
BY WEIGHT OF CONTENTS AND EQUIPMENT
May 27, 2014 Steven A. Meyerowitz, Esq., Director, FC&S Legal
A federal district court in Oregon, ruling in favor of an insurance carrier, has decided that an “all risk” property insurance
policy did not cover a partial collapse of a building where the collapse was not directly and immediately caused “only” by
the weight of contents and equipment in the building as required by the policy.
The Case
The Tarleton Building, a partial two story built in the 1940s and framed with five wood bowstring roof trusses, originally
served as a farm supply store but was converted into an office building during the 1970s. Tarleton LLC acquired the
building in 1998 and, since then, has leased the building for use as an office.
Tarleton said that after it remodeled the building to add ceilings, platforms, duct work, steel pipes, electrical equipment,
mechanical equipment, and sprinklers, one of the bowstring trusses ruptured, causing a collapse. Tarleton said that it
repaired the building, installing conditioning units, wires, suspended ceilings, ceiling joists, and insulation.
A few years later, another truss ruptured, fell five to eight inches, and landed on a non-load-bearing wall.
Tarleton filed an insurance claim with State Farm Fire and Casualty Company, which had issued it an “all-risk” property
insurance policy insuring the building.
An engineer hired by State Farm to investigate the collapse concluded:
We do not believe that the [truss] failure can be attributed to any particular single event. Rather, the damage appears
to be the result of inadequately-sized truss members and connections from the original design and construction, with a
progression of degradation of truss integrity over many decades along with likely increases in dead loads, which finally
reached a tipping point....
State Farm denied Tarleton’s insurance claim, and Tarleton sued. State Farm moved for summary judgment.
The Policy
The all-risk property insurance policy insured against:
accidental direct physical loss
to covered property.
An “Amendatory Collapse Endorsement” specified that State Farm would cover losses resulting from a building collapse
if the collapse was:
directly and immediately cause[d] only by one or more of the following:
Call 1-800-543-0874 | Email customerservice@SummitProNets.com | www.fcandslegal.com
a. any of the “Specified Causes of Loss” or breakage of building glass, only as insured against in this policy.
b. weight of contents, equipment, animals or people
c. weight of ice, snow, sleet or rain which collects on a roof; or
d. use of defective material or methods in the construction (includes remodeling or renovation) of the building if the
collapse occurs during the course of the construction of the building.
The Court’s Decision
The court granted State Farm’s motion.
In its decision, the court first rejected Tarleton’s argument that summary judgment was inappropriate because the
collapse was covered under the general “losses insured” section. In this case, the court found, the “accidental direct
physical loss” language articulated policy coverage in very general terms, whereas the collapse endorsement specifically
defined the bounds of coverage relating to “direct physical loss to covered property involving the sudden, entire collapse
of a building or any part of a building.” Thus, the court ruled, the specific language of the collapse endorsement
controlled the more general language of the “losses insured” section, and precluded recovery under the policy’s
“accidental direct physical loss” language.
With respect to the collapse endorsement, the court first agreed with Tarleton that the building’s roof, ceilings, electrical
wiring, duct work, and other building materials that exhibited dead weight on the trusses were “contents and equipment”
as contemplated by the parties. It then explained that, for Tarleton’s claim to survive summary judgment, the collapse
must have been “directly and immediately caused only by” the weight of contents and equipment. In the court’s view, the
phrase was open to multiple interpretations, and was ambiguous. However, it continued, the plain meaning of “only” as
used in the policy meant that the policy would cover Tarleton’s loss “if the bowstring trusses ruptured due to the weight of
contents and equipment alone, without another direct and immediate cause contributing to the collapse.”
The court pointed out that Tarleton’s expert had opined that hot air in the building’s attic prior to the collapse had
weakened the wooden trusses and had contributed to the collapse, going so far as to call the attic temperatures a
“trigger” of the collapse. The court then ruled that the collapse was not caused by the weight of contents and equipment
“without anyone or anything else,” but that it had occurred due to the combination of multiple causes:
Here, dead load in the form of air conditioning equipment, “wires, suspended ceilings, ceiling joists, and insulation”
were added …, but the truss did not collapse immediately after the new equipment was installed. The cause which
had the closest temporal relationship to the collapse, and was most variable in the time-period preceding the
collapse, was the attic temperature. If there is one direct and immediate cause which was “closest in time” to the
events in question, it was the high temperature in the Tarleton building’s attic.
Thus, the court concluded, Tarleton’s loss was not “directly and immediately caused only” by the weight of contents and
equipment, and State Farm had not breached the insurance policy by refusing coverage.
The case is Tarleton LLC v. State Farm Fire and Cas. Co., No. 3:12–CV–00989–AC (D. Ore. May 21, 2014). Attorneys
involved include: Christopher Grady, Dean E. Aldrich, Aldrich Eike, PC, Portland, OR, for Plaintiff; Diane L. Polscer, Brian C.
Hickman, Paul A. Mockford, Gordon & Polscer, LLC, Portland, OR, for Defendant.Resident in the firm’s Newark, New
Jersey, office, the authors may be contacted at frederic.giordano@klgates.com and robert.pawlowski@klgates.com,
respectively.
Call 1-800-543-0874 | Email customerservice@SummitProNets.com | www.fcandslegal.com
Call 1-800-543-0874 | Email customerservice@SummitProNets.com | www.fcandslegal.com
Copyright © 2014 The National Underwriter Company. All Rights Reserved.
NOTE: The content posted to this account from FC&S Legal: The Insurance Coverage Law Information Center is current to the date of its initial
publication. There may have been further developments of the issues discussed since the original publication.
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding
that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice is required, the services of a competent
professional person should be sought.
For more information, or to begin your free trial:
	 • Call: 1-800-543-0874
	 • Email: customerservice@SummitProNets.com
	 • Online: www.fcandslegal.com
FC&S Legal guarantees you instant access to the most authoritative and comprehensive
insurance coverage law information available today.
This powerful, up-to-the-minute online resource enables you to stay apprised
of the latest developments through your desktop, laptop, tablet, or smart phone
—whenever and wherever you need it.

Contenu connexe

Similaire à Court Rejects Coverage under All Risk Property Policy Where Partial Collapse of Building Was Not Caused "Only" by Weight of Contents and Equipment

Emergency Mitigation Measures and Repairs, Allegedly Faulty, Doom Coverage
Emergency Mitigation Measures and Repairs, Allegedly Faulty, Doom CoverageEmergency Mitigation Measures and Repairs, Allegedly Faulty, Doom Coverage
Emergency Mitigation Measures and Repairs, Allegedly Faulty, Doom CoverageNationalUnderwriter
 
NY Appeals Court Finds Ambiguity as to Losses Resulting from Backup or Overfl...
NY Appeals Court Finds Ambiguity as to Losses Resulting from Backup or Overfl...NY Appeals Court Finds Ambiguity as to Losses Resulting from Backup or Overfl...
NY Appeals Court Finds Ambiguity as to Losses Resulting from Backup or Overfl...NationalUnderwriter
 
Group Builders Update - Tred Eyerly, Esq. www.insurancelawhawaii.com
Group Builders Update - Tred Eyerly, Esq. www.insurancelawhawaii.comGroup Builders Update - Tred Eyerly, Esq. www.insurancelawhawaii.com
Group Builders Update - Tred Eyerly, Esq. www.insurancelawhawaii.cominversecondemnation
 
AIG v ACIG Merriwether Occurrence Order MSJ
AIG v ACIG Merriwether Occurrence Order MSJAIG v ACIG Merriwether Occurrence Order MSJ
AIG v ACIG Merriwether Occurrence Order MSJSeth Row
 
Wisconsin Supreme Court: Pollution Exclusion Bars Coverage for Well Contamin...
Wisconsin Supreme Court:  Pollution Exclusion Bars Coverage for Well Contamin...Wisconsin Supreme Court:  Pollution Exclusion Bars Coverage for Well Contamin...
Wisconsin Supreme Court: Pollution Exclusion Bars Coverage for Well Contamin...NationalUnderwriter
 
Barnes & Thornburg Construction Law: Insurance Coverage for Construction Defects
Barnes & Thornburg Construction Law: Insurance Coverage for Construction DefectsBarnes & Thornburg Construction Law: Insurance Coverage for Construction Defects
Barnes & Thornburg Construction Law: Insurance Coverage for Construction DefectsBTLaw
 
Utility's Pre-Sandy Power Shutdown Did Not Cause "Direct Physical Loss" to Un...
Utility's Pre-Sandy Power Shutdown Did Not Cause "Direct Physical Loss" to Un...Utility's Pre-Sandy Power Shutdown Did Not Cause "Direct Physical Loss" to Un...
Utility's Pre-Sandy Power Shutdown Did Not Cause "Direct Physical Loss" to Un...NationalUnderwriter
 
Adam Leitman Bailey, P.C. Winter 2018 Newsletter
Adam Leitman Bailey, P.C. Winter 2018 NewsletterAdam Leitman Bailey, P.C. Winter 2018 Newsletter
Adam Leitman Bailey, P.C. Winter 2018 NewsletterAdam Leitman Bailey
 
New York High Court Finds Lead Exposure Injuries to Children of Different Fam...
New York High Court Finds Lead Exposure Injuries to Children of Different Fam...New York High Court Finds Lead Exposure Injuries to Children of Different Fam...
New York High Court Finds Lead Exposure Injuries to Children of Different Fam...NationalUnderwriter
 
N.J. Trial Court Applies "Named Storm" Deductible in Superstorm Sandy Case
N.J. Trial Court Applies "Named Storm" Deductible in Superstorm Sandy CaseN.J. Trial Court Applies "Named Storm" Deductible in Superstorm Sandy Case
N.J. Trial Court Applies "Named Storm" Deductible in Superstorm Sandy CaseNationalUnderwriter
 
Insurance ii (written assignment)
Insurance ii (written assignment)Insurance ii (written assignment)
Insurance ii (written assignment)FAROUQ
 
The Critical Path, The Newsletter of the Construction Law Committee, Volume 2...
The Critical Path, The Newsletter of the Construction Law Committee, Volume 2...The Critical Path, The Newsletter of the Construction Law Committee, Volume 2...
The Critical Path, The Newsletter of the Construction Law Committee, Volume 2...Brent Eisenberg
 
Real time Attorney advice memo priviledged and confidential
Real time  Attorney advice memo priviledged and confidentialReal time  Attorney advice memo priviledged and confidential
Real time Attorney advice memo priviledged and confidentialnicemanin
 
Malpractice And Malpractice Of A Healthcare Organization
Malpractice And Malpractice Of A Healthcare OrganizationMalpractice And Malpractice Of A Healthcare Organization
Malpractice And Malpractice Of A Healthcare OrganizationPatty Buckley
 
KL3083 Engineering Laws.ppt
KL3083 Engineering Laws.pptKL3083 Engineering Laws.ppt
KL3083 Engineering Laws.pptSysteDesig
 
Bolender Presentation to Defense Research Institute: Key Construction Related...
Bolender Presentation to Defense Research Institute: Key Construction Related...Bolender Presentation to Defense Research Institute: Key Construction Related...
Bolender Presentation to Defense Research Institute: Key Construction Related...jeffbolender
 

Similaire à Court Rejects Coverage under All Risk Property Policy Where Partial Collapse of Building Was Not Caused "Only" by Weight of Contents and Equipment (20)

Emergency Mitigation Measures and Repairs, Allegedly Faulty, Doom Coverage
Emergency Mitigation Measures and Repairs, Allegedly Faulty, Doom CoverageEmergency Mitigation Measures and Repairs, Allegedly Faulty, Doom Coverage
Emergency Mitigation Measures and Repairs, Allegedly Faulty, Doom Coverage
 
NY Appeals Court Finds Ambiguity as to Losses Resulting from Backup or Overfl...
NY Appeals Court Finds Ambiguity as to Losses Resulting from Backup or Overfl...NY Appeals Court Finds Ambiguity as to Losses Resulting from Backup or Overfl...
NY Appeals Court Finds Ambiguity as to Losses Resulting from Backup or Overfl...
 
Group Builders Update - Tred Eyerly, Esq. www.insurancelawhawaii.com
Group Builders Update - Tred Eyerly, Esq. www.insurancelawhawaii.comGroup Builders Update - Tred Eyerly, Esq. www.insurancelawhawaii.com
Group Builders Update - Tred Eyerly, Esq. www.insurancelawhawaii.com
 
AIG v ACIG Merriwether Occurrence Order MSJ
AIG v ACIG Merriwether Occurrence Order MSJAIG v ACIG Merriwether Occurrence Order MSJ
AIG v ACIG Merriwether Occurrence Order MSJ
 
Wisconsin Supreme Court: Pollution Exclusion Bars Coverage for Well Contamin...
Wisconsin Supreme Court:  Pollution Exclusion Bars Coverage for Well Contamin...Wisconsin Supreme Court:  Pollution Exclusion Bars Coverage for Well Contamin...
Wisconsin Supreme Court: Pollution Exclusion Bars Coverage for Well Contamin...
 
Admiral.worth
Admiral.worthAdmiral.worth
Admiral.worth
 
Barnes & Thornburg Construction Law: Insurance Coverage for Construction Defects
Barnes & Thornburg Construction Law: Insurance Coverage for Construction DefectsBarnes & Thornburg Construction Law: Insurance Coverage for Construction Defects
Barnes & Thornburg Construction Law: Insurance Coverage for Construction Defects
 
Utility's Pre-Sandy Power Shutdown Did Not Cause "Direct Physical Loss" to Un...
Utility's Pre-Sandy Power Shutdown Did Not Cause "Direct Physical Loss" to Un...Utility's Pre-Sandy Power Shutdown Did Not Cause "Direct Physical Loss" to Un...
Utility's Pre-Sandy Power Shutdown Did Not Cause "Direct Physical Loss" to Un...
 
N&W Case Alerts - December 2015
N&W Case Alerts - December 2015N&W Case Alerts - December 2015
N&W Case Alerts - December 2015
 
Adam Leitman Bailey, P.C. Winter 2018 Newsletter
Adam Leitman Bailey, P.C. Winter 2018 NewsletterAdam Leitman Bailey, P.C. Winter 2018 Newsletter
Adam Leitman Bailey, P.C. Winter 2018 Newsletter
 
New York High Court Finds Lead Exposure Injuries to Children of Different Fam...
New York High Court Finds Lead Exposure Injuries to Children of Different Fam...New York High Court Finds Lead Exposure Injuries to Children of Different Fam...
New York High Court Finds Lead Exposure Injuries to Children of Different Fam...
 
N.J. Trial Court Applies "Named Storm" Deductible in Superstorm Sandy Case
N.J. Trial Court Applies "Named Storm" Deductible in Superstorm Sandy CaseN.J. Trial Court Applies "Named Storm" Deductible in Superstorm Sandy Case
N.J. Trial Court Applies "Named Storm" Deductible in Superstorm Sandy Case
 
Insurance ii (written assignment)
Insurance ii (written assignment)Insurance ii (written assignment)
Insurance ii (written assignment)
 
The Critical Path, The Newsletter of the Construction Law Committee, Volume 2...
The Critical Path, The Newsletter of the Construction Law Committee, Volume 2...The Critical Path, The Newsletter of the Construction Law Committee, Volume 2...
The Critical Path, The Newsletter of the Construction Law Committee, Volume 2...
 
Real time Attorney advice memo priviledged and confidential
Real time  Attorney advice memo priviledged and confidentialReal time  Attorney advice memo priviledged and confidential
Real time Attorney advice memo priviledged and confidential
 
Malpractice And Malpractice Of A Healthcare Organization
Malpractice And Malpractice Of A Healthcare OrganizationMalpractice And Malpractice Of A Healthcare Organization
Malpractice And Malpractice Of A Healthcare Organization
 
Intentional Tort Law
Intentional Tort LawIntentional Tort Law
Intentional Tort Law
 
KL3083 Engineering Laws.ppt
KL3083 Engineering Laws.pptKL3083 Engineering Laws.ppt
KL3083 Engineering Laws.ppt
 
Bolender Presentation to Defense Research Institute: Key Construction Related...
Bolender Presentation to Defense Research Institute: Key Construction Related...Bolender Presentation to Defense Research Institute: Key Construction Related...
Bolender Presentation to Defense Research Institute: Key Construction Related...
 
Limitations Of Tort Law
Limitations Of Tort LawLimitations Of Tort Law
Limitations Of Tort Law
 

Plus de NationalUnderwriter

Excess and Surplus Lines Law: A 3-State Sample of a Complete State-by-State C...
Excess and Surplus Lines Law: A 3-State Sample of a Complete State-by-State C...Excess and Surplus Lines Law: A 3-State Sample of a Complete State-by-State C...
Excess and Surplus Lines Law: A 3-State Sample of a Complete State-by-State C...NationalUnderwriter
 
How to Successfully Navigate the Latest Changes to the Affordable Care Act
How to Successfully Navigate the Latest Changes to the Affordable Care ActHow to Successfully Navigate the Latest Changes to the Affordable Care Act
How to Successfully Navigate the Latest Changes to the Affordable Care ActNationalUnderwriter
 
Finding in Favor of Insurer, Jury Rejects Homeowners¹ Bid for $600,000 for Wa...
Finding in Favor of Insurer, Jury Rejects Homeowners¹ Bid for $600,000 for Wa...Finding in Favor of Insurer, Jury Rejects Homeowners¹ Bid for $600,000 for Wa...
Finding in Favor of Insurer, Jury Rejects Homeowners¹ Bid for $600,000 for Wa...NationalUnderwriter
 
The EU Solvency II Regime for Insurers: An Update on Implementation
The EU Solvency II Regime for Insurers: An Update on ImplementationThe EU Solvency II Regime for Insurers: An Update on Implementation
The EU Solvency II Regime for Insurers: An Update on ImplementationNationalUnderwriter
 
CFTC Grants No Action Relief to Commodity Pool Operators with Respect to Cert...
CFTC Grants No Action Relief to Commodity Pool Operators with Respect to Cert...CFTC Grants No Action Relief to Commodity Pool Operators with Respect to Cert...
CFTC Grants No Action Relief to Commodity Pool Operators with Respect to Cert...NationalUnderwriter
 
Arbitration in Insurance Coverage Disputes: Pluses and Minuses
Arbitration in Insurance Coverage Disputes: Pluses and MinusesArbitration in Insurance Coverage Disputes: Pluses and Minuses
Arbitration in Insurance Coverage Disputes: Pluses and MinusesNationalUnderwriter
 
Supreme Court of Texas Marries Contractual Limitations to Insurance Policies
Supreme Court of Texas Marries Contractual Limitations to Insurance PoliciesSupreme Court of Texas Marries Contractual Limitations to Insurance Policies
Supreme Court of Texas Marries Contractual Limitations to Insurance PoliciesNationalUnderwriter
 
Supreme Court of New Jersey Confirms "Fairly Debatable" Standard for First Pa...
Supreme Court of New Jersey Confirms "Fairly Debatable" Standard for First Pa...Supreme Court of New Jersey Confirms "Fairly Debatable" Standard for First Pa...
Supreme Court of New Jersey Confirms "Fairly Debatable" Standard for First Pa...NationalUnderwriter
 
Pennsylvania Supreme Court Holds Policyholders May Assign Their Statutory Rig...
Pennsylvania Supreme Court Holds Policyholders May Assign Their Statutory Rig...Pennsylvania Supreme Court Holds Policyholders May Assign Their Statutory Rig...
Pennsylvania Supreme Court Holds Policyholders May Assign Their Statutory Rig...NationalUnderwriter
 
New York State Department of Financial Services Expands Its Cyber Focus to In...
New York State Department of Financial Services Expands Its Cyber Focus to In...New York State Department of Financial Services Expands Its Cyber Focus to In...
New York State Department of Financial Services Expands Its Cyber Focus to In...NationalUnderwriter
 
Migrating Sand Triggers Separate Policy Limits for CGL Policy¹s Personal Inju...
Migrating Sand Triggers Separate Policy Limits for CGL Policy¹s Personal Inju...Migrating Sand Triggers Separate Policy Limits for CGL Policy¹s Personal Inju...
Migrating Sand Triggers Separate Policy Limits for CGL Policy¹s Personal Inju...NationalUnderwriter
 
Cyber Security and Insurance Coverage Protection: The Perfect Time for an Audit
Cyber Security and Insurance Coverage Protection: The Perfect Time for an AuditCyber Security and Insurance Coverage Protection: The Perfect Time for an Audit
Cyber Security and Insurance Coverage Protection: The Perfect Time for an AuditNationalUnderwriter
 
Class Actions: Insurance Related Claims
Class Actions: Insurance Related ClaimsClass Actions: Insurance Related Claims
Class Actions: Insurance Related ClaimsNationalUnderwriter
 
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad ...
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad ...Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad ...
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad ...NationalUnderwriter
 
CFTC Grants No-Action Relief to Commodity Pool Operators with Respect to Cert...
CFTC Grants No-Action Relief to Commodity Pool Operators with Respect to Cert...CFTC Grants No-Action Relief to Commodity Pool Operators with Respect to Cert...
CFTC Grants No-Action Relief to Commodity Pool Operators with Respect to Cert...NationalUnderwriter
 
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad-...
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad-...Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad-...
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad-...NationalUnderwriter
 
February14 IRS Valentine’s Day Words of Wisdom by Jay Katz
February14 IRS Valentine’s Day Words of Wisdom by Jay KatzFebruary14 IRS Valentine’s Day Words of Wisdom by Jay Katz
February14 IRS Valentine’s Day Words of Wisdom by Jay KatzNationalUnderwriter
 
Discharge of Debt Income (from The Tools & Techniques of Income Tax Planning)
Discharge of Debt Income (from The Tools & Techniques of Income Tax Planning)Discharge of Debt Income (from The Tools & Techniques of Income Tax Planning)
Discharge of Debt Income (from The Tools & Techniques of Income Tax Planning)NationalUnderwriter
 
Making Sense of California's "Accident" Requirement in Liability Insurance Po...
Making Sense of California's "Accident" Requirement in Liability Insurance Po...Making Sense of California's "Accident" Requirement in Liability Insurance Po...
Making Sense of California's "Accident" Requirement in Liability Insurance Po...NationalUnderwriter
 

Plus de NationalUnderwriter (20)

Excess and Surplus Lines Law: A 3-State Sample of a Complete State-by-State C...
Excess and Surplus Lines Law: A 3-State Sample of a Complete State-by-State C...Excess and Surplus Lines Law: A 3-State Sample of a Complete State-by-State C...
Excess and Surplus Lines Law: A 3-State Sample of a Complete State-by-State C...
 
How to Successfully Navigate the Latest Changes to the Affordable Care Act
How to Successfully Navigate the Latest Changes to the Affordable Care ActHow to Successfully Navigate the Latest Changes to the Affordable Care Act
How to Successfully Navigate the Latest Changes to the Affordable Care Act
 
Finding in Favor of Insurer, Jury Rejects Homeowners¹ Bid for $600,000 for Wa...
Finding in Favor of Insurer, Jury Rejects Homeowners¹ Bid for $600,000 for Wa...Finding in Favor of Insurer, Jury Rejects Homeowners¹ Bid for $600,000 for Wa...
Finding in Favor of Insurer, Jury Rejects Homeowners¹ Bid for $600,000 for Wa...
 
The EU Solvency II Regime for Insurers: An Update on Implementation
The EU Solvency II Regime for Insurers: An Update on ImplementationThe EU Solvency II Regime for Insurers: An Update on Implementation
The EU Solvency II Regime for Insurers: An Update on Implementation
 
CFTC Grants No Action Relief to Commodity Pool Operators with Respect to Cert...
CFTC Grants No Action Relief to Commodity Pool Operators with Respect to Cert...CFTC Grants No Action Relief to Commodity Pool Operators with Respect to Cert...
CFTC Grants No Action Relief to Commodity Pool Operators with Respect to Cert...
 
Arbitration in Insurance Coverage Disputes: Pluses and Minuses
Arbitration in Insurance Coverage Disputes: Pluses and MinusesArbitration in Insurance Coverage Disputes: Pluses and Minuses
Arbitration in Insurance Coverage Disputes: Pluses and Minuses
 
Supreme Court of Texas Marries Contractual Limitations to Insurance Policies
Supreme Court of Texas Marries Contractual Limitations to Insurance PoliciesSupreme Court of Texas Marries Contractual Limitations to Insurance Policies
Supreme Court of Texas Marries Contractual Limitations to Insurance Policies
 
Supreme Court of New Jersey Confirms "Fairly Debatable" Standard for First Pa...
Supreme Court of New Jersey Confirms "Fairly Debatable" Standard for First Pa...Supreme Court of New Jersey Confirms "Fairly Debatable" Standard for First Pa...
Supreme Court of New Jersey Confirms "Fairly Debatable" Standard for First Pa...
 
Pennsylvania Supreme Court Holds Policyholders May Assign Their Statutory Rig...
Pennsylvania Supreme Court Holds Policyholders May Assign Their Statutory Rig...Pennsylvania Supreme Court Holds Policyholders May Assign Their Statutory Rig...
Pennsylvania Supreme Court Holds Policyholders May Assign Their Statutory Rig...
 
New York State Department of Financial Services Expands Its Cyber Focus to In...
New York State Department of Financial Services Expands Its Cyber Focus to In...New York State Department of Financial Services Expands Its Cyber Focus to In...
New York State Department of Financial Services Expands Its Cyber Focus to In...
 
Migrating Sand Triggers Separate Policy Limits for CGL Policy¹s Personal Inju...
Migrating Sand Triggers Separate Policy Limits for CGL Policy¹s Personal Inju...Migrating Sand Triggers Separate Policy Limits for CGL Policy¹s Personal Inju...
Migrating Sand Triggers Separate Policy Limits for CGL Policy¹s Personal Inju...
 
Cyber Security and Insurance Coverage Protection: The Perfect Time for an Audit
Cyber Security and Insurance Coverage Protection: The Perfect Time for an AuditCyber Security and Insurance Coverage Protection: The Perfect Time for an Audit
Cyber Security and Insurance Coverage Protection: The Perfect Time for an Audit
 
Class Actions: Insurance Related Claims
Class Actions: Insurance Related ClaimsClass Actions: Insurance Related Claims
Class Actions: Insurance Related Claims
 
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad ...
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad ...Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad ...
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad ...
 
CFTC Grants No-Action Relief to Commodity Pool Operators with Respect to Cert...
CFTC Grants No-Action Relief to Commodity Pool Operators with Respect to Cert...CFTC Grants No-Action Relief to Commodity Pool Operators with Respect to Cert...
CFTC Grants No-Action Relief to Commodity Pool Operators with Respect to Cert...
 
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad-...
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad-...Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad-...
Clarifying Bad Faith Jurisprudence in Virginia, Federal Court Recognizes Bad-...
 
February14 IRS Valentine’s Day Words of Wisdom by Jay Katz
February14 IRS Valentine’s Day Words of Wisdom by Jay KatzFebruary14 IRS Valentine’s Day Words of Wisdom by Jay Katz
February14 IRS Valentine’s Day Words of Wisdom by Jay Katz
 
Discharge of Debt Income (from The Tools & Techniques of Income Tax Planning)
Discharge of Debt Income (from The Tools & Techniques of Income Tax Planning)Discharge of Debt Income (from The Tools & Techniques of Income Tax Planning)
Discharge of Debt Income (from The Tools & Techniques of Income Tax Planning)
 
The IRS Halloween Bag of Tricks
The IRS Halloween Bag of TricksThe IRS Halloween Bag of Tricks
The IRS Halloween Bag of Tricks
 
Making Sense of California's "Accident" Requirement in Liability Insurance Po...
Making Sense of California's "Accident" Requirement in Liability Insurance Po...Making Sense of California's "Accident" Requirement in Liability Insurance Po...
Making Sense of California's "Accident" Requirement in Liability Insurance Po...
 

Dernier

xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.mike689707
 
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...Dr. Oliver Massmann
 
An introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha PanditAn introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha PanditSHRADDHA PANDIT
 
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...Anadi Tewari
 
Patents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future SolutionsPatents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future SolutionsAurora Consulting
 
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdfIslamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdfNo One
 
Classification of Contracts in Business Regulations
Classification of Contracts in Business RegulationsClassification of Contracts in Business Regulations
Classification of Contracts in Business RegulationsSyedaAyeshaTabassum1
 
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...SHRADDHA PANDIT
 
The Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a TemplateThe Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a TemplateBTL Law P.C.
 

Dernier (10)

xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.xLran: Open source AI for legal hackers.
xLran: Open source AI for legal hackers.
 
Criminalizing Disabilities & False Confessions
Criminalizing Disabilities & False ConfessionsCriminalizing Disabilities & False Confessions
Criminalizing Disabilities & False Confessions
 
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
Corporate Sustainability Due Diligence Directive (CSDDD or the EU Supply Chai...
 
An introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha PanditAn introduction to Indian Contract Act, 1872 by Shraddha Pandit
An introduction to Indian Contract Act, 1872 by Shraddha Pandit
 
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
ArtificiaI Intelligence based Cyber Forensic Tools: Relevancy and Admissibili...
 
Patents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future SolutionsPatents and AI: Current Tools, Future Solutions
Patents and AI: Current Tools, Future Solutions
 
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdfIslamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
Islamabad High Court Judges wrote a letter to Supreme Judicial Council.pdf
 
Classification of Contracts in Business Regulations
Classification of Contracts in Business RegulationsClassification of Contracts in Business Regulations
Classification of Contracts in Business Regulations
 
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
Women and the World of Climate Change- A Conceptual Foundation by Shraddha Pa...
 
The Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a TemplateThe Ultimate Guide to Drafting Your Separation Agreement with a Template
The Ultimate Guide to Drafting Your Separation Agreement with a Template
 

Court Rejects Coverage under All Risk Property Policy Where Partial Collapse of Building Was Not Caused "Only" by Weight of Contents and Equipment

  • 1. The Insurance Coverage Law Information Center The following article is from National Underwriter’s latest online resource, FC&S Legal: The Insurance Coverage Law Information Center. COURT REJECTS COVERAGE UNDER ALL-RISK PROPERTY POLICY WHERE PARTIAL COLLAPSE OF BUILDING WAS NOT CAUSED “ONLY” BY WEIGHT OF CONTENTS AND EQUIPMENT May 27, 2014 Steven A. Meyerowitz, Esq., Director, FC&S Legal A federal district court in Oregon, ruling in favor of an insurance carrier, has decided that an “all risk” property insurance policy did not cover a partial collapse of a building where the collapse was not directly and immediately caused “only” by the weight of contents and equipment in the building as required by the policy. The Case The Tarleton Building, a partial two story built in the 1940s and framed with five wood bowstring roof trusses, originally served as a farm supply store but was converted into an office building during the 1970s. Tarleton LLC acquired the building in 1998 and, since then, has leased the building for use as an office. Tarleton said that after it remodeled the building to add ceilings, platforms, duct work, steel pipes, electrical equipment, mechanical equipment, and sprinklers, one of the bowstring trusses ruptured, causing a collapse. Tarleton said that it repaired the building, installing conditioning units, wires, suspended ceilings, ceiling joists, and insulation. A few years later, another truss ruptured, fell five to eight inches, and landed on a non-load-bearing wall. Tarleton filed an insurance claim with State Farm Fire and Casualty Company, which had issued it an “all-risk” property insurance policy insuring the building. An engineer hired by State Farm to investigate the collapse concluded: We do not believe that the [truss] failure can be attributed to any particular single event. Rather, the damage appears to be the result of inadequately-sized truss members and connections from the original design and construction, with a progression of degradation of truss integrity over many decades along with likely increases in dead loads, which finally reached a tipping point.... State Farm denied Tarleton’s insurance claim, and Tarleton sued. State Farm moved for summary judgment. The Policy The all-risk property insurance policy insured against: accidental direct physical loss to covered property. An “Amendatory Collapse Endorsement” specified that State Farm would cover losses resulting from a building collapse if the collapse was: directly and immediately cause[d] only by one or more of the following: Call 1-800-543-0874 | Email customerservice@SummitProNets.com | www.fcandslegal.com
  • 2. a. any of the “Specified Causes of Loss” or breakage of building glass, only as insured against in this policy. b. weight of contents, equipment, animals or people c. weight of ice, snow, sleet or rain which collects on a roof; or d. use of defective material or methods in the construction (includes remodeling or renovation) of the building if the collapse occurs during the course of the construction of the building. The Court’s Decision The court granted State Farm’s motion. In its decision, the court first rejected Tarleton’s argument that summary judgment was inappropriate because the collapse was covered under the general “losses insured” section. In this case, the court found, the “accidental direct physical loss” language articulated policy coverage in very general terms, whereas the collapse endorsement specifically defined the bounds of coverage relating to “direct physical loss to covered property involving the sudden, entire collapse of a building or any part of a building.” Thus, the court ruled, the specific language of the collapse endorsement controlled the more general language of the “losses insured” section, and precluded recovery under the policy’s “accidental direct physical loss” language. With respect to the collapse endorsement, the court first agreed with Tarleton that the building’s roof, ceilings, electrical wiring, duct work, and other building materials that exhibited dead weight on the trusses were “contents and equipment” as contemplated by the parties. It then explained that, for Tarleton’s claim to survive summary judgment, the collapse must have been “directly and immediately caused only by” the weight of contents and equipment. In the court’s view, the phrase was open to multiple interpretations, and was ambiguous. However, it continued, the plain meaning of “only” as used in the policy meant that the policy would cover Tarleton’s loss “if the bowstring trusses ruptured due to the weight of contents and equipment alone, without another direct and immediate cause contributing to the collapse.” The court pointed out that Tarleton’s expert had opined that hot air in the building’s attic prior to the collapse had weakened the wooden trusses and had contributed to the collapse, going so far as to call the attic temperatures a “trigger” of the collapse. The court then ruled that the collapse was not caused by the weight of contents and equipment “without anyone or anything else,” but that it had occurred due to the combination of multiple causes: Here, dead load in the form of air conditioning equipment, “wires, suspended ceilings, ceiling joists, and insulation” were added …, but the truss did not collapse immediately after the new equipment was installed. The cause which had the closest temporal relationship to the collapse, and was most variable in the time-period preceding the collapse, was the attic temperature. If there is one direct and immediate cause which was “closest in time” to the events in question, it was the high temperature in the Tarleton building’s attic. Thus, the court concluded, Tarleton’s loss was not “directly and immediately caused only” by the weight of contents and equipment, and State Farm had not breached the insurance policy by refusing coverage. The case is Tarleton LLC v. State Farm Fire and Cas. Co., No. 3:12–CV–00989–AC (D. Ore. May 21, 2014). Attorneys involved include: Christopher Grady, Dean E. Aldrich, Aldrich Eike, PC, Portland, OR, for Plaintiff; Diane L. Polscer, Brian C. Hickman, Paul A. Mockford, Gordon & Polscer, LLC, Portland, OR, for Defendant.Resident in the firm’s Newark, New Jersey, office, the authors may be contacted at frederic.giordano@klgates.com and robert.pawlowski@klgates.com, respectively. Call 1-800-543-0874 | Email customerservice@SummitProNets.com | www.fcandslegal.com
  • 3. Call 1-800-543-0874 | Email customerservice@SummitProNets.com | www.fcandslegal.com Copyright © 2014 The National Underwriter Company. All Rights Reserved. NOTE: The content posted to this account from FC&S Legal: The Insurance Coverage Law Information Center is current to the date of its initial publication. There may have been further developments of the issues discussed since the original publication. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice is required, the services of a competent professional person should be sought. For more information, or to begin your free trial: • Call: 1-800-543-0874 • Email: customerservice@SummitProNets.com • Online: www.fcandslegal.com FC&S Legal guarantees you instant access to the most authoritative and comprehensive insurance coverage law information available today. This powerful, up-to-the-minute online resource enables you to stay apprised of the latest developments through your desktop, laptop, tablet, or smart phone —whenever and wherever you need it.