Erie Insurance Property and Casualty v. Dimitri and Mary Chaber
239 W. Va. 329
| W. Va. | 2017Background
- Respondents (Dimitri and Mary Chaber) owned a commercial rental property; a motorcycle shop unit was damaged when rock and soil fell from a steep slope behind the property on Feb. 19, 2014.
- Respondents submitted a property-damage claim to Erie Insurance; Erie adjuster Stephen Myers inspected and denied coverage based on the policy’s earth-movement (including landslide/rockfall) exclusion.
- Policy exclusion expressly stated it applies “regardless of whether any of the above . . . is caused by an act of nature or is otherwise caused,” but contained an ensuing-loss clause excepting coverage for specified perils (including building glass breakage) that result from earth movement.
- Experts retained by the parties disputed causation: Erie’s engineer attributed the fall to seasonal rockfall; Respondents’ expert attributed it to improper excavation (man-made causes).
- Circuit court granted declaratory judgment for Respondents, finding the exclusion ambiguous as to man-made vs. natural causation and construing the ensuing-loss clause in their favor; Erie appealed to the Supreme Court of Appeals of West Virginia.
- The Supreme Court of Appeals reversed, holding the earth-movement exclusion unambiguous (excluding losses caused by natural or man-made events) and that the ensuing-loss clause provides only a narrow exception limited to specified ensuing perils (here, glass breakage), which was below the deductible.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the earth-movement exclusion is ambiguous as to natural vs. man-made causes | Exclusion ambiguous; where both natural and man-made causes exist, insureds reasonably expect coverage | Exclusion unambiguously excludes earth movement losses "regardless of whether . . . caused by an act of nature or is otherwise caused" | Exclusion is unambiguous and excludes losses whether man-made or natural |
| Whether efficient proximate-cause or anti-concurrent-causation principles require coverage | If man-made excavation was the proximate cause, the loss should be covered | If the exclusion bars both natural and man-made causes, proximate-cause analysis is irrelevant | Proximate-cause and anti-concurrent-causation analyses are unnecessary once the exclusion is applied |
| Whether the ensuing-loss clause revives coverage for the full loss | Ensuing-loss clause ambiguous; could be read to cover all damage resulting from the rockfall | Ensuing-loss clause is narrow and only covers specified ensuing perils (e.g., glass breakage) | Ensuing-loss clause is narrow: it covers only the specified ensuing perils, not the excluded event itself |
| Whether insureds’ reasonable expectations override clear policy language | Insureds reasonably expected coverage for this damage | Reasonable-expectations doctrine applies only if policy terms are ambiguous | Doctrine inapplicable because policy language is clear and unambiguous |
Key Cases Cited
- Cox v. Amick, 195 W.Va. 608 (1995) (declaratory-judgment entry reviewed de novo)
- Pub. Citizen, Inc. v. First Nat’l Bank, 198 W.Va. 329 (1996) (bench-trial findings: two-pronged deferential review; questions of law de novo)
- Surbaugh v. Stonewall Casualty Co., 171 W.Va. 390 (1981) (standard for policy ambiguity)
- Murray v. State Farm Fire & Cas. Co., 203 W.Va. 477 (1998) (interpreting “landslide” and discussing ambiguity issues in earth-movement clauses)
- Vision One, LLC v. Philadelphia Indem. Ins. Co., 276 P.3d 300 (Wash. 2012) (ensuing-loss clause preserves coverage for specified ensuing losses but does not cover excluded event)
- BSI Constructors, Inc. v. Hartford Fire Ins. Co., 705 F.3d 330 (8th Cir. 2013) (refusing to create ambiguity in ensuing-loss language)