837 F. Supp. 2d 570
E.D. Va.2011Background
- Great American Insurance Company seeks a declaratory judgment on its obligation under an Agripak Farm and Ranch Policy for a wall collapse on Rose Marie Bogley's Upperville, Virginia property.
- On March 13, 2010, a wall attached to a farm building collapsed; at that time the building was insured under the Policy issued by Plaintiff.
- Plaintiff assigned engineer Nguyen to determine the cause; Nguyen attributed the collapse to lateral earth and hydrostatic pressure due to poor drainage and unreinforced foundation retaining wall.
- Defendant retained Painter, who opined the collapse resulted from the weight of snow and ice and subsequent freezing/thawing creating a lateral load on the wall.
- The Policy contains exclusions: Section B excludes coverage for loss by pressure or weight of water on a foundation or retaining wall; Section C excludes earth movement, including soil-related conditions, from coverage.
- The Court grants summary judgment for Plaintiff based on these explicit exclusions, denying coverage for the wall collapse.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Section B exclude coverage for the wall collapse? | Exclusion applies to pressure/weight of water on foundation/retaining wall. | Wall may not be a foundation/retaining wall under the policy terms. | Yes, exclusion applies; no coverage. |
| Does Section C's earth movement exclusion bar coverage even if other causes contributed? | Earth movement exclusion bars coverage regardless of other causes. | If multiple causes exist, coverage could still apply for some. | Yes, earth movement exclusion bars coverage. |
Key Cases Cited
- Lower Chesapeake Associates v. Valley Forge Ins. Co., 260 Va. 77 (2000) (earth movement exclusion applies even with other contributing causes)
- Va. Farm Bureau Mut. Ins. Co. v. Williams, 278 Va. 75 (2009) (contract interpretation favors coverage when ambiguity exists)
- S. Ins. Co. of Va. v. Williams, 263 Va. 565 (2002) (policy terms construed from four corners)
- Johnson v. Ins. Co. of N. Am., 232 Va. 340 (1986) (ambiguity resolved against insurer; exclusions construed against insurer)
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) (choice-of-law governs contract interpretation)
- Floyd v. N. Neck Ins. Co., 245 Va. 153 (1993) (ambiguous terms resolved in favor of clear words; enforce policy as drafted)
- Buchanan v. Doe, 246 Va. 67 (1993) (place of delivery governs governing law for insurance contracts)