Randal Strauss v. Chubb Indemnity Insurance Comp
2014 U.S. App. LEXIS 21794
| 7th Cir. | 2014Background
- Strausses insured their Mequon home with a Chubb first-party policy from 1994–2005; later insured by other providers.
- Water intrusion damage occurred during construction and progressed over time, but was not discovered until 2010; policy periods spanned 1994–2005 (with gaps) for Chubb and other carriers.
- Strausses filed a claim December 22, 2010; insurers denied coverage on grounds of manifestation timing and statute of limitations.
- District court adopted a continuous trigger theory, applying coverage for the entire progressive loss under the policy language.
- Chubb appeals arguing manifestation trigger applies universally to first-party policies and that suit was untimely; court affirms the district court.
- Wisconsin law governs trigger determination and timeliness, focusing on policy language and contract interpretation
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether continuous trigger or manifestation governs first-party coverage | Strausses rely on continuous trigger based on policy language | Chubb seeks manifestation trigger as universal rule | Continuous trigger governs the policy |
| Whether policy language dictates timeliness of suit | Suit timely within one year after discovery and completion of loss | Suit outside statute of limitations meant to bar claim | Timely; clock runs through progression to discovery under continuous trigger |
| Whether Wisconsin law requires one trigger theory uniformly across policies | Wisconsin law allows policy-language-based determination | Public policy favors bright-line manifestation trigger | Wisconsin law does not require a universal trigger; contract language controls |
| Whether the policy language warrants full coverage for latent damage | Policy covers all risk of physical loss during policy periods | Damage not within policy periods; no coverage | Policy language dictates continuous coverage for ongoing occurrence; coverage affirmed |
Key Cases Cited
- Prudential-LMI Commercial Ins. v. Super. Ct., 51 Cal.3d 674 (Cal. 1990) (premised on policy language and trigger concepts)
- Miller v. Safeco Ins. Co. of Am., 683 F.3d 805 (7th Cir. 2012) (rejects universal bright-line rule limiting triggers; supports policy-language approach)
- Kremers-Urban Co. v. Am. Emp’rs Ins. Co., 119 Wis.2d 722 (Wis. 1984) (policy language governs coverage decisions)
- Johnson Controls, Inc. v. London Market, 325 Wis.2d 176 (Wis. 2010) (language-focused contract interpretation in insurance)
- Plastics Eng’g Co. v. Liberty Mut. Ins. Co., 315 Wis.2d 556 (Wis. 2009) (continuous trigger evidenced by policy language)
- Am. Girl, Inc. v. Am. Family Mut. Ins. Co., 268 Wis.2d 16 (Wis. 2004) (ambiguity resolved in insured’s favor when applicable)
- Soc’y Ins. v. Town of Franklin, 233 Wis.2d 207 (Wis. Ct. App. 2000) (continuous trigger principle tied to policy terms)
- State Farm Mut. Auto. Ins. Co. v. Cont’l Cas. Co., 174 Wis.2d 434 (Wis. Ct. App. 1993) (resolves coverage disputes based on negotiated terms)
- Wis. Elec. Power Co. v. Cal. Union Ins. Co., 142 Wis.2d 673 (Wis. Ct. App. 1987) (policy language-focused analysis of coverage)
- Riteway Builders, Inc. v. First Nat’l Ins. Co. of Am., 22 Wis.2d 418 (Wis. 1964) (interpretation of inception vs. loss under statute governs timeliness)
- Borgen v. Econ. Preferred Ins. Co., 176 Wis.2d 498 (Wis. Ct. App. 1993) (inception vs. loss timing shapes statute of limitations)