Stor/Gard, Inc. v. Strathmore Insurance
717 F.3d 242
1st Cir.2013Background
- SGI-Walpole and Stor/Gard own/manage property in Walpole, MA insured by Strathmore; case is diversity on an all-risks policy governed by Massachusetts law.
- March 2010 nor'easter caused heavy rainfall and a landslide that damaged a self-storage building, due to soil movement against a retaining wall.
- Policy exclusions include earth movement (landslide) and weather-related exclusions; there is an additional coverage for collapse that requires collapse caused by listed perils, including water damage.
- Investigations (AEGIS and GZA) attributed the loss to rain and slope issues, with pipe leakage deemed negligible or non-contributing; no expert linked leakage to the collapse.
- Strathmore denied coverage citing exclusions; SGI-Walpole/Stor/Gard sued for breach and 93A violation; magistrate judge granted Strathmore summary judgment; on de novo review this court affirms while differing in reasoning.
- The court affirms because water-leakage could not be shown as the efficient proximate (predominant) cause of the collapse, and the anticoncurrent-cause clause in the exclusion section bars coverage for losses caused in part by a landslide, despite the purported coverage in the collapse provision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether anticoncurrent-cause language bars coverage despite additional-collapse coverage. | SGI-Walpole/Stor/Gard contend anticoncurrent clause is not applicable to the additional-coverage provision. | Strathmore argues the exclusion applies to any loss caused in part by an excluded peril, overriding any additional-coverage language. | Yes; anticoncurrent-cause clause bars coverage. |
| Whether the additional-coverage for collapse can provide coverage for a water-damage-related collapse. | Additional coverage covers water damage, which could cause collapse. | Exclusions apply to the loss; water damage must be predominant or a covered cause under collapse; exclusions control. | No; exclusions apply to the loss despite water-damage language. |
| Whether the pipe leakage was the efficient proximate cause of the collapse. | Leakage contributed to, or caused, the collapse. | Leakage was negligible and not the cause; rain and poor drainage were dominant. | No; leakage not the predominant or initiating cause; not sufficient to trigger coverage. |
Key Cases Cited
- Boazova v. Safety Ins. Co., 968 N.E.2d 385 (Mass. 2012) (efficient proximate cause and concurrent causation in MA insurance law)
- Jussim v. Mass. Bay Ins. Co., 610 N.E.2d 954 (Mass. 1993) (train-of-events/efficient proximate cause approach)
- Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) (federal-law standard for choice of law in contract/causation)
- Timpson v. Transamerica Ins. Co., 669 N.E.2d 1092 (Mass. App. Ct. 1996) (Mass. appellate treatment of insurance coverage and exclusions)
- RTR Techs., Inc. v. Helming, 707 F.3d 84 (1st Cir. 2013) (summary-judgment review standards and flexibility)