Vision One, LLC v. Philadelphia Indemnity Insurance
174 Wash. 2d 501
| Wash. | 2012Background
- Vision One and Vision Tacoma contracted to develop a downtown Tacoma condominium project.
- D&D Construction poured concrete and subcontracted shoring by Berg Equipment & Scaffolding; collapse occurred when shoring gave way.
- Vision carried a builders’ risk all-risk policy with Philadelphia; policy exclusions included defective design and faulty workmanship, with a faulty workmanship resulting-loss clause.
- Philadelphia denied the claim, asserting the loss was caused solely by defective design and faulty workmanship, with no ensuing-loss coverage.
- The Court of Appeals reversed and remanded for a jury determination on efficient proximate cause; this court reinstates the trial court’s coverage ruling.
- The extra-expense endorsement provided up to $1 million for certain delay-related losses; the scope of coverage for soft costs was disputed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the ensuing loss clause cover collapse damages here? | Vision argued collapse damages are ensuing losses covered under faulty workmanship. | Philadelphia contended the loss was caused by excluded design/workmanship and ensuing loss does not apply. | Yes; collapse damages are covered as an ensuing loss under the policy. |
| What role does the efficient proximate cause rule play in this case? | Efficient proximate cause may allow coverage if a covered peril is the efficient cause in the chain. | Efficient proximate cause may be invoked to deny coverage when an excluded peril initiates the chain. | The rule is a tool for interpretation but not a basis to deny coverage here; causation is resolved under the policy language. |
| Can the denial letter restrict reliance on the policy's causation prongs? | The denial letter does not bar applying a broader causation theory raised elsewhere. | The denial letter precludes relying on a causation theory not asserted in denial. | Philadelphia is precluded from invoking an alternate causation prong; analysis must follow the denial language. |
| Does the extra-expense endorsement extend coverage to soft delay costs? | Soft costs listed in the endorsement should be covered beyond the general policy limits. | Soft costs are not covered because the policy covers physical losses to property; the endorsement is limited to $1 million for specified delay losses. | No; soft costs are not covered beyond the endorsement’s $1 million and are not physical property losses. |
Key Cases Cited
- Capelouto v. Valley Forge Ins. Co., 98 Wn. App. 7, 990 P.2d 414 (Wash. Ct. App. 1999) (ensuing loss and causation framework for exclusions)
- Findlay v. United Pac. Ins. Co., 129 Wn.2d 368, 917 P.2d 116 (Wash. 1996) (policy coverage interpretation; all-risk context)
- Key Tronic Corp. v. Aetna (CIGNA) Fire Underwriters Ins. Co., 124 Wn.2d 618, 881 P.2d 201 (Wash. 1994) (efficient proximate cause rule explained; coverage in favor when covered peril predominant)
- Kish v. Ins. Co. of N. Am., 125 Wn.2d 164, 883 P.2d 308 (Wash. 1994) (causation in multi-peril scenarios)
- McDonald v. State Farm Fire & Cas. Co., 119 Wn.2d 724, 837 P.2d 1000 (Wash. 1992) (all-risk vs exclusions; ensuing loss logic)
- Safeco Ins. Co. of Am. v. Hirschmann, 112 Wn.2d 621, 773 P.2d 413 (Wash. 1989) (efficient proximate cause rule application and coverage)
- Wright v. Safeco Ins. Co. of Am., 124 Wn. App. 263, 109 P.3d 1 (Wash. Ct. App. 2004) (ensuing loss limitations within exclusions framework)
- Olympic Steamship Co. v. Centennial Insurance Co., 117 Wn.2d 37, 811 P.2d 673 (Wash. 1991) (fees recovery following coverage determination)