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Log in or RegisterState Auto Prop. & Cas. Ins. Co. v. Distinctive Foods, LLC (2024)
The complaint did not allege an occurrence but rather only alleged intentional conduct.
Does Coverage Apply to a Vehicle Driven by the New Owner after the Insured Sold the Vehicle without Canceling the Policy? 2024.05.15
The insured sold a business vehicle and handed it over to the buyer. It was titled in the new owner’s name. Months later the new owner struck a parked vehicle. The owner of the parked vehicle is asserting a claim against the insured, who never removed the vehicle from the policy. Does the insured’s policy afford Liability Coverage for the claim?
EARTH MOVEMENT EXCLUSION: DOES IT APPLY TO A FALLING ROCK?
FACTS The insured's home is covered under an ISO HO 00 03 03 22 form. The home was damaged when a boulder from a cliff high above the home rolled down and hit the back corner of the house. The falling of the large boulder caused other rocks to be dislodged when it hit the cliff, and some of the other rocks also hit the home. QUESTION Is there coverage for the damage to the home caused by the falling boulder? POLICY LANGUAGE ISO HO 00 03 03 22 SECTION I - EXCLUSIONS We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss. These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area. . . . Earth Movement Earth movement means: Earthquake, including land shock waves or tremors before, during or after a volcanic eruption; Landslide, mudslide or mudflow; Subsidence or sinkhole; or Any other earth movement including earth sinking, rising or shifting. This Exclusion A.2. applies regardless of whether any of the above, in A.2.a. through A.2.d., is caused by an act of nature or is otherwise caused. However, direct loss by fire, explosion or theft resulting from any of the above, in A.2.a. through A.2.d., is covered. DISCUSSION Does the Earth Movement exclusion apply to the damage where a boulder fell off a cliff, dislodged other rocks, and damaged the home? The policy states that earth movement means earthquake and other events, including landslide, and any other earth movement including earth sinking, rising or shifting. Would falling rocks be considered a landslide? We are only aware of two cases involving falling rocks where soil or other land was not involved in the "slide". The most recent case involving this type of scenario is Sullivan v. Nationwide Affinity Ins. Co. of Am., No. 20-1063, 2021 WL 79765 (10th Cir. 1/11/21) (unpublished) (U.S. Court of Appeals for the Tenth Circuit, applying Colorado law) [reviewed at PLRB, Prop. Ins. L. Rev. 10860 (2021)], where an earth movement exclusion encompassed falling rocks or boulders that became dislodged and rolled down a hillside and collided with the insured home. The term "landslide" and the catch-all phrase "[a]ny other earth movement including earth sinking, rising or shifting" were broad enough to encompass falling rocks or boulders. Consequently, the exclusion unambiguously precluded coverage for the damage that occurred when one or more boulders became dislodged from the hill above, tumbled down, and rolled into the policyholders' home. Previously, Parker v. Safeco Ins. Co. of Am., 376 P.3d 114 (Mont. 7/19/16)[reviewed at PLRB, Prop. Ins. L. Rev. 9495 (2016)], held that the earth movement exclusion precluded coverage for damage to a cabin caused by a boulder that fell down a hillside and into the insured cabin. The Montana Supreme Court read the exclusion as broadly excluding coverage for any and all types of earth movement. The term "earth" included rocks as well as soil. The court held that nothing in the language of the exclusion suggested that "earth" was limited to soil. The term "landslide" in the context of the exclusion clearly applied to damage caused by a single, large boulder, and not just to two or more rocks or pieces of rock falling down a hillside. Before the Sullivan and Parker cases, there were a few cases involving falling rocks which also involved soil. In Western United Insurance Co. v. Heighton, 2016 WL 4916785 (D. Utah 9/14/16) (U.S. District Court for the District of Utah, applying Utah law) [reviewed at PLRB, Prop. Ins. L. Rev. 9545 (2016)], an earth movement exclusion in a homeowners policy precluded coverage for damage caused by a rockfall. The loss occurred when a "2700 ton piece of the bluff broke off, hit a steep slope, and triggered a downward shifting of a mass of rocks and soil toward [the insured] house." The earth movement exclusion specifically excluded loss or damage caused by "landslide." Although "landslide" was not defined in the policy, the ordinary meaning of the term included a rockfall. Consequently, the Earth Movement exclusion unambiguously applied to the loss. The court in Erie Ins. Property and Cas. Co. v. Chaber, 801 S.E.2d 207 (W.Va. 6/01/17) (West Virginia Supreme Court of Appeals, applying West Virginia law) [reviewed at PLRB, Prop. Ins. L. Rev. 9750 (2017)], noted in a footnote that Murray v. State Farm Fire & Cas. Co., 509 S.E.2d 1 (W.Va. 1998) [reviewed at PLRB, Prop. Ins. L. Rev. 5270 (1999) ], was helpful because it clarified the meaning of the word "landslide" as used in the insurance policy. It stated that the ordinary meaning of the word "landslide" in an insurance policy would include a sliding down of a mass of soil or rock on or from a steep slope. Several cases have defined landslide as the sliding or slipping down of a mass of soil or earth or rock down a steep slope. See Olmstead v. Lumbermens Mut. Ins. Co., 259 N.E.2d 123 (Ohio 1970), and Niagara Fire Ins. Co. v. Curtsinger, 361 S.W.2d 762 (Ky. App. 1962) where the courts considered the ordinary meaning of the term "landslide" as used in a policy covering the building to be the sliding down of mass of soil or rock on steep slope). Conclusion Based on these cases, to the extent that the loss here was due to large rocks or boulders sliding or falling down a steep slope, the damage to the home would arguably be treated as a landslide, and thus barred from coverage by the earth movement exclusion. Change in Policy Language Note that before the 2000 edition of the HO 00 03 policy, despite language designed to avoid such a result, many courts applied the exclusion only to events that were both natural and catastrophic. In the 2000 form, it was spelled out for the first time that the exclusion applies whether or not the event results in widespread damage and whether or not it is caused by human or animal forces. For a discussion of the Earth Movement exclusion and how it has been applied in various states, see PLRB, State-by-State Annotations, Earth Movement.
Ventilation and Reroofing or Roof Replacement in Fort Lupton, CO
QUESTION: For a private residence in Fort Lupton, Colorado, is ice and water shield required at eaves and valleys when completing a reroofing project? RESPONSE: Yes. The 2012 International Residential Code (IRC) was adopted by the City of Fort Lupton, Colorado, as the residential code for the City. Section R905.2.7.1 covers ice barrier requirements and does not require ice and water shield, ice barrier underlayment, unless there is a history of ice forming along the eaves causing a backup of water, which is left to local jurisdictions to determine and adopt the requirement. Fort Lupton completed Table R301.2(1) and indicated “Yes” in the “Ice Barrier Underlayment Required” column. Possibly. Valley linings are covered in section R905.2.8.2, separately from the Ice Barrier Underlayment requirement of Section R905.2.7.1. The valley lining requirements permit different methods of underlayment, including self-adhering polymer-modified bitumen underlayment complying with ASTM D1970 (aka ice barrier underlayment), but the code does not require this underlayment. The IRC requires roof coverings be installed pursuant to manufacturer’s instructions throughout Chapter 9, including the valley lining provisions. Consultation of the manufacturer’s instructions is necessary to determine if ice barrier underlayment is required in valleys. FACTS: Roof replacement on insured's home located in Fort Lupton, Colorado. DISCUSSION: Colorado has no mandatory statewide residential code for privately owned one- or two-family dwellings and townhomes. Counties may adopt, administer, enforce, and amend building codes for all types of buildings and structures, except for those buildings and structures used only for shelter for agricultural implements, farm products, livestock, or poultry. C.R.S. 30-28-201(1) (authority to adopt); C.R.S. 30-28-205(1) (enforcement); C.R.S. 30-28-204 (amendment). Building codes must be promulgated “with a reasonable consideration of, and in accordance with, the public health, safety, morals, and general welfare and the safety, protection, and sanitation of such dwellings, buildings and structures.” C.R.S. 30-28-203. Municipalities, like counties, may enact building codes. C.R.S. 31-15-601(2) (municipal building and fire regulations); Colo. Const. Art. XX, § 6 (home rule powers). The authority to establish building codes implicitly includes the power to enforce the content of the codes. West Adams County Fire Protection District v. Adams County School District 12, 926 P.2d 172, 175-76 (Colo. App. 1996). Pursuant to its home rule powers, the City of Fort Lupton adopted the 2012 International Residential Code (IRC), with amendments. Fort Lupton, Colorado, Municipal Code, Chapter 18, Article XI, § 18-221. 2012 IRC Reroofing Section R907 of the 2012 IRC on Reroofing requires that recovering or replacing an existing roof must comply with the materials and methods outlined for new roofs in Chapter 9. 2012 IRC § R907.1. Therefore, the provisions concerning ice barrier underlayment in Chapter 9 must be considered. ICE BARRIER UNDERLAYMENT Ice barrier underlayment is required under Section R905.2.7.1 where there is a history of ice forming along eaves as designated in local amendments in Table R301.2. 2012 IRC § R905.2.7.1. Pursuant to Section R905.2.7.1, the City of Fort Lupton completed Table R301.2(1) indicating “YES” that ice barrier underlayment is required. Fort Lupton, Colorado, Municipal Code, Chapter 18, Article XI, § 18-225. Accordingly, the City of Fort Lupton requires the installation of ice barrier underlayment at the eaves when installing or replacing a roof. Valley Lining and Underlayment In general, roof covering material should be installed in accordance with the manufacturer's installation instructions: Roof coverings shall be applied in accordance with the applicable provisions of this section and the manufacturer's installation instructions. Unless otherwise specified in this section, roof coverings shall be installed to resist the component and cladding loads specified in Table R301.2(2), adjusted for height and exposure in accordance with Table R301.2(3). 2012 IRC § R905.1. Valley linings are covered separately under Section R905.2.8.2: “Valley linings shall be installed in accordance with the manufacturer's instructions before applying shingles. Valley linings of the following types shall be permitted: For open valleys (valley lining exposed) lined with metal, the valley lining shall be not less than 24 inches (610 mm) wide and of any of the corrosion-resistant metals in Table R905.2.8.2. For open valleys, valley lining of two plies of mineral-surfaced roll roofing, complying with ASTM D3909 or ASTM D6380 Class M, shall be permitted. The bottom layer shall be 18 inches (457 mm) and the top layer not less than 36 inches (914 mm) wide. For closed valleys (valley covered with shingles), valley lining of one ply of smooth roll roofing complying with ASTM D6380 and not less than 36 inches wide (914 mm) or valley lining as described in Item 1 or 2 shall be permitted. Self-adhering polymer-modified bitumen underlayment complying with ASTM D1970 shall be permitted in lieu of the lining material.” 2012 IRC § R905.2.8.2. Subsections 1 and 2 are specifically cited for open valleys but the listed installation methods are permitted for closed valleys in subsection 3. Subsection 1 includes metal valleys with specifications but no installation instructions. Subsection 2 allows for two plies of roll roofing. Subsection 3 is specific to closed valleys and allows for one ply of roll roofing, either method described in the other subsections, or ice and water shield (ice barrier underlayment) material. (Note: "Self-adhering polymer-modified bitumen underlayment complying with ASTM D1970" is a technical way of referring to ice barrier underlayment). This suggests that standard underlayment cannot be used as a replacement for valley liners. CONCLUSION: The City of Fort Lupton, Colorado, adopted the 2012 IRC and completed Table 301.2(1) to require the installation of ice barrier underlayment at the eaves when installing or replacing a roof. Valley linings are treated separately in the IRC and there is no specific requirement for ice barrier underlayment, though it is cited as a permissible underlayment option for closed valleys. The manufacturer's instructions must be considered to determine what underlayment is required for open or closed valleys. 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