Western District Of Washington Finds Question Of Fact As To Whether Winter Weather Constituted One Or More "Occurrences" Under First Party Policy Where Term Undefined
In Western & Clay, LLC v. Landmark American Ins. Co., et al., 2010 U.S. Dist. LEXIS 123382 (November 22, 2010), on cross motions for summary judgment, the Western District of Washington held that under first party policies in which the term “occurrence” was not defined, it was a jury question whether Seattle, Washington’s 2006 – 2007 winter weather constituted one or more “occurrences.”
Landmark and Axis’ first party policies provided coverage to developer Western & Clay for “one loss or series of losses arising out of one occurrence” and insured against “all perils.” “Weather,” although not defined, was a covered peril.
In spring 2008 Western & Clay submitted a proof of loss for a claim that the winter of 2006 – 2007 caused substantial delay and costs in a large construction project. It argued the cause of the damage was a combination of events involving wind and rain storms, that the weather affected the critical path of the project and caused substantial delays. It asserted its weather claim was one “occurrence” so would be subject to just one deductible and one 30 day waiting period. It submitted no expert reports in support of its position.
Landmark and Axis argued the alleged losses constituted multiple “occurrences” because the term “occurrence” with regard to weather has an implicit temporal, spatial and causal limitation under the policies. They submitted two expert reports on 2006 – 2007 winter weather patterns purporting to show there were multiple storms and weather patterns that winter.
The court noted Western & Clay’s theory of its weather related claim changed from one brief to the next, first arguing the “occurrence” was the continual bad weather, then later arguing it was the fact that weather-related delays caused the building to be unenclosed due to continual inundation of water, ice and snow. The court found the insured’s shifting position highlighted the lack of clarity as to the legal and factual issues before it. Moreover, it dismissed as circular defendants’ expert reports because they assumed storms and weather patters could not be one “occurrence” under the policies.
Rejecting the insured’s reliance on cases construing “occurrence” under third party policies in which “occurrence” was a defined term, the court used a dictionary to find an “occurrence” was “something that takes place or comes about.” It also refused to find a temporal limitation on weather related losses, noting the policies had temporal limitations for windstorms, earthquakes and lightening but not weather.
Given the inadequate record on number of occurrences, the court was unable to rule as a matter of law how many occurrences constituted Western & Clay’s weather related claims. Citing approvingly to Newmont Mines v. Hanover, 784 F.2d 127 (2nd Cir. 1986), in which the court sent to the jury the question of whether two roof collapses on the same building covered in snow on different days were one or more occurrences, the court held a fact finder had to resolve the issue.
