PS Partner: J. Phillip Bryant
We represented: Mount Vernon Fire Insurance Company
Venue: U.S. District Court, Eastern District of Missouri
SJP Properties, Inc. is in the business of buying and selling foreclosed properties. On July 13, 2006 it purchased the subject property at a foreclosure sale. SJP did not inspect the property at any time before or after its purchase. Without an interested buyer, the property sat vacant for more than two years. No one regularly checked on the property during that time.
The property was insured by defendant Mount Vernon Fire Insurance Company throughout its ownership by SJP. Among other provisions, the policies contained a clause providing coverage for vandalism, an exclusion for loss or damages “caused by or resulting from theft” and an exception to the theft damage exclusion for “building damage caused by the breaking in or exiting of burglars.”
On October 21, 2008 SJP discovered that the property was broken into and burglarized. SJP claims that kitchen cabinets, copper pipes and wiring had been stolen. The burglars damaged the property to extract the copper piping. SJP claims the damages were the result of the covered peril of vandalism and were not caused by the excluded peril of theft. SJP also sought unspecified damages for vexatious refusal.
Mount Vernon contended that the damages resulted from theft and are excluded from coverage. Even if the theft exclusion did not apply, Mount Vernon pointed to other policy provisions that exclude damages caused by continuous discharge of water from a plumbing system for 14 days or more, or by fungus, wet rot, dry rot or bacteria. Mount Vernon’s expert opined that, in fact, water discharged for more than 14 days. SJP provided not opinion to the contrary. The court’s Opinion agreed with Mount Vernon’s assessment and found that insurance coverage is not afforded for the claimed loss.
Verdict: Motion for Summary Judgment