Madison - St. Clair Record

Thursday, September 19, 2019

Court grants Hartford Fire Insurance summary judgment in flood damage case

By Robert Davis | Apr 2, 2018


BENTON — The U.S. District Court for the Southern District Court of Illinois granted Hartford Fire Insurance Co.'s motion for summary judgment on March 23, citing certain exclusions in its coverage policy maintained the company could not be held liable for property damage stemming from a burst pipe. 

U.S. Magistrate Donald Wilkerson wrote that a summary judgment is appropriate when the "moving party can demonstrate 'that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law,'” according to the Federal Rule of Civil Procedure.

Because the leakage was "was the initial incident, not something that resulted from a flood or other related event," the court granted the summary judgment in favor of Hartford. 

The case stems from a 2014 claim Zeller Properties Inc. filed after a pipe burst to replace the pipe and affected landscaping as well as the installation of a VeraShield moisture barrier system. According to information in the ruling, Hartford paid $25,000 for “water seepage” and $4,597.16 under the “tear out and repair” provision for landscaping. 

The claim was based on Zeller Properties' November 2012 realization of "adhesive oozing" beneath an office space leased to Hyatt Hotels that was due to excessive moisture. In October 2013, the water pipe beneath the office ruptured and flooded the front of the building. 

According to the ruling, Hartford declined to "to pay for replacing the burst pipe itself or for any specific preventative measures, like the VeraShield moisture barrier system, due to certain exclusions in the policy." 

Zeller contended that the policy "necessitate[d] paying on the claim for the burst pipe," the court wrote.

Hartford's policy exclusion reads, "If direct physical loss or direct physical damage by fire, explosion or 'Sprinkler Leakage' ensues to covered property, we will pay only for such ensuing loss or damage," according to the ruling. The court found this to mean Zeller would pay for damages after such an event occurs. 

"The leakage in this scenario was the initial incident, not something that resulted from a flood or other related event," the court wrote in granting summary judgment.

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U.S. District Court for the Southern District of Illinois