An insurance coverage dispute arose related to two excavators owned by Stan Weeks & Associates, Inc. (Weeks), an excavation and mining company, that were damaged after a man-made levee failed and flooded a dry shell mine where the excavators were located. Evanston disclaimed coverage due to the application of two Policy exclusions- a Ground Movement Exclusion and a Water Damage Exclusion. The Policy’s exclusions section also contained anti-concurrent wording which excluded coverage regardless of whether any covered cause also contributed to the loss as long as an excluded cause was involved. The Court found that the Policy wording was unambiguous and that the facts material to coverage were undisputed- a man-made soil levee separating a retaining pond from a dry shell mine pit was washed out due to natural erosion. That caused the water from the retaining pond to flow into the active mining pit where the excavators were located, rising high enough to submerge both, as depicted in claim photos. The Court rejected the insured’s argument that because the berm was man-made, its failure was not a “natural phenomena,” and therefore the exclusions did not apply. The Court held, in agreement with Evanston, that the damage to the excavators was caused by natural movement of the water – that is the overflow of a body of water, flood, or rising waters that came from the berm washout between the retaining ponds. Despite the retention pond, levee, and/or berm being manmade, there was no evidence that the cause(s) of the failure of the manmade object were due to manmade action.
HM&B Partner, Krista Fowler Acuña and Senior Associate, Zak T. Colangelo, were the lawyers who secured summary final judgment for Evanston in this matter.