Plain meaning of “roof” does not include “temporary roof structures”
July, 2006
Bullivant attorneys recently achieved summary judgment for Farmers Insurance Exchange in a case involving a claim by owners of an apartment building, where rain had penetrated a temporary roof structure on the building and damaged the interior contents. Aginsky v. Farmers Ins. Exch., 409 F Supp 2d 1230 (D Or 2005).
In 1996, Farmers issued a property insurance policy to cover the apartment building owned by the insureds. In early 2003, the insureds decided to re-roof one of their three apartment buildings and, in February 2003, the insureds entered into a contract with a roofing contractor to perform that work.
The roofing contractor completely removed the roof of the entire apartment building. Later, the project came to a standstill because of structural problems with the building and because the roofing contractor and the insureds were not able to agree on a price for the remaining work on the project.
With the project at a standstill and the building's roof removed, the roofing contractor initially laid tarps flat on the roof and later constructed a temporary roof structure using more tarps. The temporary roof structure included walls, a joisting system and pitched tarps to run water to the outside of the building. The original flat-tarped system was also left in place.
In March 2003, allegedly due to high winds, rain water penetrated the temporary tarps and entered the building causing damage. The insureds filed a claim with Farmers, which denied the claim based on several exclusions and a limitation whereby the company:
"will not pay for any loss…to the interior of any building or structure, or to personal property in the building or structure, caused by or resulting from rain…unless…the building or structure first sustains damage by a Covered Cause of Loss to its roof or walls through which the rain…enters."
Following denial of the claim, the insureds filed suit against Farmers, and Farmers filed a Motion for Summary Judgment. In granting Farmers' Motion, the District Court held that the term "roof" as used in the policy is not ambiguous and contemplates a permanent roof, not a temporary roof structure:
A "roof" is a permanent structure, according to its commonly understood meaning, and is not an ambiguous term. A temporary structure consisting of wooden framing and a plastic tarp would not be considered a "roof" by any reasonable person. The policy language anticipates coverage of a completed, permanent roof, not one in the process of repair and temporarily covered awaiting completion of the repairs."
409 F Supp 2d at 1236.
In reaching its decision, the court was persuaded by case law from California, Mississippi, and Florida, all of which upheld a similar exclusion. See, Diep v. California Fair Plan Assn'n, 19 Cal Rptr 2d 591 (Cal Ct App 1993); Camden Fire Ins. Ass'n v. New Buena Vista Hotel Co., 24 So 2d 848 (Miss 1946); New Hampshire Ins. Co. v. Carter, 359 So 2d 52 (Fla Dist Ct App 1978).
Farmers also sought summary judgment based on the policy's Faulty Workmanship exclusion, since the insureds had also sued, and reached a settlement with, the roofing contractor who had installed the temporary roof structure on the building. Because the court disposed of the case on the basis of the roof limitation, the court did not reach the faulty workmanship issue. Farmers Insurance Exchange was represented by Francis J. Maloney III and Nicholas L. Dazer of Bullivant Houser Bailey's Portland office.