Whether an exclusion for earth movement applied where a rockfall was caused both naturally and by man-made events?
Respondents, Dimitri Chaber and his wife, Mary, owned a building in Charleston located near a hillside. The hillside was excavated before Respondents purchased the building in 1981. Respondents’ building suffered significant damage in February, 2014 when rocks fell from the hillside. Respondents submitted a claim to petitioner, Erie, which provided coverage for the building. Petitioner denied the claim, citing language that excluded coverage for “landslides, including any earth sinking, rising, or shifting relating to such event.”
Petitioner itself retained an engineer to conduct an examination and render an opinion regarding causation. The engineer orally stated that improper excavation of the hillside was at least partly to blame for the rock fall. Respondents also retained an engineer who testified that the hillside was inappropriately excavated, leading to the rock fall.
In its opinion, the trial court concluded that a “naturally occurring rock fall is included within the common definition of landslide.” Murray v. State Farm Fire and Casualty Co., 203 W.Va. 477, 309 S.E.2d 1 (1998). Where, however, the exclusion contains terms that are not otherwise defined, and those terms relate to natural events, Murray says that the exclusion must be limited to “naturally occurring events rather than man-made events.” In this particular case, the trial court found “that the damages resulted from a man-made cause, i.e., negligent or improper excavation.” Accordingly, under Murray, it found that the exclusion was inapplicable. Therefore, the policy provided coverage for Respondents’ losses. Petitioner appeals.
Erie argues that its exclusion applies to all earth movement, whether caused naturally or by man-made events. Erie canvasses cases from other jurisdictions distinguishing Murray or rejecting it outright. Erie also argues that its policy contains what it describes as an “anti-concurrent causation clause.” Specifically, the policy states that a loss comes within the scope of the exclusion “regardless of any cause or event that contributes concurrently or any sequence to the loss.” Finally, Erie says that the doctrine of reasonable expectations does not apply because its policy language is unambiguous.
Respondents argue that the earth movement exclusion is ambiguous--a fact borne out by Erie’s own claim handling. As Respondents put it: “Why would Erie incur the costs and expenses [of] an expert to determine the cause of the soil movement if it had not relevance to coverage?” Furthermore, the anti-concurrent causation language cited by Erie is “nothing new” because it was already addressed in Murray. Finally, Respondents insist that the policy language was ambiguous. Therefore, it was proper for the trial court to apply the doctrine of reasonable expectations.
The Supreme Court has set this case for argument on its Rule 20 docket for April 19. We can, therefore, anticipate a new syllabus point. The case probably will not have a sweeping impact in the field of insurance law. However, it could certainly impact a wide number of West Virginia property owners, especially with so much increased coal, oil, and gas activity causing earth movement across all 55 counties.