LLC v. Max Specialty Insurance Company et al. (2011)

MEMORANDUM OF DECISION

This litigation arises out of the collapse of an indoor air supported dome used as a sports facility owned by the plaintiff and located in Winsted, Connecticut in December 2007.   The facility was heavily damaged when it collapsed and the plaintiff has made claim against two insurance companies, Max Specialty Insurance Company (Max Specialty) and James River Insurance Company (James River), claiming that each company had issued an insurance policy which covered the damages incurred.   The complaint is in five counts but this litigation is limited to the breach of contract claims made against Max Specialty in the first count and as against James River in the fifth count.   The two claims are for losses sustained by the plaintiff as a result of the total collapse of the dome on December 22, 2007.

This case was tried before this court on August 2, 2011.   The witnesses were Peter Lawrence and Mark Prete, owners of the plaintiff, Kevin Ferrarotti and Michael Goulet, employees of the plaintiff, and Steve Boesen, an employee of Max Specialty.   The two defendants have filed briefs and reply briefs.

The parties have stipulated that the policy issued by James River was in effect from December 21, 2006 and expired at 12:01 a.m. on December 21, 2007, and that the Max Specialty policy was in effect from 12:01 a.m. on December 21, 2007 to December 21, 2008.   The plaintiff had continuous insurance coverage from the two defendants.   The court is being asked to determine which of the two insurance policies provides coverage for the losses incurred by the plaintiff on December 22, 2007, or whether both coverages apply.   The court is not being asked to determine damages.

The court finds the following facts and reaches the following conclusions.   The plaintiff is the owner of an indoor sports facility located on 147 Torrington Road, Winsted, Connecticut.   The facility (dome) is an air supported dome approximately 215 feet by 225 feet with a fully inflated center apex height of approximately sixty feet.   It contains approximately 50,000 square feet of synthetic turf playing surface and is used to play various indoor sports.   The property is also improved with a clubhouse building.   The roof of the dome consists of an outer membrane which is made of heavy polyester canvas and which forms the dome, and a thinner inner membrane that insulates the dome.   The dome is inflated by air pressure to maintain its shape.   If a door or other opening is left ajar the air will gradually leave the dome and it would slowly deflate.

On December 19, 2007 the dome was fully inflated and was in use.   On December 20 in mid-morning the dome was still inflated but was sagging in the center to a point that the center roof of the dome was less than six feet off the ground.   The cause of the sagging was a. combination of heavy snow on the roof coupled with a door that was open allowing the air to escape which lowered the air pressure.   When the door was closed the dome began to inflate.   A scoreboard had become entangled in some netting and the air pressure was reduced to lower the roof so the scoreboard could be removed.   The dome was then inflated and the roof of the dome was up to a height of 30 or 40 feet but still sagged in the middle from the weight of the snow.   The decision was made to fully deflate the dome so that the snow could be removed by the use of plastic shovels and by hand.   The roof of the dome was then lowered until it was flat on the ground.   There was a small tear about a foot long in the inner insulation membrane, which was repaired, but the outer membrane was not damaged.   Some of the snow was removed on the 21st by a crew of four men.

The next day was Saturday, December 22 and a crew of about eight people assembled at the site of the dome to remove the snow.   After working with plastic snow shovels and by hand for six or seven hours a substantial amount of the snow had been removed.   The dome was then re-inflated and it reached a point where it was up to thirty or forty feet and much closer to being fully inflated than it had been on Thursday, but there was still some snow that had slid back into the middle of the roof causing a smaller concavity.   It was now late in the day and a decision was made to lower the dome and to continue to remove the snow on the following day.

The air pressure was reduced and some doors opened to speed up the deflation.   The dome was still substantially up when there was a loud thud and a rush of air.   The entire roof canvas had split open from one end of the dome to the other and the dome had collapsed.

James River claims that the loss occurred on December 22, 2007 and that its insurance policy had expired prior to that date.

Max Specialty claims that the financial loss sustained by the plaintiff occurred on December 20, 2007 prior to the inception of its insurance policy at 12:01 a.m. on December 21, 2007.   Alternatively, it claims that the policy does not cover the loss under the doctrine of fortuity, known loss, and loss-in-progress.

Each insurance policy includes identical language under the section of the policy entitled Building and Personal Property Coverage Form.

D. Additional Coverage—Collapse.

The term Covered Cause of Loss includes the Additional Coverage—Collapse as described and limited in D.1 through D.5 below.

1. With respect to buildings:

a.  Collapse means an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its intended purposes.

b. A building or any part of a building that is in danger of falling down or caving in is not considered to be in a state of collapse;

c. A part of a building that is standing is not considered to be in a state of collapse even if it has separated from another part of the building;

d. A building that is standing or any part of a building that is standing is not considered to be in a state of collapse even if it shows evidence of cracking, bulging, sagging, bending, leaning, settling, shrinkage or expansion.

“An insurance policy is to be interpreted by the same general rules that govern the construction of any written contract and enforced in accordance with the real intent of the parties as expressed in the language employed in the policy.  Schultz v. Hartford Fire Ins. Co., 213 Conn. 696, 702, 569 A.2d 1131 (1990).   The policy words must be accorded their natural and ordinary meaning.  Kelly v. Figueiredo, 223 Conn. 31, 35, 610 A.2d 1296 (1992).   Under well established rules of construction, any ambiguity in the terms of an insurance policy must be construed in favor of the insured because the insurance company drafted the policy.  Streitweiser v. Middlesex Mutual Assurance Co., 219 Conn. 371, 375, 593 A.2d 498 (1991).   This rule of construction may be not applied, however, unless the policy terms are indeed ambiguous.  Kelly v. Figueiredo, supra, 37.   Moreover, the mere fact that the parties advance different interpretations of the language in question “does not necessitate a conclusion that the language is ambiguous.”  Id. Stephan v. Pennsylvania General Ins. Co., 224 Conn. 758.   The court finds that the pertinent part of the policies is not ambiguous.

The collapse of the dome occurred on December 22, 2007 which is after the James River policy had expired.   Collapse is defined in the policy as an abrupt falling down.  (Emphasis added.)   The fact that the building had sagged on December 20 does not establish that a collapse occurred on that date.   The policy provides and the court finds that a building in the state that the dome was in on December 20 is not in a state of collapse.   The sagging of the dome on December 20 was caused by a combination of snow on the dome and an open door which allowed the air to escape from the interior of the building.   When the door was closed the dome began to re-inflate.   The tears on the inner membrane, which were repaired, were not a cause of the sagging on December 20 or the collapse on the 22nd.   The evidence did not establish that there was any tear in the heavy polyester canvas which held the roof up until the time of the collapse on the 22nd.   There is no coverage for the December 22, 2007 loss in the James River policy.

Max Specialty claims that the loss sustained by the plaintiff occurred on December 20 and was prior to the inception of its policy on December 21.   The court disagrees with that claim for the reasons set forth above.

The alternative claim by Max Specialty as to why their policy does not cover the loss is premised on the doctrine of fortuity, known loss and loss-in-progress.

Max Specialty claims that insurance policies cover only those losses that are caused by “fortuitous” events, and that insurance is not available for losses that the policyholder knows of, planned, intended, or is aware are substantially certain to occur, a concept with which the court agrees.

The loss on December 22, 2007 was fortuitous.   The claim of Max Specialty is based on the allegation that the dome had sustained “multiple tears in its fabric.”   The evidence does not support that allegation.   The one-foot-long tear was in the inner insulation membrane and was repaired.   That tear did not contribute to the sagging on the 20th or the collapse two days later.

It is also claimed that the loss had already taken place when the small tear occurred on December 20 and that the owners of the dome knew about it.   Once again, there is no evidence that the small tear on December 20 had any role in the collapse, in fact the evidence is to the contrary.   The owners knew about it and repaired it.

The alternative claim by Max Specialty is that the loss was in progress before the inception of Max Specialty's policy and therefore that the loss was not fortuitous.   This is also based on a claim that the tear in the inner fabric had occurred on December 20 and was so immediate to the inception of the policy as to be a loss-in-progress and not fortuitous.   The one-foot tear did occur on December 20 but as has been stated several times, the tear was not established as being a factor in the collapse on December 22, 2007.

For all of the reasons set forth above, the court finds that the plaintiff has proven the allegations of the first count against Max Specialty and that the collapse of the dome on December 22, 2007 was covered by the Max Specialty insurance policy.

The court also finds that the plaintiff has failed to prove the allegations of the fifth count against James River, and that the collapse on December 22, 2007 was not covered by the James River insurance policy.

William L. Hadden, Jr.

Judge Trial Referee

Hadden, William L., J.T.R.