The Court of Appeals of Wisconsin has held that a limitation in First-Party Policies to "cover loss or damage commencing: (1) During the policy period shown in the Declarations" is a part of the Property Insurance Policies' Coverage Grant. 3303-05 Marina Road, LLC v. West Bend Mutual Insurance Co., Download 3303-05 Marina Road, LLC v. West Bend Mut. Ins. Co. (Wis. Ct. App. Case No. 2009AP1629, Opinion Filed September 8, 2010) PUBLIC ACCESS also published as 2010 WL 3489391 ¶¶15, 22 (Wis. Ct. App. September 8, 2010)(Westlaw subscription required to access Westlaw; page numbers not assigned at time of this publication).
"In other words, the parties agree that by the plain language of the Policies, the Policies only cover 'physical loss of or damage to Covered Property' beginning after the Property was added to the Policies by the October 23, 2003 endorsement." Id. ¶16.
The nature of the Policyholders' Claims against West Bend included both Coverage and Bad Faith. they filed suit against West Bend, "alleging that West Bend had breached its obligation to provide coverage for the damages to the Property under the terms of the Policies and did so in bad faith." Id. ¶8. After a month-long Bench Trial which included ten days of testimony, the Trial Court dismissed the Complaint. "The trial court's decision was based on its finding that damage to the Property pre-existed the policy period." Id. ¶ 9. For the above reasons, the Court of Appeals of Wisconsin affirmed.
Although West Bend attempted to raise the "known loss" doctrine on appeal, neither the Trial Court nor the Appellate Court rested their judgments on this ground. Moreover, as the Appellate Court noted, in the Trial Court, "West Bend did not assert the known loss doctrine as a defense." Id. ¶8. "In any event, our conclusion that the plain language of the Policies excludes coverage is dispositive, regardless of whether any comments from the trial court imply that it considered the known loss doctrine." Id. ¶22.
Dennis Wall is Co-Author of the leading book on Insurance Coverage for Catastrophe Claims, "CATClaims: Insurance Coverage for Natural and Man-Made Disasters" (West Publishing Company 2008; 2010 Supplement in process). Mr. Wall will be a featured speaker on several panels which will address the BP Oil Spill Catastrophe. On September 15, 2010, he will be a featured speaker on a panel addressing "BP Oil Spill Damages Claims: The Coverage Predicates" at the September 15, 2010 Seminar of the Insurance Law Committee sponsored by the Orange County Bar Association in Orlando, Florida. Mr. Wall will speak on a panel at the American Conference Institute's Bad Faith Litigation Conference in Orlando, Florida on November 30, 2010 on "Dealing With Catastrophic Disasters: How to Properly Investigate and Handle Overwhelming Claims". The American Conference Institute is offering a discount to readers of this Blog: Download ACI Advises Readers of the Insurance Claims and Issues and Insurance Claims and Bad Faith Law Blog are entitled to a discount.
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