limited hidden water or steam seepage or leakage coverage

The insurers jointly investigated the cause of the damage. During the following year, Unity discovered foundation damage to the apartments and submitted claims to General Star and its other insurers, General Accident Insurance Company and Fireman's Fund Insurance Company of Ohio. General Star Indemnity Company issued a commercial property insurance policy to Unity that covered Meadowcrest effective on December 1, 1995. An inspection conducted on September 25, 1995, however, did not reveal any significant foundation problems in the buildings. At the time of Unity's purchase, the property was in poor overall condition. Built in 1970, the 178 units were located in 16 buildings. (Unity) bought an existing apartment complex in San Antonio, Texas in September 1995 and named it Meadowcrest Apartments. Third, “f loss or damage caused by or resulting from covered water ․ damage loss occurs,” the policy provides for an additional coverage extension to “pay the cost to tear out and replace any part of the building ․ to repair damage to the system or appliance from which the water ․ escapes.” But because there was no loss or damage caused by or resulting from covered water damage and because the underground pipes were not covered property, the insurer is not obliged to pay the cost to tear out and replace any part of the building or structure to repair damage to the underground pipes.

Thus, because the underground plumbing was not insured: (a) the policy's exclusion from coverage of loss or damage “caused by or resulting from ․ ust, corrosion ․ deterioration ․ in property that causes it to damage or destroy itself” is irrelevant and does not apply and (b) the exception to or “repeal” of that exclusion for “specified causes of loss” defined by the policy is also irrelevant and inapplicable. Second, the policy also explicitly provides that “overed property does not include ․ nderground pipes, flues or drains.” The seepage or leakage indisputably came from underground pipes and drains beneath the apartment foundations. First, the policy excludes coverage of “loss or damage caused by or resulting from ․ ontinuous or repeated seepage or leakage of water that occurs over a period of 14 days or more.” The damage to the apartment building foundations indisputably resulted from soil expansion caused by continuous or repeated seepage or leakage fitting that description. The district court's summary judgment held that the policy does not cover the losses. The plaintiff, owner of apartment buildings, sued the defendant, its insurer, under a commercial property insurance policy to recover for damage to the foundations of buildings resulting from seepage or leakage from underground pipes and drains and for the cost of accessing and repairing that underground plumbing. Beth Dunn Bradley (argued), Ellen Mary Van Meir, Thompson, Coe, Cousins & Irons, Dallas, TX, for General Star Indem. Stewart (argued), Horsley & Stewart, Dallas, TX, for Unity/Waterford-Fair Oaks, Ltd. Decided: April 10, 2002īefore GARWOOD, DeMOSS and DENNIS, Circuit Judges. General Star Indemnity Company, Cross Defendant-Appellee. UNITY/WATERFORD-FAIR OAKS, LTD., Defendant-Cross Claimant-Appellant, v. GENERAL ACCIDENT INSURANCE COMPANY, Plaintiff, v.

United States Court of Appeals,Fifth Circuit.

Limited hidden water or steam seepage or leakage coverage