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Erie Insurance Property and Casualty Co. v. Chaber

Supreme Court of West Virginia

June 1, 2017

ERIE INSURANCE PROPERTY and CASUALTY COMPANY, a corporation, and STEPHEN MYERS, Defendants Below, Petitioners
v.
DIMITRI CHABER and MARY CHABER, Plaintiffs Below, Respondents

          Submitted: April 19, 2017

         Appeal from the Circuit Court of Kanawha County Honorable James C. Stucky, Judge Civil Action No. 14-C-1088

          Amy M. Smith, Esq., Steptoe & Johnson PLLC, Bridgeport, West Virginia, Michelle Gaston, Esq., Katrina N. Bowers, Esq., Steptoe & Johnson PLLC Charleston, West Virginia Counsel for Petitioners.

          Clayton G. Anderson, Esq., The Masters Law Firm, LC, Charleston, West Virginia, Counsel for Respondents.

         SYLLABUS

         1. "A circuit court's entry of a declaratory judgment is reviewed de novo." Syl. Pt. 3, Cox v. Amick, 195 W.Va. 608, 466 S.E.2d 459 (1995).

         2. "In reviewing challenges to the findings and conclusions of the circuit court made after a bench trial, a two-pronged deferential standard of review is applied. The final order and the ultimate disposition are reviewed under an abuse of discretion standard, and the circuit court's underlying factual findings are reviewed under a clearly erroneous standard. Questions of law are subject to a de novo review." Syl. Pt. 1, Pub. Citizen, Inc. v. First Nat'l Bank, 198 W.Va. 329, 480 S.E.2d 538 (1996).

         3. "'"Whenever the language of an insurance policy provision is reasonably susceptible of two different meanings or is of such doubtful meaning that reasonable minds might be uncertain or disagree as to its meaning, it is ambiguous."' Syl. pt. 1, Surbaugh v. Stonewall Casualty Co., 171 W.Va. 390, 283 S.E.2d 859 (1981), quoting syl. pt. 1, Prete v. Merchants Property Insurance Co., 159 W.Va. 508, 223 S.E.2d 441 (1976)." Syl. Pt. 1, Shamblin v. Nationwide Mut. Ins. Co., 175 W.Va. 337, 332 S.E.2d 639 (1985).

         4. A provision in an insurance policy that excludes a loss regardless of whether such loss is "caused by an act of nature or is otherwise caused" is not ambiguous and excludes coverage for the loss whether it is caused by a man-made or a naturally-occurring event.

         5. An unambiguous ensuing or resulting loss clause of an exclusion contained in an insurance policy provides a narrow exception to the exclusion but does not revive or reinstate coverage for losses otherwise unambiguously excluded by the policy. Where an uncovered event occurs, an ensuing or resulting loss that is otherwise covered by the policy will remain covered, but the uncovered event itself is not covered.

          OPINION

          WORKMAN, JUSTICE.

         This is an appeal by Erie Insurance Property and Casualty Company and Stephen Myers (hereinafter jointly referenced as the "Petitioners" or separatelyas "Erie" and "Mr. Myers"). The Petitioners contend the circuit court erred by granting declaratory judgment in favor of Mr. and Mrs. Dimitri Chaber (hereinafter the "Respondents") on an insurance policy claim. Upon thorough evaluation of the arguments of the parties, the record designated for this Court's review, and applicable precedent, we reverse the circuit court's decision and remand this matter with instructions to enter declaratory judgment for the Petitioners on the declaratory judgment portion of the complaint.

         I. Factual and Procedural History

         The Respondents own property in St. Albans, West Virginia. One of five commercial rental units on that property was leased by the Respondents to a motorcycle shop. On February 19, 2014, soil and rock slid down a hill located to the rear of the Respondents' property and damaged the motorcycle shop. The Respondents subsequently submitted a claim for property damage to their insurance carrier, Erie. Mr. Myers, an adjuster for Erie, examined the damage and observed that a mass of rock and soil had fallen down the steep slope behind the Respondents' property. Mr. Myers met with Mr. Chaber and discussed the insurance policy's exclusion of coverage for damage caused by a landslide. The policy contains the following exclusionary language:

SECTION III - EXCLUSIONS
A. Coverages 1, 2, 3, 4, and 5
We do not cover under Building(s) - Coverage 1; Business Personal Property and Personal Property of Others - Coverage 2; Additional Income Protection - Coverage 3; Glass and Lettering - Coverage 4; and Signs, Lights, and Clocks -Coverage 5 "loss" or damage caused directly or indirectly by any of the following. Such "loss" or damage is excluded regardless of any cause or event that contributes concurrently or in any sequence to the "loss":
5. Earth Movement
a. Earthquake, including tremors and aftershocks, and any earth sinking, rising, or shifting related to such event;
b. Landslide, including any earth sinking, rising, or shifting related to such event;
c. Mine subsidence, meaning subsidence of a manmade mine. whether or not mining activity has ceased; or
d. Earth sinking (other than sinkhole collapse), rising, or shifting including soil conditions which cause settling, cracking or other disarrangement of foundations, or other parts of realty. Soil conditions include contraction, expansion, freezing, thawing, erosion, improperly compacted soil, and the action of water under the ground surface.
This exclusion applies regardless of whether any of the above, in Paragraphs 5.a. through 5.d., is caused by an act of nature or is otherwise caused.
But if Earth Movement, as described in 5.a. through 5.d. above, results in fire, explosion, sprinkler leakage, volcanic action, or building glass breakage, we will pay for the ...

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