Essex House v. St. Paul Fire & Marine Insurance Co.

• Decision Date: 13 May 1975
• Docket Number: No. 6488.,6488.
• Citation: 404 F. Supp. 978
• Court: U.S. District Court — Southern District of Ohio
• Parties: The ESSEX HOUSE and Louis Lerner, Plaintiffs, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, Defendant.

404 F. Supp. 978

The ESSEX HOUSE and Louis Lerner, Plaintiffs, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, Defendant.

No. 6488.

United States District Court, S. D. Ohio, W. D.

Findings of Fact and Conclusions of Law on Issue of Damages January 18, 1973.

May 13, 1975.

COPYRIGHT MATERIAL OMITTED

Douglas G. Cole, Goldman, Cole & Putnick, Cincinnati, Ohio, for plaintiffs.

James L. O'Connell, Lindhorst & Dreidame, Cincinnati, Ohio, for defendant.

DAVID S. PORTER, District Judge.

This is a diversity case (28 U.S.C. § 1332) in which plaintiffs seek a declaratory judgment under 28 U.S.C. § 2201, to determine their rights under an "ALL-RISK" insurance policy issued by defendant to them for the period from July 25, 1965 to July 25, 1968, by reason of an occurrence on July 4, 1966. On that day there was a brick failure on plaintiffs' seven-story apartment building known as "The Essex House." A considerable portion of the face brick on the insured building detached from the back-up block and either fell to the ground or was thereafter removed.

By prior order of this Court, this cause came on for hearing on February 18, 1972, on the following issues only:

(1) The cause or causes of the loss suffered by plaintiffs by the occurrence of July 4, 1966.

(2) Whether such cause or causes of loss were covered or excluded from coverage under the provisions of Policy No. 666 NB 3959.

(3) The sufficiency of the notice and proof of loss.

The parties presented their respective proof on the above issues by way of a joint stipulation; the introduction of exhibits, consisting of photographs, plans and specifications, and other documents pertaining to the construction of this building; local Climatological data from the United States Weather Bureau; the deposition of Alvin Lipson, the original architect; and the testimony of three expert witnesses. After consideration, the Court makes the following findings of fact and conclusions of law:

FINDINGS OF FACT

1. The Essex House is an Ohio partnership which has filed with the Clerk of the Common Pleas Court of Hamilton County a certificate of partnership stating in full the names and places of residence of the members of the partnership.

2. As of July 4, 1966, Louis Lerner and The Essex House, a partnership, owned the building known as "The Essex House," as tenants in common. The building was completed and partly occupied on or before January 1, 1965, so it was in its second summer when the accident occurred.

3. On July 4, 1966 there was in full force and effect a certain policy of insurance No. 666 NB 3959 issued by the defendant to the plaintiffs on July 25, 1965, for a three-year term expiring on July 25, 1968, covering the structure in question. For the purposes of the within action, the pertinent portions of the said insurance policy were those which provided as follows:

BUILDING(S) ALL RISK COVERAGE

Subject to the provisions herein and of this Policy, such insurance as is afforded under coverage C of Section II is extended to insure against all risks of direct physical loss or damage, except as excluded or limited herein.

EXCLUSIONS AND LIMITATIONS

1. This Company shall not be liable, under this rider, for loss caused by a peril which is otherwise insured against under Section II of this policy.

2. The "EXCLUSIONS" of Section II are applicable to this rider.

3. The following additional exclusions and limitations apply:

A. This rider does not insure against loss caused by:

(1) Wear and tear, deterioration, rust or corrosion, mould, wet or dry rot; inherent or latent defect; smog, smoke, vapor or gas from agricultural or industrial operations; mechanical breakdown, including rupture or bursting caused by centrifugal force; settling, cracking, shrinkage, bulging or expansion of pavements, foundations, walls, floors, roofs or ceilings, animals, birds, vermin, termites or insects; unless loss by a peril not excluded ensues and then this company shall be liable for only such ensuing loss.

* * * * *

`17. LOSS REPORTING AND ADJUSTMENTS (a) The Insured shall as soon as practicable report to this Company or its agent every loss or damage which may become a claim under this Policy and shall also file with the Company or its agent within ninety (90) days from the date of loss a detailed sworn proof of loss. Failure by the Insured to report the said loss or damage and to file such sworn proof of loss as hereinbefore provided shall invalidate any claim under this Policy for such loss.'

4. At or about 9:00 A.M. on July 4, 1966, an area of the brick facing detached from the building and fell to the parking lot below. Additional areas of such brick facing detached, wholly or partially, did not immediately fall, but were subsequently removed by or at the direction of plaintiffs. The plaintiffs discovered the aforesaid occurrence on July 4, 1966.

5. Subsequent to July 4, 1966, the following exchange of correspondence, all in in evidence, took place regarding the notice and proof of loss.

(A) A letter dated September 29, 1966, from counsel for the plaintiffs to the defendant with an attachment entitled "Sworn Statement in Proof of Loss".

(B) A letter dated September 29, 1966, from counsel for the plaintiffs to counsel for the defendant.

(C) A letter from counsel for the defendant to counsel for the plaintiffs dated October 17, 1966.

(D) A letter dated October 31, 1966, from counsel for the plaintiffs to counsel for the defendant.

(E) A letter under date of November 22, 1966, from counsel for the defendant to the plaintiffs, and a letter under date of November 25, 1966 from defendant to plaintiff.

(F) A letter entitled "Supplement to Proof of Loss" dated August 10, 1967, from the plaintiffs to the defendant.

(G) A letter from counsel for the defendant to the plaintiffs, dated August 18, 1967.

(H) First Notice of Claim of Loss dated July 5, 1966.

(I) Letter dated February 7, 1967, from W. A. Mossberg, Regional Superintendent of defendant, to Robert B. Barnett, of Isaacs and Bernstein.

6. A number of things need to be noted as to the conditions which existed in "The Essex House" on July 4, 1966. They are as follows:

(A) The concrete block backup walls were overstressed because of the manner in which window openings were located, a condition visible and apparent upon examination.

(B) There were no control joints in the masonry walls, a condition visible and apparent upon examination.

(C) Part of the exterior brick facing rested upon steel ledge angles, while the remainder rested upon concrete beams, a condition visible and apparent upon examination.

(D) In the course of the construction of the brick exterior wall, one alternative header course was installed on sixteen inch centers horizontally followed by five stretcher courses vertically, followed by another alternative header course, an unauthorized change from the bonding pattern called for in the plans. The plans provided for continuous headers every seventh course. This change resulted in the brick facing wall having only 30% of the headers called for under the plans, which caused the remaining headers to be greatly overstressed, a condition visible and apparent upon examination.

(E) The bolts supporting the ledge angles were changed from ¾th inch to 5/8 ths inch diameter. Certain bolts fastening the ledge angle to the concrete beam were installed by welding steel washers, shims or nuts to the ledge angles. Certain other shims were placed between the concrete beam and the ledge angle at distances up to six inches away from the bolt. Certain holes in the ledge angles were enlarged or recut to permit the bolts to be attached to the concrete beams. The spacing of the steel ledge angles to the concrete beams ranged from flush to ½ inch. All of such changes resulted in weakening the connection of this shelf angle to the concrete beam. Such condition was discoverable during construction.

(F) As to the condition of the masonry, in some instances there were voids between the backup wall and the face brick and in the joints of the backup block. In other instances block was laid up out of plumb, and in still others mortar was used to fill voids in the backup wall in lieu of concrete block; all of which contributed to the overstressing of the backup block wall. Such condition was discoverable during construction.

(G) The above structural conditions were in existence on and prior to July 25, 1965.

(H) The parties stipulated that if the partners of the plaintiff partnership and Louis Lerner, or their representatives and agents were called, they would testify that they had no knowledge of the existence of the foregoing structural conditions on or prior to July 25, 1965, or prior to July 4, 1966. If the representatives of the defendant were called, they would also testify that they had no knowledge of the existence of such structural conditions on or prior to July 25, 1965, or prior to July 4, 1966.

(I) The rates of expansion and contraction of the face brick outside wall and the concrete backup wall were not the same. On July 4, 1966, the temperatures of the two walls were not the same, the brick wall being outside and subject to thermal expansion because during each of the preceding fourteen days the outside temperature was in excess of 88 degrees, while the concrete backup wall was inside where air-conditioning (a part of the design of the building) chilled the interior temperature. Additionally, one of the natural structural properties of the backup concrete block is its capacity to creep or shrink as the result of age, both vertically and horizontally.

(J) The effect of these high outside temperatures on the outside brick wall would be its thermal expansion. The effect of a cooler temperature on the inside concrete backup wall, together with the creep property of such block, would be to cause it to remain either relatively stable, or to contract slightly.

(K) By reason of such extremes of temperature, an external cause, between the outer face

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