When an apple warehouse was destroyed by explosion and fire, the insurer paid the United States of America the amount of its loss (the Farmers Home Administration being named mortgagee under the policy) less the value of apple grading and processing machines. Cross motions for summary judgment were filed by the United States and the insurer on the subject of whether or not the machines (valued at almost $50,000) were within the scope of the coverage applicable to the warehouse building. Building coverage under the policy provided that:

"Building(s) or structure(s) shall include attached additions and extensions, fixtures, machinery and equipment and equipment constituting a permanent part of and pertaining to the service of the building(s).

The United States argued that the apple grading and processing machines were "fixtures" since they were permanently and physically attached to the building. The insurer responded that the attachment of the machinery in question did not bring it within the coverage of the policy because it did not pertain to the service of the building.

The court found no disagreement among various cases in point that were cited. It found a distinction between attached fixtures that serve the building and those that are housed by the building for the specialized activities of the occupant. It concluded that the apple processing machinery was clearly of the second type. (Fixtures for heating, lighting and water service are examples of the first type.)

The motion of the United States of America was denied; that of the insurer was allowed. The machinery in question was found not within the coverage of the policy.

(AETNA CASUALTY & SURETY CO., Plaintiff v. HONEY BEAR BRAND, INC. ET AL., Defendants. US District Court, Western District of North Carolina, Asheville Division. Cir. No. A-C-87-25. April 6, 1989. 711 F. Supp. 849. CCH 1989 Fire and Casualty Cases, Paragraph 1989.)