131_C144

EXCAVATOR WAS A VEHICLE WITHIN POLICY’S MEANING

Commercial Property	Vehicle
Named Perils	Ambiguity

A city of Miami Beach contractor was operating an excavator on a property next to a hotel owned by Barcelona Hotel, LLC (Barcelona) in April 2002. The excavator struck and damaged the hotel building’s foundation. Nova Casualty Company (Nova) insured Barcelona under a named-peril building and personal property policy. The issue at hand was the following section titled “Causes of Loss–Basic Form:”

A. COVERED CAUSES OF LOSS

When Basic is shown in the Declarations, Covered Causes of Loss means the following:

…

6. Aircraft or Vehicles, meaning only physical contact of an aircraft, a spacecraft, a self-propelled missile, a vehicle, or an object thrown up by a vehicle with the described property or with the building or structure containing the described property. This cause of loss includes loss or damage by objects falling from aircraft.

Note: The policy did not define the term “vehicle.”

Barcelona submitted a property damage claim to Nova. Nova declined the claim, stating that “the policy provides basic named peril coverage [and that] [t]he loss, as submitted, did not satisfy the criteria for the applicable perils under the policy.” Barcelona sued Nova for its breach of the policy. Nova responded, asserting affirmative defenses and counterclaims for declarations that the loss was not within the policy definition of “covered causes of loss” and that the property damaged was not “covered property.”

Nova moved for summary judgment, arguing that coverage did not apply because the damage from the excavator that allegedly struck the building did not fall within the definition of a covered cause of loss. The trial court had each party submit memoranda of law that addressed whether the excavator was a vehicle under the policy. The trial court then granted summary judgment in favor of Nova based on its assessment that the Komatsu excavation machine was not a “vehicle” and not a named peril. It denied Barcelona’s motion for reconsideration, entered final summary judgment in Nova’s favor, and dismissed the amended complaint with prejudice.

Barcelona appealed. It argued that applying the dictionary definition of “vehicle” in conjunction with reading the entire policy demonstrated that the excavator was a “vehicle” and that the damage caused was from a named peril.

The District Court of Appeal of Florida, Third District determined that the plain and ordinary meaning of “vehicle” included “a means of carrying or transporting something: conveyance: … as a piece of mechanized equipment.” The excavator was mechanized equipment that could be a means of transporting or carrying the operator, the bucket, and the removed material. It also pointed out the use of the term “vehicle” in the definitions section of the policy with respect to the definition of “mobile equipment.” It concluded by stating that an excavator fell within the definition of “mobile equipment,” the policy used the term “vehicle” to describe it, and this provision supported the conclusion that the excavator was a “vehicle” under the policy. In addition, the policy did not have anything that indicated that a “vehicle” was excluded from coverage because it fell into the definition of “mobile equipment.”

The appellate court applied the plain meaning analysis to this policy provision under the facts of the case. It held that the trial court erred in concluding that the excavator was not a “vehicle” under the policy and, correspondingly, not a named peril. It reversed the trial court’s final summary judgment in favor of Nova and remanded the case for further proceedings consistent with this opinion.

District Court of Appeal of Florida, Third District. Barcelona Hotel, LLC, Appellant, v. Nova Casualty Company, etc. et al., Appellees. No 3D10–1934. March 2, 2011. 57 So.3d 228