At the meeting of the Professional Public Adjusters Association of New Jersey in the spring of 2021, I presented a course with engineer Bill Halkiadakis entitled “How to Choose and Use Engineering Experts in Real Estate Requirements.” The presentation included a case study of a claims case where the insured renovated their property to add an additional story and a tarpaulin was placed on the roof. While the tarpaulin was on the roof and before the additional floor was added, the tarpaulin exploded, causing extensive damage to both the building and the contents of the home. The carrier, Nationwide, applied coverage to the building part of the claim, but denied the content part.
While the building component of the insurance had “all risk” language, the content protection was called danger. The specific policy language is as follows:
COVERAGE C – PERSONAL PROPERTY
We cover unintentional direct physical loss of property described in Coverage C caused by the following hazards. . . .
2. Windstorm or hail.
Direct loss caused by rain, snow, sleet, sand or dust driven through roof or wall openings caused by direct impact of wind, hail or other insured risk covered.
During the presentation, I mentioned my expectation of a motion for a summary judgment by the carrier on this issue and discussed the results of Kunji Harrisburg, LLC v. Axis Surplus Insurance Company,1 a case argued by Anthony DiUlio, a fellow frequent speaker at PPAANJ.
Kunji is a question in the eastern district of Pennsylvania that contained the same question – is a tarp considered a roof? IN Kunji, Judge Beetlestone weighed competing interpretations of what is considered the “roof”. One of the experts quoted the definition from Dictionary of architecture and construction, which defines roofs as “the top cover of a building, including all materials and structures necessary to support it on the walls of the building; provides protection from rain, snow, sunlight, extreme temperatures and wind.” The insured’s interpretation of a roof included that the tarpaulin was the ultimate protection of the structure, and Judge Beetlestone found that this interpretation created a genuine question of material facts.
As expected, Nationwide filed a motion for summary judgment in the tarp issue. Nationwide relied on its brevity Valentino v. Harleysville Preferred Insurance Company,2 a Pennsylvania-level opinion in which the court looked at the common definitions of the terms “roof” and “tarpaulin” and found that a tarpaulin was not considered a roof. Nationwide also incorrectly stated that Valentino court was the only court in Pennsylvania that directly addressed this issue, overlooked or omitted Kunji decision. After submitting a brief opposition with reference to Kunji decision, the Western District of Pennsylvania found the following:
The term “ceiling” is not defined in the policy … In Kunji… The court stated: “whether a tarpaulin qualifies as a roof depends on the durability and relative durability of the coating”. . . .
The Court identified several factors set out in the case law: if “a reasonably prudent household would consider [the temporary covering]if left in that condition for a month or months, or longer, as sufficient against all risks of wind and rain that could reasonably be expected to occur … “and if the coverage was” sustainable enough to serve its main purposes: “to cover and protect a building against weather-related risks that can reasonably be foreseen”…
As in Kunji, here there are significant disputes about the “roof”‘s durability and relative performance and how well it was secured that prevents summary assessment. In November or early December 2017, [the contractor] removed the old roof from the house and removed the trusses. The house was covered with plywood and a tarpaulin and was secured four times by contractors. Seen in the light most favorable for [Plaintiffs], the second tarpaulin system (reinforced with wood and straps by the contractor) was in place for several months and was sufficient to protect the house from water and snow damage for the winter of 2017-2018 … Nationwide – which bears the burden of proof to determine its policy exclusion – did not present any opposite evidence of durability, relative durability or the components of a second tarpaulin system. Nationwide did not submit an expert opinion, which Kunji the proposed decision may be helpful. . . .
By law, there is insufficient evidence for the court to establish that the tarpaulin was not a “roof” or that Nationwide can deny coverage on that ground.
If anyone is interested in receiving panties and ordering in connection with the exercise, please email me at DBallard@MerlinLawGroup.com
1 Kunji Harrisburg, LLC v. Axis Surplus Ins. Co.No. 19-1213 (ED Penn. March 18, 2020).
2 Valentino v. Harleysville Preferred Ins. Co.2015 WL 7572410 (Pa. Super. February 3, 2015).