IA Fed / Coverage Owed When Trigger Dates Unclear

Pella entitled to defense reimbursement for property damage when evidence demonstrates the potential for coverage.

An Iowa federal court, applying Iowa law, entered summary judgment in favor of window maker regarding during which policy period defense costs coverage was triggered.  The court held that the policy period in which the windows were installed was triggered, because there was potential property damage upon installation, thereby triggering coverage.

Pella Corporation (“Pella”), a window maker, sued its insurer, Liberty Mutual Insurance Company (“Liberty Mutual”), for coverage relating to property damage allegedly caused from the installation of leaky windows.  Liberty Mutual issued annual policies to Pella beginning in 2000.  In prior summary judgment motions, the court held:  (1) the Liberty Mutual policies provided for pro rata allocation of indemnity payments where a single occurrence triggered multiple policies; and (2) the Liberty Mutual policies were ambiguous with respect to allocation of defense costs and thus interpreted the policies in Pella’s favor, applying an all-sums allocation.

Pella then moved for summary judgment on the issue of when fourteen sample claims first triggered the obligation to reimburse defense costs as to Liberty Mutual.  Pella argued that the duty to reimburse attaches from the point that property damage could potentially have begun, which Pella asserted equates to the time at which the underlying claimant installed or potentially could have installed the Pella windows at issue in the underlying actions.  In some instances, the sample complaints did not allege when the windows were installed.  Thus, Pella directed the court to various extrinsic evidence, including:   records demonstrating actual dates of installation; records showing construction completion dates; records evidencing dates of delivery; and, Liberty Mutual claims notes reflecting “dates of loss.”

Liberty Mutual argued that the fourteen sample complaints were silent as to when property damage actually began, resulting in a factual dispute between the parties about when damage began.

The court entered summary judgment in favor of Pella.  While the fourteen sample claims “generally contain little detail regarding the time period in which damage is alleged to have occurred…. many do contain allegations about when the allegedly defective Pella products were sold or installed.”  “These allegations, combined with the additional facts in the record regarding the sale, delivery, and installation of the windows, suffice to establish that the Sample Claims had been ‘arguably or potentially’ brought within the coverage of the particular policy periods highlighted by Pella.”

The court rejected Liberty Mutual’s argument that dates of installation do not shed light on when damages actually or potentially occurred:  “[F]acts such as when the products at issue were installed, or when the structure containing the products was completed, do shed light on when damage may potentially have occurred.”  Pella Corp. v. Liberty Mutual Ins. Co., 4:11-cv-00273 (S.D. Iowa Jan. 16, 2018).