Earth Movement Exclusion Defeats Claim for Coverage for Damages Caused by Landslide

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JKT Associates, Inc. (“JKT”) appealed the district court’s summary judgment in favor of Atain Specialty Insurance Company (“Atain”) establlishing lack of coverage for defense or indemnity decision in the insurance coverage dispute. In Atain Specialty Insurance Company, a Michigan corporation v. JKT Associates, Inc., a California domestic stock corporation, and Elizabeth Christensen, an individual; Richard Meese, an individual; Lora Eichner Blanusa, M.D., an individual; Kristi Synek, an individual; Hidden Hills Owners’ Association, a California business entity, form unknown, No. 20-16366, United States Court of Appeals, Ninth Circuit (March 11, 2022) the Ninth Circuit reached a clear and obvious decision.

The Ninth Circuit, stating the obvious, concluded that because a landslide is an “earth movement,” the plain terms of this exclusion bar any coverage for any claim “arising, in whole or part,” from the landslide at the Hidden Hills properties or from any “settling” or “slipping” that preceded that landslide, and it does so regardless of the cause of the landslide.

Because all injuries “aris[e], in whole or part, out of . . . ‘earth movement, ‘” there is no possibility of coverage under the Atain policies.

Because there was no potential for coverage, Atain had no duty to defend and no duty to indemnify. The Ninth Circuit concluded district court correctly granted summary judgment.

ZALMA OPINION

Insurers have never liked dealing with landslides and earth movement claims because they are difficult to evaluate, damages are hard to quantify, and a landslide will remove the place where a structure sat. The exclusions written are clear and unambiguous and even the Ninth Circuit found it necessary to rule in favor of the insurer.

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