Graham v. Public Employees Mutual Insurance Co.

656 P.2d 1077 (1983)

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Nature of the Case

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Facts

On May 18, 1980, Mount St. Helens erupted. The early pyroclastic flows from the eruption, along with hot ash and debris, began melting the snow and ice flanking the mountain and the broken glacial ice blocks within the Toutle River valley. This water, combined with torrential rains from the eruption cloud, existing groundwater, water displaced from Spirit Lake, and ash and debris, created mudflows that began moving down the valley shortly after the eruption began. This process continued throughout the day of May 18. A large mudflow developed and gouged and filled the land into new forms as it moved, damaging or destroying many homes within its path. Approximately 10 hours after the eruption began, Ps' homes, 20 to 25 miles away from Mount St. Helens, were destroyed by a mudflow or a combination of mudflows preceded by water damage from flooding. The homeowner's insurance policies issued by Pemco (D) to Ps, and a policy issued by Pennsylvania General Insurance Company (PGI (D)) were in effect. All three policies excluded losses resulting directly or indirectly from: 2. Earth Movement. Direct loss by fire, explosion, theft, or breakage of glass or safety glazing materials resulting from earth movement is covered. 3. Water damage, meaning: a. flood, . . . 'Earth movement' was not specifically defined in the PEMCO (D) policy. It had defined the term in a prior policy that stated: 2. caused by, resulting from, contributed to or aggravated by any earth movement, including but not limited to earthquake, volcanic eruption, landslide, mudflow, earth sinking, rising or shifting; unless loss by fire, explosion or breakage of glass constituting a part of the building(s) covered hereunder, including glass in storm doors and storm windows, ensues, and this Company shall then be liable only for such ensuing loss, but this exclusion does not apply to loss by theft. This language was deleted in the new policies. Ps filed claims against the insurance companies. Ds rejected their claims on the basis that the damage was excludable as 'earth movement' in the form of mudflows or a combination of earth movement and water damage. The trial court held that the causation analysis of Bruener v. Twin City Fire Ins. Co precluded Ps' claims. The courts involved granted summary judgment to Ds. Ps appealed.