Opinion ID: 1378112
Heading Depth: 2
Heading Rank: 4

Heading: Fungus exclusion

Text: In its opinion, the district court also noted CIC's argument that a fungus exclusion in the policies precludes coverage. The court then stated that it was unnecessary to address this argument given its conclusion about the scope of the insuring clause, but stated that it was of the opinion that such a fungus exclusion would exclude coverage in the instant case. Beazer argues that the court erred in considering the alleged exclusion because Beazer disputed that the Policies actually contained the fungus exclusion. On appeal, CIC has not contested Beazer's argument on this point. Because of the factual dispute, the district court should have accepted Beazer's allegation as true and analyzed the Policies as if they did not contain the exclusion. See Rawe v. Liberty Mut. Fire Ins. Co., 462 F.3d 521, 526 (6th Cir.2006) (For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true. (citation omitted)). This error on the part of the district court was harmless, however, for two reasons. First, the reference to the alleged exclusion was dicta because the court did not rely on the exclusion in denying coverage. Second, as discussed above, Indiana courts would deny coverage in the instant case based on their interpretation of the terms property damage and occurrence regardless of any fungus exclusion.