Court Opinion

ID: 3013906
Source: CourtListenerOpinion
Date Created: 2015-10-13 21:59:24.945808+00
Date Added: 2024-06-11T08:17:28.670060
License: Public Domain

Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

8-6-2004

Buczek v. Cont Cslty Ins Co
Precedential or Non-Precedential: Precedential

Docket No. 02-2847

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Recommended Citation
"Buczek v. Cont Cslty Ins Co" (2004). 2004 Decisions. Paper 377.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/377

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                      PRECEDENTIAL     GERARD J. JACKSON, ESQ. (Argued)
                                       1260 Marlkress Road
   UNITED STATES COURT OF              P.O. Box 1820
APPEALS FOR THE THIRD CIRCUIT          Cherry Hill, NJ 08034
                                             Counsel for Appellees

       Nos. 02-2847, 02-4063           SHEILA A. HAREN, ESQ. (Argued)
                                       MONICA E. O'NEILL, ESQ.
                                       Post & Schell, P.C.
 JACK BUCZEK; MARIE BUCZEK;            1600 John F. Kennedy Blvd, 13th Floor
 MICHAEL NEILL; SANDY NEILL,           Four Penn Center
     an Unincorporated Association     Philadelphia, PA 19103
  t/a MEADOWS CONDOMINIUM                    Counsel for Appellant
           ASSOCIATION;
    MEADOWS CONDOMINIUM
           ASSOCIATION                                OPINION

                 v.
                                       CHERTOFF, Circuit Judge.
   CONTINENTAL CASUALTY                       Appellees Jack and Marie Buczek
    INSURANCE COMPANY;                 and Michael and Sandy Neill are the sole
 TRANSPORTATION INSURANCE              and exclusive members of an
         COMPANY,                      unincorporated condominium association
                  Appellant            known as “Meadows Condominium
                                       Association” (“Owners”). The Owners
  On Appeal from the United States     commenced the underlying contract action
         District Court for the        against Transportation Insurance
        District of New Jersey         Company (“Transportation”) and
     (Dist. Ct. No. 00-cv-04274)       Continental Casualty Insurance Company
 District Judge: Honorable Joseph E.   (“Continental”)1 in the United States
                 Irenas                District Court for the District of New
                                       Jersey on August 31, 2000. The Owners
     Argued December 9, 2003           sued the two insurance companies
                                       following the denial of their condominium
  Before: AMBRO, FUENTES, and
    CHERTOFF, Circuit Judges.
                                             1
                                               Continental Insurance Company is
       (Filed: August 6, 2004)         not an appellant in this matter. The
                                       Owners have not appealed the District
                                       Court’s decision to dismiss all claims
                                       against Continental.
insurance claim, and they asserted claims          wooden pilings, which extended from
for breach of contract and breach of the           approximately three to four feet above
duty of good faith dealing. At the                 grade to approximately forty feet into the
conclusion of the proceedings, the District        ground. As the District Court established
Court entered a judgment in favor of the           and the record clearly reflects, the pilings
Owners and against Transportation in the           served as the foundation for the house.
amount of $103,634.00. Over a series of            About November 1, 1998, the Owners
amended orders, the District Court also            noticed that their structure was swaying in
granted costs and prejudgment interest to          high winds.        They investigated the
the Owners. For the reasons set out                problem in the Spring of 1999 and found
below, we will reverse the orders of the           visible discoloration on the surface level
District Court and vacate the judgment             of the pilings that supported the building.
entered in favor of the Owners.                    A general contractor, exterminator, and
                                                   engineer were retained to investigate the
                     I.                            situation further.
                                                           On April 5, 1999, the structure was
           The Buczeks, citizens of the            jacked up approximately one foot, and two
Commonwealth of Pennsylvania, and the              longitudinal steel beams were inserted
Neills, citizens of the State of New Jersey;       under the building for support. Local
purchased in 1986 a three-story, two-unit          code enforcement officials deemed the
s t r u c t u r e k n o w n a s M e a d o ws       temporary foundation to be unsatisfactory
Condominium located in Wildwood, New               and dangerous and required that the
Jersey. At the time of their condominium           building be secured and anchored to
purchase, the Owners obtained from                 another temporary or permanent
Transportation, an Illinois corporation, an        foundation.
all-risk policy of insurance (“the Policy”)                The Owners decided to replace the
to cover the Condominium Association.              rotted portions of the existing pilings with
“All-risks insurance is a special type of          concrete beams over the piles, building up
insurance extending to risks not usually           a foundation wall from the concrete beams
contemplated, and generally allows                 to the house. The Owners claim that the
recovery for all fortuitous losses, unless         replacement costs were approximately
the policy contains a specific exclusion           $103,634.00. On April 22, 1999, the
expressly excluding the loss from                  Owners submitted a Notice of Loss to
coverage.” Jane Massey Draper,                     Transportation. The Owners described the
Annotation, Coverage Under All-Risk                loss as follows: “supports [of] building
Insurance, 30 A.L.R. 5th 170 (2004).               rotted and wood boring beetles took over”
           Built on filled marshland, the          and that the loss occurred on or about
condominium building is located on an              November 1, 1998. App. 254a.
inlet and was supported by thirty-four                     On May 22, 1999, Irving

                                               2
Fruchtman, an engineer retained by the             appeals timely filed by Transportation
Owners, inspected the property and                 contesting the District Court’s March 1,
discovered that the pilings had rotted from        2002 judgment; the May 31, 2002
just below the water surface level to              amended judgment; the June 17, 2002
approximately one foot below grade.                order denying Appellant’s post-trial
Wood samples from the pilings were                 motions; and the October 16, 2002 order
analyzed, and it was determined that               awarding costs. This Court has appellate
wood-destroying fungi and anaerobic                jurisdiction pursuant to 28 U.S.C. § 1291.
bacteria were present in the pilings in                                II.
addition to brown rot or decay.
Transportation’s own investigation yielded                 Transportation appeals the District
similar findings. Transportation issued a          Court’s conclusion that the Owners were
written denial of the Owners’ claim on             entitled to coverage under the Policy and
October 6, 1999, noting, “[s]ince the              argues that this Court should rule that it is
pilings are the cause of the loss, and not         entitled to judgment as a matter of law. In
covered property under the policy, [the            the alternative, Transportation argues that
company] must respectfully deny any                it is entitled to a new trial because the
voluntary assistance or payment for this           District Court “remov[ed] numerous
loss.” App. 257a.                                  critical factual issues from the jury” and
         On August 31, 2000, the Owners            improperly took judicial notice of an issue
filed the underlying contract action in            of importance in this case. Appellant’s Br.
District Court. Following a three-day jury         at 9. Finally, Transportation claims that it
trial, the District Court decided the matter       is entitled to a remittitur because the
on motions pursuant to Rules 50(a)(1) and          District Court granted damages not
50(a)(2) of the Federal Rules of Civil             recoverable under the Policy.
Procedure. On March 1, 2002, the Court                     We exercise plenary review over
entered judgment against Transportation            the District Court’s decision to grant the
in the amount of $103,634.00. The Court            Owners’ motions for judgment as a matter
subsequently granted the Owners’ request           of law. Goodman v. Penn. Tpk. Comm’n,
for pre-judgment interest on the contract          293 F.3d 655, 664-65 (3d Cir. 2002). “In
obligation and amended the judgment to             reviewing the grant of a judgment as a
$117,197.49, reflecting interest in the            matter of law under Fed. R. Civ. P. 50
amount of $13,563.49. On June 17, 2002,            following a jury verdict, we must view the
the District Court entered an order                evidence in the light most favorable to the
denying Transportation’s post-trial                non-moving party, and determine whether
motions. On October 15, 2002, the                  the record contains the ‘minimum
District Court awarded costs of $1,778.71          quantum of evidence from which a jury
to the Owners.                                     might reasonably afford relief.’” Glenn
         This appeal consolidates four             Distribs. Corp. v. Carlisle Plastics, Inc.,

                                               3
297 F.3d 294, 299 (3d Cir. 2002) (quoting           enforce the policy as it is written.” Royal
Parkway Garage, Inc. v. City of                     Ins. Co. v. Rutgers Cas. Ins. Co., 638 A.2d
Philadelphia, 5 F.3d 685, 691 (3d Cir.              924, 927 (N.J. Super. Ct. App. Div. 1994)
1993)).                                             (quoting Flynn v. Hartford Fire Ins. Co.,
        The parties agree that New Jersey           370 A.2d 61, 63 (N.J. Super. Ct. App.
law applies to this case, as do we.                 Div. 1977)). However, in the absence of
Determination of the proper coverage of             any ambiguity, courts should not write for
an insurance contract is a question of law.         the insured a better policy of insurance
Atlantic Mut. Ins. Co. v. Palisades Safety          than the one purchased. Vassiliu v.
and Ins. Ass’n., 837 A.2d 1096, 1098                Daimler Chrysler Corp., 839 A.2d 863,
(N.J. Super. Ct. App. Div. 2003).2 An               867 (N.J. 2004). A genuine ambiguity
insurance policy should be interpreted              exists “where the phrasing of the policy is
according to its plain meaning. Benjamin            so confusing that the average policyholder
Moore & Co. v. Aetna Cas. & Sur. Co.,               cannot make out the boundaries of
843 A.2d 1094, 1103 (N.J. 2004) (internal           coverage.” Lee v. Gen. Accident Ins. Co.,
citations omitted). Where the express               767 A.2d 985, 987 (N.J. Super. Ct. App.
language of the policy is clear and                 Div. 2001). When the terms of coverage
unambiguous, “the court is bound to                 are ambiguous, “that doubt is ordinarily
                                                    resolved in favor of the insured.” Moore,
                                                    843 A.2d at 1103.
       2
         We review the District Court’s
interpretation of state law de novo. Wiley                              A.
v. State Farm Fire & Cas. Co., 995 F.2d
457, 459 (3d Cir. 1993). In adjudicating a                 The “Condominium Association
case under state law, we are not free to            Coverage Form” sets out the terms of
impose our own view of what state law               coverage for “Covered Property.” In
should be; rather, we are to apply existing         pertinent part, the Policy provides:
state law as interpreted by the state’s
highest court in an effort to predict how                  A.      COVERAGE
that court would decide the precise legal                  We will pay for direct
issues before us. Kowalsky v. Long                         physical loss of or damage
Beach Township, 72 F.3d 385, 388 (3d                       to Covered Property at the
Cir. 1995). In the absence of such                         premises described in the
guidance, we must look to decisions of                     Declarations caused by or
state intermediate appellate courts, of                    resulting from any Covered
federal courts interpreting that state's law,              Cause of Loss.
and of other state supreme courts that have
addressed the issue. Wiley, 995 F.2d at                    1.    Covered Property
459-60.                                                    Covered Property, as used

                                                4
in this Coverage Part, means                    wharves or docks;
the type of property                                       ***
described in this section                       3.    Covered Causes of Loss
A.1., and limited in A.2.,                      See applicable Causes of
Property Not Covered, if a                      Loss Form as shown in the
Limit of Insurance is shown                     Declarations.
in the Declarations for that
type of property.                         App. 201-03a.
                                                   The “Causes of Loss– Special
a. Building, meaning the                  Form” details the types of “Covered
building or structure                     C a u s e s o f L os s ” c o v er e d by
described in the                          Transportation. It provides:
Declarations, including:
(1) Completed additions;                        A.     C O V E R E D
(2) Fixtures, outside of individual                    CAUSES OF LOSS
units, including outdoor fixtures;              When Special is shown in
(3) Permanently installed:                      the Declarations, Covered
(a) Machinery and                               Causes of Loss means
(b) Equipment;                                  R I S KS O F D I R E CT
             ***                                PHYSICAL LOSS unless
2.      Property Not                            the loss is:
        Covered                                 1.     Excluded in Section B.,
Covered Property does not                              Exclusions; or
include:                                        2.     Limited in Section C.,
             ***                                       Limitations; that follow.
f. The cost of excavations,
grading, back filling or                        B.     EXCLUSIONS
filling;                                                    ***
g. Foundations of buildings,                    2.     We will not pay for
structures, machinery or                               loss or damage
boilers if their foundations                           caused by or
are below:                                             resulting from any of
        (1) The lowest                                 the following:
        basement floor; or                                  ***
        (2) The surface of                      d.
        the ground if there is                  (1) Wear and tear;
        no basement.                            (2) Rust, corrosion, fungus,
             ***                                decay, deterioration, hidden
j. Bulkheads, pilings, piers,                   or latent defect or any

                                      5
       quality in property that                                  Covered Property caused by
       causes it to damage or                                    collapse of a building or any
       destroy itself . . .                                      part of a building insured
                                                                 under this Coverage Form,
App. 216-17a.                                                    if the collapse is caused by
        In a decision issued from the bench                      one or more of the
following the conclusion of the Owners’                          following:
and Transportation’s cases, the District                               ***
Court established that the Owners’ claims                        b.      H i d d e n
would not be covered under the terms of                                  decay;
the General Insurance Policy. App. 780a.                         c.      Hidden insect
To the extent that the Owners argue                                      or vermi n
otherwise and claim that the pilings are                                 damage;
insured as “Covered Property,” we                                      ***
disagree. As the District Court’s opinion
and the record establish, the pilings served       App. 221a.
as the foundation for the building, and the               Since the pilings were damaged by
language of the Policy clearly excludes            hidden decay, the applicability of this
both foundations and “pilings” as                  clause turns on whether there was damage
“Covered Property.”                                to the Covered Property— i.e., the
        The District Court concluded               building— caused by “collapse.” The
nevertheless that coverage was warranted           word “collapse,” as used in insurance
under the Section D “Additional Coverage           policies, has been litigated for many years.
– Collapse” provision of the Policy (the           See Annotation, What Constitutes
“Collapse Clause”).          Transportation        “Collapse” of a Building Within Coverage
disputes this ruling.                              of Property Insurance Policy, 71 A.L.R.
        The Additional Coverage clause             3d 1072 (1976). As this Court discussed
reads:                                             in Ercolani v. Excelsior Insurance Co.,
                                                   830 F.2d 31 (3d Cir. 1987), courts have
       3.     A D D I T I O N A L                  not uniformly agreed on what constitutes
              C O V E R A G E          –           the collapse of a building under the
              COLLAPSE                             collapse coverage of a casualty insurance
       The term Covered Cause of Loss              policy. Id. at 34.
       includes the Additional Coverage -                 Some courts have adopted a
       Collapse as described and limited           “narrow” interpretation, requiring
       in D.1 through D.5 below.                   coverage only where a building has fallen
                                                   down or caved in. See id. However, as
       1.     We will pay for direct               the District Court noted, New Jersey
              physical loss or damage to           follows an alternative approach, i.e., the

                                               6
“majority rule.” Our opinion in Ercolani           imminent risk. The fact the event may or
predicted, “New Jersey courts would . . .          may not occur in any given point in time
read the collapse peril as covering serious        doesn’t mean the risk is not imminent.”
impairment of structural integrity making          Id. In short, the District Court concluded
the wall no longer capable of supporting           that the house’s vulnerability to ninety
the house’s superstructure.” Id. at 34.3 In        mile-per-hour winds, which may occur
Fantis Foods, Inc. v. North River                  once in twenty years, constituted
Insurance Co., 753 A.2d 176, 183 (N.J.             “imminent collapse.”
Super. Ct. App. Div. 2000), the New                       We disagree with the District
Jersey Appellate Division echoed our               Court’s definition of “imminent collapse.”
holding in Ercolani and decided that the           Certainly our decision in Ercolani made it
definition of collapse “must be taken to           clear that a house need not be in a pile of
cover any serious impairment of structural         rubble before it is deemed “collapsed.”
integrity that connotes imminent collapse          However, even if we assume that a ninety
threatening the preservation of the                mile-per-hour wind might occur once
building as a structure or the health and          every ten or twenty years, that is still not
safety of occupants and passers-by.”               an “imminent” risk.4
Fantis, 753 A.2d at 183 (emphasis added).
        After mulling the parameters of
                                                          4
what would be considered “imminent,” the                     We do note, however, that “[a]
District Judge made two pivotal findings.          judicially noticed fact must be one not
First, he accepted testimony that ninety           subject to reasonable dispute in that it is
mile-per-hour winds would cause the                either (1) generally known within the
building to collapse, and second, he took          territorial jurisdiction of the trial court or
judicial notice that ninety mile-per-hour          (2) capable of accurate and ready
winds sometimes hit the New Jersey shore.          determination by resort to sources whose
App. 767-68a.        The District Judge            accuracy cannot re as on ab ly b e
concluded, “I’m holding that even a risk           questioned.”       Fed. R. Evid. 201(b).
that might be a one in ten, or one in twenty       Indeed, on this appeal, the Owners’ own
year risk, is still a very serious and             evidence, an Army Corps of Engineers
                                                   survey, cited only two instances in the last
                                                   sixty-eight years where winds at Atlantic
       3
         At the time of our decision in            City reached ninety miles-per-hour. Other
Ercolani, the New Jersey courts had yet to         government data seems to suggest no
determine which interpretation of                  storms in the Jersey shore in the past
“collapse” would be the determinate rule,          century achieved winds of ninety miles-
leaving this Court to predict how the New          per-hour. National Climate Data Center,
Jersey Supreme Court would rule. 830               National Oceanic and Atmospheric
F.3d at 34.                                        Administratio n, 1899-1 996 U.S .

                                               7
        “Imminent” is defined as “ready to         “heard loud moaning and shrieking noises
take place: near at hand,” Webster’s Third         emanating from the south basement wall,
New International Dictionary 1130 (1st             noticed a crack in it, and observed it move
ed. 1966), and “likely to occur at any             and bulge inward.” 830 F.2d at 33.
moment: impending,” The Random House               Likewise, in Fantis Foods, the masonry
Dictionary of the English Language 957             consultant who inspected the damaged
(2d ed. 1987). As one court has observed,          property noted, “‘[t]he main cause of the
“imminent” means collapse “likely to               parapet walls [sic] displacement and
happen without delay.” See Ocean Winds             imminent collapse is hidden decay of steel
Council of Co-Owners v. Auto-Owner Ins.            beams and lintels which are located or
Co., 565 S.E.2d 306, 308 (S.C. 2002); see          behind the brick masonry walls’” and that
also Doheny West Homeowners Ass’n v.               the “‘[n]orth wall parapet has the
Am. Guarantee & Liab. Ins. Co., 70                 emergency condition.’” Fantis, 753 A.2d
Cal.Rptr.2d 260, 264 (Cal. App. 2                  at 180.
Dist.,1997) (“‘likely to happen without                    In short, the District Court’s
delay’” (quoting Webster's New World               interpretation of “imminent” wrenched it
Dictionary (3d college ed. 1991))).                from any reasonable definition of the
        The District Court’s findings on the       word.5
“imminent” threat to the structural
integrity of the condominium contrast with
                                                          5
the findings of imminence relied upon by                    We need not consider whether our
this Court in Ercolani and by the New              decision would be different if there was
Jersey Appellate Division in Fantis. Here,         evidence in the record that a common gust
the District Court noted, “[there was] no          of wind would knock the structure down.
observable damage [to the house]. . . .            The Owners chose to offer evidence only
[D]rywall wasn’t flying apart. Flashing            as to the effect of ninety mile-per-hour
wasn’t coming apart. The walls weren’t             winds on the house. The District Court
bulging or cracking which sometimes                tried in vain to probe whether the house
happen when a house becomes out of                 was threatened with collapse by less
whack, did not exist.” App. 765a.                  powerful winds. App. 304-05a. But as
However, in Ercolani, the policyholder             Judge Irenas explained, “[Fructman]
                                                   didn’t say . . . it would collapse on its
                                                   own. I tried to get him to say that. I
Landfalling Major Hurricanes– GIF Maps,            asked, would a lesser [sic] wind, [e.g.,] a
available at                                       forty [or] thirty [mile-per-hour wind], . . .
http://lwf.ncdc.noaa.gov/img/climate/sev           [would] make the thing fall. His answer
ereweather/2hur9996.gif (last visited July         was, I only did calculations for ninety
8, 2004). This kind of disputed fact is not        miles-an-hour. Nothing [Transportation’s
one that is appropriate for judicial notice.       expert] Honig[] said [was] anything

                                               8
                    B.                            By way of analogy, they point to the so-
                                                  called “Sue and Labor” insurance clauses,
      The Owners also argue that                  which oblige insurance companies to
Transportation was responsible for the            reimburse expenses to insured parties who
renovation costs because the Owners were          spend money to avert harm to covered
obliged to renovate under their duty to           property and to mitigate damages.
minimize losses and mitigate damages. 6                  Two provisions in the Policy
                                                  appear to resemble traditional “Sue and
                                                  Labor” provisions found in other “all-risk”
different.” App. 786a. Having chosen to           insurance policies: the “Preservation of
try the case on the theory that the house         Property” and “Duties in the Event of Loss
was vulnerable to the rare threat of a            or Damage” provisions.
ninety mile-per-hour wind, the Owners are                The Preservation clause provides:
bound to accept the consequence of our
determination that such a threat is not                  b. Preservation of Property
imminent and cannot serve to support a                   If it is necessary for you to
finding of “collapse.”                                   move Covered Property
       6
          The Owners also cite Harr v.
Allstate Insurance Co., 255 A.2d 208 (N.J.               exclusions therefrom, to an
1969), for the propo sition that                         insured before or at the
Transportation should be estopped from                   inception of the contract,
denying coverage because the Owners                      and the insured reasonably
relied on the language of the “Duties”                   relies thereupon to his
clause articulated in the Policy and copied              ultimate detriment, the
in a letter sent by the Company that was                 insurer is estopped to deny
dated April 30, 1999. The Owners’                        coverage after a loss on a
reliance on Harr is misplaced. In that                   risk or from a peril actually
case, the New Jersey Supreme Court                       not covered by the terms of
provided that equitable estoppel was                     the policy.
available in “appropriate circumstances.”
Id. at 219.                                       Id. That case is clearly distinguishable
                                                  from the matter at hand. The District
       These decisions all proceed                Court found no evidence o f
       on the thesis that where an                misrepresentation regarding the coverage
       insurer or its agent                       of insurance policy, as evidenced by its
       misrepresents, even though                 rejection of the bad faith claim against
       innocently, the coverage of                Transportation. See App. 798-99a.
       an insurance contract, or the

                                              9
       from the described premises                        The Owners also refer to the
       to preserve it from loss or                  language of the “Duties in the Event of
       damage by a Covered Cause                    Loss or Damage” Clause in the Policy.
       of Loss, we will pay for any                 This Clause provides:
       direct physical loss or
       damage to that property:                            3.     Duties in the Event
       (1)    While it is being                                   of Loss or Damage
              moved or while                                      a. You must see that
              temporarily stored at                               the following are
              another location; and                               done in the event of
       (2)    Only if the loss or                                 loss or damage to
              damage o ccurs                                      Covered Property:
              within 30 days after                                     ***
              the property is first                               (4)   Take all reasonable
              moved.                                                    steps to protect the
                                                                        Covered Property
App. 204a (emphasis added).                                             from further damage.
        The District Court indicated that it                            . . . However, we will
relied on the Preservation of Property                                  not pay for any
Clause in concluding that the Owners                                    subsequent loss or
were entitled to coverage. The Court                                    damage resulting
explained, “I think that there is [sic]                                 from a cause of loss
mutual obligations, obligations on the part                             that is not a Covered
of the insured to do that, preserve the                                 Cause of Loss.
property and obligations for them to pay
for it. The insured did it.” App. 793a.             App. 208a (emphasis added).
        The Preservation Clause provides                   Once again, the language clearly
coverage only in instances where a                  provides that loss or damage resulting
“Covered Cause of Loss” is implicated.              from a cause of loss that is not a “Covered
But absent a finding of “collapse” under            Cause of Loss” is excluded from
the Collapse Clause, the Owners do not              coverage. Id. As we articulated in our
have a “Covered Cause of Loss.”7                    discussion of the Preservation Clause, the
                                                    Owners have not established a “Covered
                                                    Cause of Loss” that would warrant
       7
         Absent a “Covered Cause of                 coverage under the Policy.
Loss,” we find no need to delve into the                   The Owners finally cite Broadwell
issues of what constitutes something
“being moved” to another location or what
items constitute “Covered Property” under           the Policy.

                                               10
Realty Services, Inc. v. Fidelity and               a covered cause of loss. As we observed
Casualty Company of New York, 528                   in GTE Corp. v. Allendale Mut. Ins. Co.,
A.2d 76 (N.J. Super. Ct. App. Div. 1987),           addressing “Sue and Labor” clauses, “an
for the proposition that an insured has a           alternative interpretation would permit [an
common law duty to prevent harm to the              insured party] to recover for
property and that an insurer has a                  improvements and measures taken to
corresponding obligation to reimburse the           address a host of uninsured risks.” 372
insured for out-of-pocket expenditures for          F.3d 598, 618 (3d Cir. 2004).
these efforts. This case, however, is                      Accordingly, we will vacate the
clearly distinguishable.                            judgment (as amended) of the District
        First, the policy at issue in               Court, vacate the awards of prejudgment
Broadwell was a general liability policy,           interest and costs, and remand for
not an “all-risk” policy purchased by the           judgment to be entered in favor of
Owners. “General liability policies are not         Transportation Insurance Company.
‘all-risk’ policies . . . . They provide an
insured with indemnification for damages
up to policy limits for which the insured
becomes liable as a result of tort liability
to a third party.” Standard Const. Co., Inc.
v. Maryland Cas. Co., 359 F.3d 846, 852-
53 (6th Cir. 2004) (internal citations
omitted); see also Lenning v. Commercial
Union Ins. Co., 260 F.3d 574, 584 (6th
Cir. 2001) (emphasis omitted). The issue
in Broadwell was whether the insurer had
to reimburse the insured for steps taken to
prevent damages to a third party which
were covered under the policy.
Significantly, the Broadwell court denied
coverage for the preventive measures
taken by the insured because the liability
policy excluded the insured’s property
from coverage. 528 A.2d at 528.
        Simply put, the insurer’s obligation
to reimburse for acts taken to preserve or
protect Covered Property does not extend
to require reimbursement for prevention of
damage to property that is excluded from
coverage or for a circumstance that is not

                                               11