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Chalk one up for property owners in the battle
over coverage of
mold-related damage.
A federal judge in U.S. District Court in
Seattle ruled last month that the
property insurance policy for the Alderwood Plaza Shopping Center
in
Lynwood, Wash., covers damage caused by mold. According to court
documents,
the insurance company had contended, among other things, that the
policy
didn't cover the damage caused by the mold because the damage was
not
"fortuitous" -- or "caused by sudden discrete events." Instead, the
judge
defined "fortuitous" simply as "a loss which could not reasonably
be foreseen."
Scott Stickney, a partner at law firm Bullivant
Houser Bailey PC, who
represented the defendant, FM Global of Johnston, R.I., says the
parties
have settled the matter. The settlement terms are confidential.
Robert Zeavin, a partner at law firm Steefel
Levitt & Weiss, who represents
the owner of Alderwood Plaza, the Mission Viejo, Calif.-based
estate of
James Campbell, expects this ruling to affect not only future
cases
involving mold, but also other cases involving property insurance
coverage.
The judge's ruling "will have an important impact on any insurance
company
that says it covers only immediate catastrophic loss," says Mr.
Zeavin.
"Cases like these and claims by commercial
property owners are causing
underwriters to revise their contract language to exclude coverage
for
mold," Mr. Zeavin adds. "They're able to do that in a hard
insurance market
like we have now."
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