Please ensure Javascript is enabled for purposes of website accessibility
Home / Opinion Digests / Insurance – Policy Coverage – Fire – Carpenter’s Van – ‘Use’

Insurance – Policy Coverage – Fire – Carpenter’s Van – ‘Use’

A carpenter hired to do trim work on a home under construction was “using” his box van when he left it parked on the property, and a Newport News U.S. District Court says he has coverage under his State Farm business auto policy for damage to the home from a fire that originated in the box van.

The first report, by Herbert Austin of the Gloucester Volunteer Fire & Rescue, concludes the fire originated in the rear of the van and the material first ignited “is most probably the wiring insulation and light combustible materials in the rear of the van.” The second report, prepared at the behest of State Farm, concludes the fire originated in the rear of the cargo area, and although he rules out the van as the cause of the fire, he nevertheless states that the actual cause remains undetermined. The third report, requested by Farm Bureau, concludes the fire started in the rear of the van, was electrical in origin and was caused by the failure of an extension cord running from a power source to an electrical splitter within the van, or by the failure of a DeWalt battery charger that was plugged into the splitter.

Farm Bureau has paid the cost of the fire damage – $292,850 – pursuant to a homeowner’s insurance policy of the owner of the home under construction at the time of the fire. Farm Bureau claims subrogation rights against van owner John Robins, contending the fire and resulting damages were the proximate result of Robins’ negligence.

At the time of the fire, Robins was named insured on a CGL policy issued by Nationwide; he promptly notified Nationwide and it denied liability coverage on Aug. 29, 2008, citing an exclusion cause in the policy. Robins also was the named insured under a Business Auto policy issued by State Farm, which notified Robins on Aug. 19, 2008, that it was reserving its right to deny liability coverage.

Under State Farm’s policy the property damage – not the accident that caused the property damage – must result from the ownership, maintenance, or use of the box van, and under Nationwide policy the property damage is excluded from coverage if it arises out of Robins’ ownership or use of the van. The three reports agree that the fire originated in the back of the van. None of the reports concludes the van itself caused the fire. The van had been parked on the homeowner’s property for about one month before the fire and was parked and locked at the time of the fire.

Few cases throughout the U.S., and none in Virginia, address whether an accident resulted from the ownership of a vehicle. Even though Robins owned the van and the van was the fuel that allowed the fire to grow large enough to spread to the home, the court must still determine whether there is a causal relationship between the accident and employment of the van as a vehicle before it can determine whether there is coverage under the State Farm or Nationwide policies.

Here, the insured vehicle was a box van, specifically built with a cargo space intended to hold cargo.

State Farm was on notice, from the moment it agreed to insure the vehicle, that the van would be used to hold foreign objects within its cargo space. The only aspect of Robins’ use of the van that may have departed from use of a box van as a vehicle was his practice of leaving the van on site through the duration of his involvement with a particular project. However, the length of the time the van was parked on the property had nothing to do with the accident here; rather, the accident resulted from Robins’ use of the van to store his tools and materials, and because the van was parked close enough to the house to allow a fire in the van to spread to the house.

In sum, the van was being used as a vehicle when something in the box van’s storage space sparked a fire that subsequently spread from the van to the house. The court finds there was a causal relationship between Robins’ employment of the box van as a vehicle and the property damage to the home, the property damage resulted from ownership or use of the van such that the vehicle was insured under the State Farm policy, as Nationwide claims, and such that the property damage is excluded from coverage under the Nationwide policy.

The court also finds the damage to the home is not excluded from coverage under the j(5) exclusion to the Nationwide policy. The only relationship between the fire and Robins’ operations is that the fire occurred inside the box van that Robins was using to store his equipment. The fire did not arise out of anything that Robins had done in furtherance of the trim work he had been hired to do, nor did it occur while he was doing that work or while that work was progressing in his absence. Even if Robins’ operations were ongoing at the time of the fire, Nationwide has not established that the fire arose out of Robins’ operations, as required for the j(5) exclusion to apply.

The damage to the home resulted from the ownership or use of Robins’ box van, such that the vehicle was insured under the State Farm policy, the court grants Nationwide motion for summary judgment to the extent it asks the court to find the property damage arose out of the ownership or use of the van, and denies the remainder of Nationwide’s motion based on the exclusion; the court denies State Farm summary judgment.

State Farm Mut. Auto. Ins. Co. v. Robins
(Morgan, J.) No. 4:09cv47, Jan. 29, 2010; USDC at Newport News, Va. VLW 010-3-046, 19 pp.

Leave a Reply