Attempts to enforce exclusions within insurance policies have made my law practice prosper. I sometimes think of insurance coverage disputes regarding exclusions as being a recent occurrence. Nothing could be further from the truth. Fire Association of Philadelphia v. Evansville Brewing Association, 75 So. 196 (Fla. 1917), a case from nearly a hundred years ago, is a classic example that insurance policies may not cover what seemingly is a covered event.
The insurance company issued a fire insurance policy. However, the policy had an exclusion for loss caused by explosion. The insurance company position was the following:
1. That the building insured was substantially destroyed and fell as the result of an explosion, and not as the result of fire, and the said building was substantially destroyed and fell before the fire mentioned in the plaintiff’s declaration, whereby the said policy, by the terms thereof, immediately ceased to be in force, and was not in force at the time of the fire mentioned in the plaintiff’s declaration.
2. And for a further plea the defendant says that the building insured was totally destroyed as the result of an explosion, prior to the fire mentioned in the plaintiff’s declaration, and the loss of the said building was not due to or caused by the fire as alleged in the plaintiff’s declaration, but was due and caused by an explosion,
The Court noted the relevant policy language:
The insurance was ‘against all direct loss or damage by fire, except as hereinafter provided.’ The policies are expressly made subject to ‘stipulations and conditions printed on the back’ of the policies. One of the ‘stipulations’ ‘printed on the back’ of the policies is that the company ‘shall not be liable for loss caused directly or indirectly by invasion * * * or (unless fire ensues, and in that event, for the damage by fire only) by explosion of any kind.’ ‘If a building or any part thereof fall, except as the result of fire, all insurance by this policy on such building or its contents shall immediately cease.
As usual, facts make the difference:
A witness for the defendant from a window in a house perhaps a block away saw the effects of the explosion, saw the place when it went up in the air.’ She did not ‘know what was going on inside of the building before’ the explosion; she knew ‘there wasn’t any fire there that you could see from the outside. And if there was any fire there to amount to anything, you could see it through the blinds and the doors.’ It was about 3 a. m. ‘I was sitting looking out of the window, not looking at anything particularly, and I heard the noise and saw the building go up in the air, and afterwards immediately a dense smoke came up from there.’ A charge on the theory ‘that fire was observed at the same time with the explosion, and thereafter,’ was not without support in the evidence. There was testimony as to charred pieces of timber having been blown from the house through a window of another house by the explosion, and other circumstances from which the jury might have inferred that there was a fire in progress in the house before the explosion which fire caused the explosion, there being no positive evidence that there was in fact no fire in the building just prior to and at the time of the explosion.
I suppose that a house that literally blew up could be an explosion. Significantly, there was some evidence that the jury could find a fire pre-existed the explosion and therefore the burden of proof was on the defendant to prove that the exclusion applied. Burdens of proof can often be the determinative factor in winning or losing the case.
Here, the burden was squarely on the insurer with the Court applying longstanding principals:
The insured having alleged that the damage and loss were caused by fire, under such circumstances as to render the defendant liable, and the defendant having pleaded that the building was destroyed by an explosion which is included in the exceptions from liability, it was incumbent upon the plaintiff to show a loss by fire, which showing put upon the defendant the burden of proving the exception from liability averred in the plea. If the plea was not proven the plaintiff could recover upon showing a destruction of the building by fire. And the plaintiff could recover for the entire loss, even if the loss was facilitated by an explosion; provided the explosion was an incident to a pre-existing fire, and the plaintiff was not responsible for the fire in such a way as to bar recovery.
Sometimes, a little smoke before the explosive fire is a good thing.