United States District Court, D. Connecticut
RULING DENYING CROSS-MOTIONS FOR SUMMARY JUDGMENT
Jeffrey Alker Meyer United States District Judge
Was it vandalism or was it theft? That is a $2 million question that gives rise to this case about whether damages inflicted by intruders inside a vacant building are subject to coverage under the terms of a commercial insurance policy.
One day in March 2013, the owner of an empty commercial building in East Hampton, Connecticut found an unwelcome surprise: intruders had broken into the building, extensively damaged the building’s interior and fixtures, and stolen copper pipe from inside the building. The building’s owner-plaintiff Mercedes Zee Corp., LLC-seeks payment for most of its losses under the terms of an insurance policy issued by defendant Seneca Insurance Company, Inc.
The insurance policy covers damages from “vandalism” but excludes damages from “theft.” This lawsuit has resulted because the parties have very differing interpretations of what these terms mean as used in the policy and how they should apply to the facts of this case. Indeed, the same policy provision is widely used in insurance policies nationwide, and courts across the country have frequently grappled with how to understand and apply the distinction between losses that should be covered as “vandalism” and losses that should be excluded as “theft.” See, e.g., Morley Witus, The Paradox of Insurance Coverage for Vandalism But Not Theft, 56 Wayne L. Rev. 1747 (2010).
The parties have now cross-moved for summary judgment. Because I believe that both parties have overlooked in some respects the guiding principles that should govern interpretation of the policy, I will deny both motions for summary judgment.
The parties have stipulated to certain facts for purposes of their cross-motions for summary judgment. Doc. #45 at 9-13. Plaintiff owns a commercial building in East Hampton, Connecticut that was vacant while it was undergoing renovation. Id. at 9. In March 2013, two men broke into the premises and intentionally damaged the building and stole copper piping. Id. at 11. Plaintiff claims damages to walls, ceilings, floors, electrical boxes, electric panels, electrical distribution, plumbing fixtures, an alarm system, heating units, and the heating and cooling systems. Id. at 11-12.
The insurance policy at issue in this case includes the following coverage clause that broadly includes losses due to vandalism but that is subject to exception for losses due to theft:
A. Covered Causes of Loss
* * * *
8. Vandalism, meaning willful and malicious damage to, or destruction of, the described property.
We will not pay for loss or damage caused by or resulting from theft, except for building damage caused by the breaking in or exiting of burglars.
Id. at 11.
Plaintiff does not claim that this so-called “vandalism/theft” clause of the insurance policy covers the value of the copper piping or any other items inside the building that were stolen by the intruders. Instead, plaintiff limits its claim to damages sustained to the interior of the building. It is not clear from the parties’ submissions whether or the extent to which any interior building damages occurred as a necessary part of any act of theft (e.g., whether any ...