Erie Ins. Exchange v. EPC MD 15 LLC (P)

A limited liability company was insured on a commercial-property policy issued by the appellant. The LLC sued for policy coverage for fire damage to a building owned by its subsidiary, which was not a named insured. The circuit court erred in holding that the LLC’s ability to control its subsidiary meant that, for insurance-coverage purposes, the LLC acquired all of the subsidiary’s property under a coverage-extension provision in the policy.

The policy’s declarations, the language in the coverage and coverage-extension provisions, and the language in the subrogation and exclusion provisions all undermine the reasonableness of the “ability to control” argument. The declarations imply that the “interest” of the named insured is its ownership interest in the premises covered by the policy. Others’ covered interests (in personal property only) are specifically described elsewhere, and applying the subrogation and intentional-loss exclusion provisions as the LLC proposes would lead to peculiar results.

Because the policy didn’t cover the subsidiary’s damaged property, the circuit could should have granted the insurer’s motion for summary judgment.

Reversed and final judgment.

Erie Ins. Exchange v. EPC MD 15 LLC (P), No. 180120, Jan. 17, 2019. SCV (Kelsey) from Winchester (Athey).

Categories: Opinions, Published, Supreme Court of Virginia

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