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Rutgens Distrib. v. U.s. Fidelity & Guaranty

OPINION FILED MARCH 27, 1981.

RUTGENS DISTRIBUTORS, INC., PLAINTIFF-APPELLANT,

v.

UNITED STATES FIDELITY AND GUARANTY COMPANY, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of La Salle County; the Hon. THOMAS FLOOD, Judge, presiding. MR. JUSTICE BARRY DELIVERED THE OPINION OF THE COURT:

This is an appeal from an order of the circuit court of La Salle County directing a verdict in favor of the defendant insurer, United States Fidelity and Guaranty Company, in an action brought by the plaintiff insured, Rutgens Distributors, Inc., to recover the proceeds of an insurance policy. For the following reasons, we reverse and remand.

In December of 1978, the plaintiff purchased from the defendant insurer a fire, lightning, and extended coverage insurance policy. The building owned by the insured that was covered by the policy was a combined warehouse, office and garage located on Water Street in Peru, Illinois. Section VI of the policy, captioned "Perils Insured Against," provided in pertinent part:

"This policy insures against all direct loss caused by:

5. EXPLOSION, including direct loss resulting from the explosion of accumulated gases or unconsumed fuel within the firebox (or combustion chamber) of any fired vessel or within the flues or passages which conduct the gases of combustion therefrom.

A. This Company shall not be liable for loss by explosion of steam boilers, steam pipes, steam turbines or steam engines, if owned by, leased by or operated under the control of the Insured.

B. The following are not explosions within the intent or meaning of these provisions:

(1) Shock waves caused by aircraft, generally known as `sonic boom',

(2) Electric arcing,

(3) Rupture or bursting of rotating or moving parts of machinery caused by centrifugal force or mechanical breakdown,

(4) Water hammer,

(5) Rupture or bursting of water pipes,

(6) Rupture or bursting due to expansion or swelling of the contents of any building or structure, caused by or resulting from water,

(7) Rupture, bursting or operation of pressure relief devices."

On January 14, 1979, the plaintiff's warehouse was destroyed. Alleging that the building was destroyed by an internal explosion, the plaintiff sought to secure the benefits of the insurance policy. The insurer, however, refused to indemnify the plaintiff. Consequently, the plaintiff brought suit against the defendant in the circuit court of La Salle County seeking to recover the policy limit of $40,000. In its complaint, the plaintiff alleged that the building was destroyed by a peril that was insured against under the policy, i.e., an internal explosion. The insurer ...


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