The opinion of the court was delivered by: Shadur, District Judge.
MEMORANDUM OPINION AND ORDER
Georgetown Associates ("Georgetown") sues Cherokee Insurance Co.
("Cherokee") and Nordstrom Agency of Illinois, Inc. ("Nordstrom"),
claiming Cherokee breached its contract of insurance by refusing to pay
for loss sustained when Georgetown's outdoor swimming pool unexpectedly
popped out of the ground. Georgetown and Cherokee have filed cross-motions
for summary judgment. Because there are material fact issues, both
motions are denied.
Georgetown is a real estate limited partnership. One of its
developments is Georgetown of Willow Bend ("Willow Bend"), an apartment
complex in Rolling Meadows, Illinois. Willow Bend's outdoor swimming pool
is adjacent to the living units, shaped like a trapezoid (60 feet long,
40 feet wide at the shallow end narrowing to 20 feet at the deep end) and
surrounded by a concrete deck.
Before April 30, 1980 substantial amounts of ground water had collected
around and beneath the pool,*fn1 creating hydrostatic pressures whose
force ultimately exceeded the weight of the pool. On April 80 the excess
force caused the pool to thrust upward more than 12 inches, shattering
the concrete deck, destroying the pool's plumbing connections and
substantially damaging the pool.
There is a dispute as to why the water pressure had been unrelieved
before the occurrence:
Georgetown presents the affidavits of experts Richard Hults and Lewis
Blue. Hults, president of a local construction company who has worked in
the industry for 11 years, inspected the pool shortly after the
accident. He concluded that the pool's "hydrostatic gravity valve failed
to release hydrostatic external ground water forces, which caused
pressure to build up around the pool, and which ultimately forced the pool
to rise above ground level." Blue, housing inspector for the City of
Rolling Meadows, came to the same conclusion based on substantially the
Cherokee counters with the affidavit of its own expert Ruben J. Baer, a
registered structural engineer. Baer too examined the swimming pool
shortly after the accident. He concluded that the "uplifting . . . was
caused by a loss of pool water through a crack or cracks in the pool wall
or floor and that said cracks were caused either by faulty operation or
maintenance of the pool and/or as a result of poor design of the pool
Baer's conclusion is thus directly at odds with that of Hults and
Blue. Both of them chalk up the accident to failure of a valve to relieve
pressure caused by unfavorable weather. Baer rather ascribes the accident
to negligence in operation, maintenance or design.
Sharp differences also exist as to the existence of insurance coverage
for the loss. Nordstrom had told Georgetown that the usual multi-peril
("all risks" in common parlance) policy did not cover swimming pools.
Georgetown ordered and paid an extra premium for extended coverage
including swimming pools and other structures apart from the residential
buildings (to a maximum limit of $25,000).
Unfortunately the policy as delivered to Georgetown, though it did
include the swimming pool rider (Endorsement E), omitted the very
coverage form (MP 101) to which it was a rider.*fn2 Had anyone studied
the package delivered to Georgetown in detail, the gap in documentation
would have been apparent, for:
(1) Among the eight "forms and endorsements" listed
on the cover sheet as "applying to Section I"
(property coverage) was "MP 101." That form was
missing while the other seven were in the package.
(2) Endorsement E itself was captioned "Special
Conditions and extensions to MP 101 MP 126." It
specified that its "conditions and Extensions apply
only when the aforementioned forms are attached to and
made a part of this Certificate." Its swimming pool
coverage was specified as an extension of "coverage
under MP 101."
But of course no one did study the package or discover the omission
until the loss was incurred and the claim was made and refused. This
action must determine both the effect of the omission and the effect of
MP 101 if it ...