Graham v. Public Employees Mutual Insurance Co.
Washington Supreme Court
98 Wash. 2d 533, 656 P.2d 1077 (1983)
The Mt. St. Helens volcano erupted in May 1980. The resulting volcanic gases and hot ash melted nearby snow and ice, and the eruption cloud led to heavy rainfall. The meltwater and rain flowed into Spirit Lake, and the water displacement created mudflows. Ten hours after the eruption, a mudflow destroyed homes that were about 20 miles from the volcano. The homeowners, including Graham (plaintiff), had insurance contracts with Public Employees Mutual Insurance Co. (PEMCO) (defendant). The PEMCO insurance contract covered direct loss by fire and explosion. However, the contract excluded coverage of loss resulting directly or indirectly from earth movement. The contract did not define the term earth movement. A prior version of the contract had specifically excluded coverage from volcanic eruption and mudflow, but the specific exclusion was not in the version of the contract that PEMCO issued to Graham. Graham sought coverage under the insurance contract. PEMCO denied coverage and asserted that Graham’s loss was excluded by the earth-movement exclusion. Graham filed suit against PEMCO for coverage. The trial court granted summary judgment in favor of PEMCO, upon finding that the immediate physical cause of Graham’s loss was earth movement, and that the losses were therefore excluded from coverage under the contract.
Rule of Law
Holding and Reasoning (Dore, J.)
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