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Simkins Industries v. Home Insurance Co.

December 11, 1985

SIMKINS INDUSTRIES
v.
HOME INSURANCE COMPANY OF INDIANA SIMKINS INDUSTRIES, INC. APPELLANT



Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 83-5259), District Judge: Honorable Donald W. VanArtsdalen

Author: Stapleton

BEFORE: ADAMS, GIBBONS and STAPLETON, Circuit Judge

MEMORANDUM OPINION OF THE COURT

STAPLETON, Circuit Judge :

In this appeal we must determine whether the district court erred in finding that an insurance policy did not provide coverage for the type of injury for which claimant seeks to recover under the policy. Because we agree with the district court that the policy was unambiguous and did not provide coverage, we affirm.

I.

Appellant, Simkins Industries, operates a paperboard factory in New Haven, Connecticut. Two large paper processing machines convert paper products into pulp and then into paperboard. The larger of the two machines is supplied electrical power by a steam turbine driven generator.

On December 29, 1982, the turbine suffered damage, causing it to be out of commission for repairs until January 17, 1983. This shutdown caused the manufacturing plant's capacity to be reduced by approximately 60% for that period. Upon inspection, the turbine's manufacturer found that erosion had caused a steam leak in the nozzle block of the steam casing, which had misdirected steam onto the rotor blades, causing them to break free from the rotor, and thereby damaging the turbine.

Appellee Home Insurance Company of Indiana ("Home") issued Simkins Industries an insurance policy covering the turbine which was in effect when the damage occurred. Simkins notified Home on January 7, 1983 of the damage, nine days after the turbine's malfunction. Home denied recovery for both the damage and repair costs of the turbine and for the loss of business revenue that occurred during the turbine's shutdown.

Simkins sued Home for the above items. Both parties moved for summary judgment. The district court found that the insurance policy unambiguously excluded coverage for both the type of damage the turbine suffered, and for the business losses due to such damage, and granted summary judgment for Home Simkins appeals.

II.

Appellant contends that the district court erred by finding that the insurance policy was not ambiguous with regard to its coverage of the type of damage sustained by the turbine and the consequent business losses, and by finding that the policy did not provide coverage for such injuries.

The standard of review regarding such contentions is well settled. "Determination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law. . . . Therefore, our review is plenary. . . . Similarly, whether an insurance policy is ambiguous is a legal question over which are review is ...


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