Background
Mark Scafella sought coverage from Erie Insurance Company after a fire destroyed his barn and its contents. Erie denied coverage for fire damage to the structure under the policy’s business pursuits exclusion. The adjoining area known as the milk house housed Olivia’s, Scafella’s storefront and butcher business.
Scafella argued that the barn and milk house were separate structures, that the loss was not related to business activity, that Erie waived the exclusion, and that an exception to the exclusion applied. The Circuit Court of Marshall County concluded the barn and milk house were one structure and granted Erie and its adjuster, Stanley Geho, summary judgment on Scafella’s declaratory-judgment claim. The Intermediate Court of Appeals affirmed.
The Court’s Holding
The Supreme Court of Appeals of West Virginia summarily affirmed. Reviewing the summary-judgment ruling de novo, the court found no reversible error in the lower courts’ conclusions that the barn and milk house were one structure and that the unambiguous business pursuits exclusion barred coverage for structural fire damage.
The court also upheld the rulings that the exclusion’s exception did not restore coverage and that Erie had not waived its coverage defenses. The exception did not apply because the covered barn contents were personal property rather than business property.
Key Takeaways
- A business pursuits exclusion barred coverage for fire damage to a structure that included the insured’s business premises.
- The court upheld the determination that the barn and milk house constituted one structure.
- Coverage payments for personal property did not establish waiver or trigger the exclusion’s exception for the structure.
Why It Matters
The decision leaves intact summary judgment for the insurer where the insured could not establish a material factual dispute over the relevant structure or overcome an unambiguous business pursuits exclusion. It also underscores that payment for covered personal property does not necessarily waive a separate coverage defense for damage to real property.