Costco Wholesale Corp. v. Commonwealth Insurance

MEMORANDUM *

Commonwealth Health Insurance Company, Zurich Insurance Company and SR International Business Insurance Compa *647 ny (“the Insurers”) appeal the district court’s summary judgment against them in a diversity action brought by Costco Companies, Inc. (“Costco”), in which Costco sought coverage under property insurance policies for costs incurred in connection with damage to its new warehouse in New Rochelle, New York after the building’s foundation differentially settled.

The district court had jurisdiction under 28 U.S.C. § 1332 . We have jurisdiction under 28 U.S.C. § 1291 . This court reviews a district court’s grant of summary judgment de novo. Clicks Billiards Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1257 (9th Cir.2001).

We hold that the district court did not err by granting Costco summary judgement because the “ensuing loss” exception to the policy’s defective workmanship exclusion permits coverage for Costco’s losses associated with the differential settlement.

The basic facts have already been set forth by both parties in their briefs.

The Perils Insured were “all risks of direct physical loss or damage from any cause whatsoever,” except what was…