Plaintiff Ariston is in the catering business, providing in-flight meal service to airlines. It owns and operates a large freezer warehouse facility constructed in 1979. In late 1982 and early 1983, the floor of the warehouse heaved and cracked, causing structural damage. This suit seeks recovery of its losses from two insurance carriers (Aetna Casualty and Surety Co., Inc. and American International Adjustment Co., Inc.) and others. Plaintiff has moved for partial summary judgment on the issue of coverage. This opinion concludes that coverage exists.
This policy insures against all risks of direct physical loss subject to the provisions and stipulations herein and in the policy of which this form is made a part.
American's policy provides:
This policy insures against all risks of direct physical loss or damage occurring during the period of this policy to the insured property from any insured and external cause, . . . except as hereinafter excluded.
Both policies contain exclusions upon which the carriers rely in arguing against the granting of the summary judgment motion. The exclusions are discussed below.
A. The Causes Contributing to the Loss.
Ariston's summary judgment motion relies upon an expert's report prepared for defendants. The report contains the following conclusions:
It is our professional opinion that the heaving of the foundation and floor, with subsequent cracking of the floor slab, is a direct result of expansion and rising of the soil mass as a result of frost heave. It is apparent that the insulation system in the floor has failed to prevent penetration of the cold into the subsoil, causing a buildup of ice lenses and layers. The formation of these ice lenses and layers with their inherently high uplift pressures have caused the footings, walls and floor slabs to rise and produced severe cracking in the concrete floor slab.
The report also discusses the causes of soil heaving and states:
The most probable cause of heaving here is due to frost heave. For frost heave to occur, three conditions must exist:
1. a frost susceptible soil
2. prolonged cold, i.e., temperature remaining at 32 degree F or less for at least 3 or 4 days
3. close proximity to the water table.
New Jersey soils typically are composed mainly of sands, silts and gravels in various combinations with some clays and occasionally highly organic soils such as peat found in the bogs of New Jersey. The worst soil combinations are uniform sands and silts and are classified as F-4 soils. They are the most susceptible to frost activity. These deposits are quite common in the Wrights-town area and a visual examination made of a sample obtained from beneath the floor slab (where heat tubes had been inserted in an attempt to thaw the ground) confirmed the subgrade as a silty sand, an F-4 classification. The source of cold far exceeds the threshold temperature of 32 degree F since the warehouse maintains temperatures consistently in the range of 0 degree F to -- 10 degree F. These temperatures have been maintained since the warehouse was constructed in 1979. The third condition, which is the most variable in this case, is the proximity of the foundation and floor slab to the water table. In New Jersey, the water table fluctuates seasonably with snow melt and rainfall and after heavy prolonged periods of precipitation, such as has occurred this spring, the water tables are nearer the surface.
The mechanism that triggers frost heave occurs as the prolonged cold penetrates (with time) deeper into the soil and closer to the water table. As the water in the soil starts to freeze, it exerts a force (crystallization force) that seeks to draw more water to the surface of the ice crystal. This produces tension in the water within the pores of the soil causing the water to rise above the water table (capillary action). The water attracted to the ice crystal freezes and forms a still larger ice crystal that eventually becomes an ice lens or layer. These lenses and layers continue to grow and cause massive heaves that exert tremendous pressures that can lift structures. These forces have been measured to be as high as 4 million pounds per square foot (or 2,000 tons per square foot) and in some parts of the United States, have caused heaves of 5 feet or more.
It is apparent that the conclusions of defendants' expert as to the causes of damage to the warehouse include design or
construction defects. Plaintiff does not disagree; its complaint against other defendants is based upon such claims.
The record upon which all parties to the summary judgment motion rely discloses the following as the causes contributing to plaintiff's loss:
(1) Design and/or construction defect
(2) Expansion and rising of the soil mass
(3) Proximity of water and the water table
(5) Persistence and penetration of cold leading to the formation of ice lenses
(6) Expansion of the ice lenses ...