United States District Court, D. Hawai''i
For Imperial Plaza, Association of Apartment Owners of, Plaintiff: Alan Van Etten, LEAD ATTORNEY, Deeley King Pang & Van Etten, A Limited Liability Law Partnership, Honolulu, HI; Aaron L. Loeser, Deeley King Pang & Van Etten, Honolulu, HI.
For Fireman's Fund Insurance Company, Defendant: Gregory K. Markham, Kevin S.W. Chee, Kyle Jack Takuro Kagihara, LEAD ATTORNEYS, Chee Markham & Feldman, Honolulu, HI; Keith K. Kato, LEAD ATTORNEY, Chee & Markham, Honolulu, HI.
Alan C. Kay, Senior United States District Judge.
ORDER GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT
This case arises from a dispute between an insurance company and the owners of a property as to whether an insurance agreement covers arsenic damage to the property. On December 11, 2011, the Association of Apartment Owners of Imperial Plaza (" Plaintiff" or " Imperial Plaza" ) filed a Complaint asking for declaratory relief that Fireman's Fund Insurance Company (" Defendant" or " FFIC" ) must pay benefits to Plaintiff under an insurance policy issued by FFIC.  ECF No. 1. On November 28, 2012, Plaintiff filed a Motion for Partial Summary Judgment (" MSJ" ) and a Concise Statement of Facts (" Plntf.'s CSF) asking for a judgment that the arsenic damage is covered by the insurance policy. ECF No. 23 & 24. Defendant filed an opposition on March 4, 2013 (" Def.'s Opp." ) along with a Concise Statement of Facts (" Def.'s CSF" ). ECF No. 52 & 53. Plaintiff filed a reply on March 11, 2013 (" Plntf.'s Reply" ). This Court held a hearing on March 25, 2013 regarding this matter.
Defendant issued an all-risks insurance policy to Plaintiff that covered the real property and building located at 725 Kapiolani Blvd., Honolulu, HI (" Building" ) from the time period of October 15, 2009 - October 15, 2010 (" Policy" ). Plntf.'s CSF Ex. 1 at 967. Defendant provided substantially similar coverage to Plaintiff from October 15, 2005 through October 15, 2012. Plntf.'s CSF Dec. of John Bouchie at 2 ¶ 6.
The Building was originally a three-story warehouse with a roof consisting of a cement topping slab. Plntf.'s CSF Ex. 2 at IP01151. A thick layer of insulation was placed on top of the cement roof slab (" Insulation Layer" ), with the roof being placed upon the Insulation layer. Id. The Insulation Layer consisted of a layer of cork, a layer of canec, and another layer of cork. Id. Canec is a building material unique to Hawai'i. Plntf.'s CSF Ex. 3 at IP 000370. It is a fiberboard made out of sugar cane bagasse and treated with inorganic arsenic compounds as an anti-termite agent. Id.
In the 1990's, a fourth floor was constructed on top of the existing third floor roof of the Building. Plntf.'s CSF Ex. 2 at IP 01151; Ex. 4 at IP01308. To build the
fourth floor, the builders poured a concrete slab upon the entire existing roof assembly of the Building before constructing the fourth floor on top of part of the new slab. Id. The builders ran plumbing lines through the third floor roof and Insulation Layer to service the fourth floor. Plntf.'s CSF Ex. 4 at IP01308.
On February 26, 2003, Miyasato Kuniyoshi Engineers LLC conducted tests of the fourth floor to discover the source of floor deflections. Plntf.'s CSF Ex. 2 at IP 01151, Def.'s CSF Ex. A, Attachment B at 1-3. The report found that moisture in the Insulation Layer was decomposing the canec. Id. The report ...