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GMT
Prevails in Costco v. Commonwealth Insurance Appeal
On August 21, 2001, a panel of the U.S. Court
of Appeals for the Ninth Circuit unanimously affirmed a judgment in
favor of GMT client Costco Wholesale Corporation. The case arose out
of property damage sustained to a Costco retail warehouse location
in New Rochelle, New York, when the soil underlying the building settled
excessively. The litigation against Costco's "all risk"
property insurers addressed the scope of coverage for "ensuing
loss" arising out of an excluded peril and the meaning of the
"sue and labor" term in standard-form property policies.
The Ninth Circuit affirmed the ruling of Judge Coughenour of the U.S.
District Court for the Western District of Washington, holding the
insurers liable for all costs associated with the investigation and
repair of the settlement and related damage to the warehouse. The
ruling obligates the insurers to pay in excess of $13 million in past
and future repair costs, prejudgment interest, and attorneys' fees.
GMT partners Chuck Gordon and Frank Cordell represented Costco.
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