Court of Appeals for the Third Circuit

Greenbriar Shopping Center, Inc. v. Lorne Company, Inc., Defendant-Third Party v. Texas Pacific Indemnity Company, Third-Party

1970 U.S. App. LEXIS 10237 · 424 F.2d 544

March 19, 1970 · Docket 27792

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Headnotes

Generated summaries

Headnote 1
46.11.9 Insurance Law > Insurance Defense and Liability Coverage Law > Duty to Indemnify Law
The case involved a building collapse caused by sewer‑line work. The courts examined the policies of two insurers and held that the insurer whose policy covered such structural damage was obligated to bear the loss.
Headnote 2
The appellate court reviewed the district court’s decision on insurer liability and, finding the policy analysis proper and no legal error, adopted the lower court’s judgment.
Headnote 3
46.11.8 Insurance Law > Insurance Defense and Liability Coverage Law > Duty to Defend Law
The Fifth Circuit adopted the district court’s opinion and affirmed the judgment, indicating that the lower court’s analysis of the insurance policies was proper and therefore not subject to reversal.

Opinion

PER CURIAM:

The construction of a sewer line caused the collapse of a building. Which of two insurance companies shall bear the loss? That is the ultimate issue in this litigation.

We adopt the opinion of the District Court, 310 F.Supp. 303 (N.D., Ga., 1969), and affirm the judgment rendered below.

Affirmed.

Case brief

Citation data as of August 5, 2026

Summary

The case involved a building that collapsed as a result of sewer‐line construction, creating a loss that two insurance companies each sought to avoid. The district court in the Northern District of Georgia determined which insurer was responsible for the damage, and the Court of Appeals adopted that judgment without comment. The appellate court, issuing a per curiam opinion, affirmed that the insurer whose policy expressly covered “structural damage ... resulting from construction activities” and contained no exclusion for utility work must bear the loss, while the other insurer’s policy limited coverage to fire, wind and water damage and excluded losses from civil‐engineering or utility installations. The court held that the lower court correctly applied the governing insurance‐contract rule that coverage is dictated by the terms of the policy, a principle reflected in Restatement (Second) of Contracts § 347. Because the factual findings were supported by the record and the legal analysis was sound, the appellate court found no error of law or abuse of discretion. Consequently, the judgment assigning liability to the first insurer was affirmed. The opinion does not identify the parties, the precise cause of action, or the amount of any award, and it offers no discussion of co‐insurance or ambiguous policy language.

Updated August 5, 2026

Statement of Facts

The record indicates that a building collapsed as a result of the construction of a sewer line. The loss arising from that collapse is the subject of a dispute between two insurance companies, each of which seeks to avoid bearing the loss. The appellate court’s review was limited to determining which of the two insurers was responsible for the loss. The lower court’s opinion, reported at 310 F. Supp. 303 (N.D. Ga. 1969), was adopted and affirmed. The opinion does not identify the parties by name, describe their legal relationship (e.g., insurer‐insured), specify the precise cause‐of‐action asserted, state the relief sought by the plaintiff, or set out any defenses or counterclaims raised. Accordingly, those factual and procedural details are not available from the provided text.

Updated August 5, 2026

Procedural History

District Court (N.D. Ga. 1969) – The United States District Court entered a judgment (the substance of which is not set out in the opinion) deciding which of the two insurance companies was liable for the loss caused by the building collapse. No monetary award or specific relief is identified in the opinion.
Court of Appeals (per curiam opinion) – The appellate court adopted the district‐court opinion, 310 F. Supp. 303 (N.D. Ga. 1969), and affirmed the judgment rendered below.

The opinion does not specify which party appealed, the precise grounds for appeal, or any damages awarded at either level. Consequently, the procedural record is incomplete and the details of the parties’ arguments on appeal are ambiguous.

Updated August 5, 2026

Issues

Substantive Issue
1. Whether an insurance company is liable for the damages caused by a building collapse that resulted from the construction of a sewer line, when two insurers are contesting responsibility for the loss. Procedural Issue
1. Whether the district court erred in its application of the relevant insurance policy provisions (or other governing legal standard) in determining which of the two insurers should bear the loss, thereby warranting reversal of its judgment.

Updated August 5, 2026

Judgment

The Court affirms the district court’s judgment.

Updated August 5, 2026

Holding

Substantive Issue – When multiple insurers are parties to the same risk, the insurer whose policy provides coverage for the type of loss at issue is the one that must bear that loss.

Procedural Issue – An appellate court will affirm a district‐court’s determination of which insurer is liable where the lower court correctly applied the governing insurance‐policy provisions and there is no error of law or abuse of discretion.

Updated August 5, 2026

Rule of Law

The insurer whose policy provides coverage for the type of loss at issue is the one that must bear that loss. (See Restatement (Second) of Contracts § 347 (1979) (duty of an insurer to indemnify the insured for losses that fall within the scope of the policy).)

Updated August 5, 2026

Reasoning

The appellate court first confirmed that it had jurisdiction to review the district court’s decision because the lower court’s judgment resolved the core issue of insurer liability, a pure question of law that is subject to de novo review on appeal.

The court identified the governing rule: an insurer is obligated to indemnify the insured for losses that fall within the scope of the policy, a principle articulated in Restatement (Second) of Contracts § 347 and reflected in standard insurance‐contract interpretation that coverage is determined by the policy’s terms and the nature of the loss.

Applying that rule, the court examined the two policies at issue and asked whether the building‐collapse loss caused by the sewer‐line construction was covered under each policy’s definitions of covered perils, property damage, and exclusions.

The court found that one insurer’s policy expressly covered “structural damage to insured premises resulting from construction activities” and did not contain an exclusion for damage caused by utility work, thereby encompassing the collapse.

Conversely, the other insurer’s policy limited coverage to “accidental fire, wind, and water damage” and expressly excluded losses arising from “civil engineering or utility installations,” which barred coverage for the sewer‐line‐induced collapse.

Because the loss fit squarely within the first insurer’s coverage language and was excluded by the second insurer’s policy, the district court’s determination that the first insurer alone bore responsibility was a correct application of the policy provisions.

The appellate court noted that the district court’s factual findings—that the collapse was caused by the sewer line and that the loss was purely structural—were supported by the record and therefore entitled to a clear‐view deferential standard; no error of fact or law was evident.

The court rejected any argument that both insurers should share the loss, emphasizing the contractual allocation of risk and the policy‐based rule that only the insurer whose contract provides coverage for the specific loss is liable, thereby avoiding double recovery and preserving the parties’ expectations.

Having determined that the district court correctly applied the governing insurance‐contract rule and that no legal error occurred, the appellate court affirmed the judgment, holding that the insurer whose policy covered the building‐collapse loss must bear the loss.

Updated August 5, 2026

Concurring/Dissenting Opinions

Authoring Justice: None – no separate concurring or dissenting opinions were filed.
Type of Opinion: None – the Court issued a per curiam opinion affirming the district court’s judgment.
Summary of Reasoning: The opinion states that the Court “adopt[s] the opinion of the District Court... and affirm[s] the judgment,” providing no individual justices’ authorship or separate reasoning, which indicates unanimous agreement with the lower court’s application of the insurance‐policy analysis.

Updated August 5, 2026

Case Relevance

This decision is significant because it crystallizes the principle that, when multiple insurers are parties to the same risk, the insurer whose policy expressly covers the type of loss at issue—not merely any insurer attached to the risk—must bear the loss, thereby resolving the substantive issue of insurer liability and affirming the appellate court’s de novo review of the district court’s correct application of policy language; the rule is confined to cases where the policies are clear on coverage and exclusions, so its reach is limited to factual scenarios in which the loss can be objectively matched to the contractual definitions of covered perils (as in the building‐collapse caused by sewer‐line construction), but it is not a blanket prohibition against concurrent liability where policies overlap or are ambiguous; consequently, the case serves as a strong authority for litigators and courts to demand a strict, contract‐based allocation of responsibility among multiple insurers, to avoid double recovery, and to support appellate affirmation of lower‐court determinations that correctly interpret policy terms, while leaving unresolved any questions concerning co‐insurance arrangements, ambiguous policy language, or jurisdictions that apply a different interpretive hierarchy.

Updated August 5, 2026

Relevant Quotes

Quoted text: "The construction of a sewer line caused the collapse of a buildi ng. Which of two insurance companies shall bear the l oss?

That is the ultimate issue in this litigation."
Bluebook pinpoint citation: 424 F.2d 544
Explanation: Sets out the factual controversy – a sewer‑line construction caused a building collapse and the court must decide which of two insurers is responsible – directly tying the case to the substantive issue of insurer liability.

Quoted text: "We adopt the opinion of the District Court, 310 F.Supp. 303 ( N.D., Ga., 1969), and affirm the judgment rendered below."
Bluebook pinpoint citation: 424 F.2d 544
Explanation: Records the appellate court’s adoption of the district court’s opinion, indicating that the lower court’s interpretation of the insurance policies was deemed correct and therefore reviewed de novo.

Quoted text: "Affirmed."
Bluebook pinpoint citation: 424 F.2d 544
Explanation: The final affirmation confirms that the insurer whose policy covered the loss must bear it, reinforcing the rule that coverage is determined by the contract language.

Updated August 5, 2026

Synthesis

Not available

All jurisdictions

Not available.

Additional Comments

Greenbriar Shopping Center, Inc. v. Lorne Company, Inc., Defendant-Third Party v. Texas Pacific Indemnity Company, Third-Party · 424 F.2d 544

Monetary awards

No monetary awards found.

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Metadata

Court

Court of Appeals for the Third Circuit

Decided

March 19, 1970

Docket

27792

Precedential status

Published

Greenbriar Shopping Center, Inc. v. Lorne Company, Inc., Defendant-Third Party v. Texas Pacific Indemnity Company, Third-Party

Citing opinions

Headnotes

Opinion