Is a groundwater breach at a construction site considered an "insurance event"?
Dec 10, 2017
ג'ון גבע ושלומי הדר – עורכי דין ומגשרים בבית המשפט העליון נדון ערעור וערעור שכנגד של איילון חברה לביטוח בע"מ ("המערערת" – "המשיבה בערעור שכנגד" – "איילון") כנגד מליבו חברה לבנייה בע"מ ("המשיבה" – "המערערת בערעור שכנגד" - "מליבו"). פסק הדין ניתן בנובמבר 2017 מפי כבוד השופטים י' דנציגר, נ' הנדל וע' פוגלמן. עובדות המקרה: הערעור נסוב סביב עבודות שביצעה מליבו לבניית כביש תת קרקעי במהלכו פרצו מי תהום לאתר הבנייה התת קרקעי, הציפו אותו וגרמו להוצאות ולנזקים שונים. טענות הצדדים: מליבו טענה, כי הוצאות ונזקים אלה מכוסים בפוליסת הביטוח שאותה רכשה מחברת הביטוח איילון – המערערת והמשיבה שכנגד – המבטחת. מליבו סברה, כי לא הוטל עליה למנוע כל פריצה וחלחול של מי תהום באשר הם, וכי לא נצפה מראש כל תרחיש חדירת מי תהום לחפירה, חריג ככל שיהא. מי התהום שהציפו את האתר היו מסוג מיוחד ועוצמתי, שלא היה צפוי להיות בקרקע גם לפי ההערכות המוקדמות, וכי פעולות השאיבה והאיטום שאותן נדרש היה לבצע לפי תנאי המכרז שבו זכתה לא היו יכולות למנוע את חדירת מי התהום והצפת האתר. איילון טענה מנגד, כי כלל לא ארע מקרה ביטוח שבהתרחשותו זכאי המוטב לתגמולי ביטוח ואין היא חבה בתשלום ההוצאות והנזקים השונים שנגרמו למליבו. איילון טענה בהקשר זה, כי מליבו נטלה על עצמה לשאוב כל מי תהום שיימצאו בקרקע, ולכן כל סיכון הקשור בפריצת מי תהום לחפירה והצורך לשאבם מוטל עליה, מבליה שהדבר יעלה לכדי מקרה ביטוח. כמו כן, טענה איילון, כי "מקרה ביטוח" מוגדר כנזק שאינו צפוי מראש, וכי התרחיש של הצפת אתר העבודות במי התהום היה צפוי, ולפיכך אין הוא מכוסה על ידי הפוליסה.
John Geva and Shlomi Hadar – Lawyers and Mediators
The Supreme Court heard an appeal and cross-appeal by Ayalon Insurance Company Ltd. ("the appellant" - "the respondent in the cross-appeal" - "Ayalon") against Malibu Construction Company Ltd. ("the respondent" - "the appellant in the cross-appeal" - "Malibu"). The ruling was issued in November 2017 by the Honorable Justices Y. Danziger, N. Hendel and E. Fogelman.
Facts of the case: The appeal revolves around work carried out by Malibu to build an underground road, during which groundwater broke through the underground construction site, flooding it and causing various expenses and damages.
The parties' claims: Malibu claimed that these expenses and damages are covered by the insurance policy that it purchased from the Ayalon Insurance Company - the appellant and the counter-respondent - the insurer.
Malibu believed that it was not tasked with preventing any breach and seepage of groundwater whatsoever, and that no scenario of groundwater infiltration into the excavation, no matter how unusual, was foreseen in advance. The groundwater that flooded the site was of a special and powerful type, which was not expected to be in the ground even according to the preliminary assessments, and that the pumping and sealing operations that it was required to perform according to the terms of the tender it won could not have prevented the groundwater infiltration and flooding of the site.
Ayalon, on the other hand, claimed that no insurance event occurred at all in which the beneficiary was entitled to insurance benefits, and that she was not liable for the various expenses and damages caused to Malibu.
Ayalon argued in this context that Malibu had undertaken to pump out any groundwater that might be found in the ground, and therefore any risk associated with groundwater breaching the excavation and the need to pump it out was borne by it, assuming that this would amount to an insured event. Ayalon also argued that an "insured event" is defined as damage that was not anticipated in advance, and that the scenario of the work site being flooded with groundwater was foreseeable, and therefore is not covered by the policy.
District Court Decision
The district court accepted Malibu's principled position and awarded it compensation for most of the damages it claimed.
Ayalon appealed on the basis of her actual liability and the amount of damages, while Malibu appealed on the basis of some of the elements of her claim that were rejected.
The Supreme Court's ruling: It was determined that the heart of the dispute between the parties is the question of whether the water breach at the work site is an "insurance event" according to the contract entered into between them.
This question has two aspects: One aspect is the interpretation of the contract – what are the cases that constitute an insurance case. The second aspect is the factual question: What is the reason for the groundwater breaching the project site carried out by Malibu? Is this an unusual event according to the data that was known at the time the contract was concluded, or is the groundwater that penetrated the excavation nothing more than the same water that Malibu undertook to “degrade” in a way that would allow the underground construction work to be carried out when the ground was dry, and whose existence it was aware of in principle?
The court noted that a contract expresses, among other things and as a rule, the manner in which the parties divided the various risks between them, more clearly in relation to an insurance contract.
Such a contract is designed to deal with risk sharing, in which the insurance company assumes the risk of the insured events occurring, while the insured assumes the risk of causing damages not covered by the policy. In interpreting the contract, it is necessary to examine the risks assumed by each party.
The main difficulty in the case lies in the second aspect – what is the reason for the groundwater breach at the project site carried out by Malibu. The basis for the interpretative dispute between the parties is found in the definition of an "insured event" according to the contract: "Sudden and unforeseen physical loss or damage to the work site for the project or part thereof, for any reason not excluded under this policy."
A necessary condition for the insurer to be liable for the flooding that occurred and the damages that were caused is that they were " sudden and unforeseen in advance, " and the question is whether the events that are the subject of the appeal were sudden and unforeseen, or not.
The court rejected Ayalon's interpretation, according to which, in terms of groundwater, even the unexpected is considered expected. The wording of the circular does not support the interpretation that Malibu assumed the risk of any groundwater intrusion, even if it is exceptional and extremely rare. In contrast, the language of the contract is consistent with Malibu's interpretation, according to which it assumed the risk only with respect to groundwater intrusion that was explicitly discussed at the time the contract was concluded, but not with respect to exceptional and rare scenarios of groundwater intrusion into the project site.
The Supreme Court noted that the District Court's conclusions regarding the acceptance of the opinion of Malibu's experts are well-founded in the factual foundation presented. The District Court determined that the work carried out by Malibu to degrade the groundwater met the required standards, and there is no reason to interfere with the District Court's factual determinations in this matter.
The Supreme Court concluded that the relevant professional authorities believed that the work carried out to deal with the groundwater situation met the established professional standard, and if water nevertheless broke out – in a significant and destructive manner – this must be attributed to an exceptional event that was not anticipated at the time of planning and carrying out the work. Therefore, the water breaking event amounts to an "insurance event", which is included in the insurance policy that Malibu had.
Ultimately, the court dismissed the appeal and the cross-appeal without an order as to costs.
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