Dustin Sullivan et al. v. Nationwide Affinity Insurance Co.
A United States Court of Appeals for the Tenth Circuit decision on Monday relieved Nationwide from having to cover two homes damaged by large rocks, deeming coverage for the rockfall as barred under the “earth movement” exclusion of the policy. Three large boulders became dislodged and rolled into the subject homes, which were located at the bottom of a hill in Colorado. Policyholders argued that the earth movement exclusion does not preclude coverage because the damage was caused by the rolling boulders alone, and not any sort of associated landslide. The Tenth Circuit, in an unpublished decision, found that the earth movement exclusion was intended to broadly encompass all natural material that makes up the surface of the earth. The court ruled that the earth movement exclusion therefore applies to the rockfall, as a reasonable person would recognize that rocks of all sizes comprise the surface of the earth. It would be unreasonable, the court decided, if damage caused by a soil slide is barred, but a rock-only slide is covered.