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Hommel v. George8/16/1990
Plaintiffs, individual investors in the Sellers Landing Limited Partnership, appeal the summary judgment entered in favor of garnishees, American Family Mutual Insurance Company and Travelers Insurance Company. We affirm.
Defendant in the underlying case, as a general partner, and investors, as limited partners, formed the Sellers Landing Limited Partnership for the purpose of developing the Sellers Landing Condominium Project. Investors contributed capital, and defendant's company, as general contractor, built the condominiums for ultimate sale.
As part of his agreement with the Partnership, defendant obtained a standard builder's general liability policy for personal injury and negligence claims, first with American Family and then with Travelers. Both policies, in identical language, provided coverage for property damage, defining it, in pertinent part, to include the loss of use of tangible property which has not been physically injured or destroyed."
Defendant did not sell or complete construction of the units and eventually the project was foreclosed upon. Investors sued defendant for damages consisting of compensation for the unpaid amount of capital contribution to the Partnership and for lost profits. Defendant subsequently confessed judgment, and, in an effort to collect on their judgment, investors served writs of garnishment on the insurers, claiming coverage for their investment losses.
All parties filed motions for summary judgment. The trial court determined that the investors' loss was not included within the coverage provisions of either insurer, granted summary judgment in favor of the insurers, and released the writs of garnishment.
The dispositive issue in this appeal is whether investors' damages are included in coverage for loss of use of tangible property. We hold that such damages are not and, therefore, affirm.
Tangible property is that which is capable of being handled, touched, or physically possessed. Lamar Truck Plaza, Inc. v. Sentry Insurance, 757 P.2d 1143 (Colo. App. 1988). The condominiums foreclosed upon in this case undisputedly can be so characterized.
However, purely economic losses are intangible. Travelers Indemnity Co. v. State, 140 Ariz. 194, 680 P.2d 1255 (App. 1984). Thus, while the loss of use of tangible property includes such property which has diminished in value or been made useless irrespective of any physical injury to the property, the phrase does not include mere economic damages in the nature of loss of investments, anticipated profits, and financial interests. L. Ray Packing Co. v. Commercial Union Insurance Co., 469 A.2d 832 (Me. 1983).
In accordance with these principles, the trial court concluded that "the loss sustained by these plaintiffs was the loss of their investment and possible profits which not tangible property." Investors argue, however, that they are not claiming economic injury , but consequential damages of injury to tangible property. Specifically, they argue that the condominiums were to be used to generate funds to return their investments and, solely because of defendant's negligence, they lost the "use" of the condominiums. Thus, the lost investments and profits which they suffered resulted from the loss of the use of tangible property. We disagree.
First, we do not agree with investors that, by the foreclosure , they lost "use" of the condominiums. Investors neither owned nor occupied the condominium units. In fact, the undisputed evidence in the record is that investors' sole interest in the Sellers Landing Condominium Project is their interest as limited partners in the Partnership.
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