CAN THEFT BE VANDALISM?

Vacant	Property
Vandalism	Theft

Eldridge Land, LLC (Eldridge) owned a vacant building that once housed a grocery store. It was insured on a Commercial Property Policy written by Essex Insurance Company (Essex). The policy provided vandalism coverage but excluded theft, with the exception of “damage caused by the breaking in or exiting of burglars”.

On March 28, 2006, intruders entered the building and caused a great deal of damage throughout the structure while removing the copper wiring and copper pipes. The walls, ceilings, electrical conduit boxes, and wall coverings all sustained damage. Eldridge filed a claim. Essex denied the claim based upon the theft exclusion. Essex agreed that damage done to gain entry was covered but the value of that part of the loss was less than the $5,000 deductible.

Eldridge and Essex both filed for summary judgment of policy coverage. Eldridge alleged that the damage was caused by multiple acts of vandalism that was willful and malicious but agreed that the value of the copper items should be excluded. Eldridge argued that the wall damage was caused by the breaking in or exiting of burglars. Essex argued that all damage was caused by an act of theft.

The trial court ruled in favor of Eldridge and the case was appealed. The higher court held that damage to the interior of the building by thieves was incidental to the theft of the copper and fell within the exclusion of the policy and that the damage to interior walls was outside the term “breaking in”.

Essex Insurance Company v. Eldridge Land, LLC, 2007-41776, Court of Appeals of Texas, May 20, 2010