MUSCATINE — A squirrel may have caused the electrical arc, but it was the arc that damaged thousands of dollars of West Liberty property, the Iowa Supreme Court decided Friday, and the city's insurance company doesn't have to pay for it.
"In a story that probably would not have been written by Beatrix Potter," Justice Edward Mansfield wrote in the opinion, "a squirrel found its way onto an electrical transformer owned by a municipality, triggering an electrical arc that killed the squirrel and caused substantial damage to the municipality’s property."
In the background facts supporting the opinion, a squirrel climbed onto a transformer in Nov. 2014 at West Liberty's power plant. The animal touched an exposed 7200-volt clamp while still atop the grounded metal frame of the transformer, creating an electrical arc.
The city promptly filed a claim under the "all-risks" policy but the insurance company denied the claim based on an "electrical currents" exclusion. When the company wouldn't cover the $213,524.76 in damages, the city filed a lawsuit in January 2016. It argued destruction of property was caused by a squirrel, but a district court judge and the Iowa Court of Appeals decided the damage occurred when the animal created the electrical arc.
The Supreme Court agreed with the lower court ruling and concluded the insurance company didn't have to pay for the damages because of the arc exclusion in the policy.
"On further review," Mansfield wrote, "we too affirm the district court. We find that the loss was indeed 'caused by arcing.' Therefore, it is excluded even though something else (i.e., the squirrel) triggered the arcing. This is not a situation where two independent causes, one covered and one excluded, may have contributed to the loss."
An attorney for the city said they had not reviewed the decision and had "no comment right now" on the case.