Industrial Park Center LLC v. Great Northern Insurance Co. (Arizona Fortuity-Doctrine Coverage Ruling)

Construction Defect Ruling Issued
Date
October 16, 2026
Added to tracker
October 24, 2026
Court or forum
U.S. Court of Appeals for the Ninth Circuit
State
Arizona
Amount / scale
$2.7M
Parties
Plaintiff-Appellant: Industrial Park Center LLC (d/b/a Mainspring Capital Group)Defendant-Appellee: Great Northern Insurance Company

The Ninth Circuit on October 16, 2026 reversed summary judgment for Great Northern Insurance, reviving Mainspring Capital Group's $2.7M water-damage claim on its Tempe, Arizona building under Arizona's new 'fortuitous loss' test.

Industrial Park Center LLC, doing business as Mainspring Capital Group, owns a commercial building in Tempe, Arizona that it leased to a fish-processing tenant and insured under an all-risk property policy from Great Northern Insurance Company. After years of water and salt damage that an engineering firm attributed to preventive measures, a waterproof floor coating, a vapor barrier, and additional drainage, that were never installed, Great Northern denied Mainspring's roughly $2.7 million claim as not "fortuitous," and a federal district court granted the insurer summary judgment in July 2024. On October 16, 2026, the Ninth Circuit reversed that ruling and revived Mainspring's breach-of-contract and bad-faith claims, applying a new test for a "fortuitous" loss that the Arizona Supreme Court adopted in September 2026 in answering the Ninth Circuit's certified question.

Why it matters

The ruling sets the standard Arizona commercial property owners must meet to preserve all-risk coverage for damage tied to a known, unaddressed maintenance or design issue: coverage now turns on what the owner actually knew when the policy was bought, not on whether the loss was statistically foreseeable or likely without fixes. Owners who have deferred a recommended repair should document that the ultimate failure was not a certainty at the time of purchase or renewal, since insurers will otherwise invoke the broader foreseeability argument the Arizona Supreme Court just rejected.

Original source ↗
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A commercial building owner's fight to recover $2.7 million for years of water and salt damage is back on, after the U.S. Court of Appeals for the Ninth Circuit reversed a federal district court's summary judgment in favor of the owner's property insurer. The October 16, 2026 ruling in Industrial Park Center LLC v. Great Northern Insurance Co. turns on a question that matters well beyond this one claim: when is property damage "fortuitous," and therefore covered by an all-risk policy, versus an uninsurable certainty the owner should have expected. The Arizona Supreme Court answered that question for the first time just weeks earlier, at the Ninth Circuit's request, and the new standard it set now governs every comparable claim in the state.

Case timeline · 4 entries Latest: October 16, 2026 — The Ninth Circuit applies the new test, reverses the summary judgment, and remands, reviving the coverage and bad-faith claims

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