An Overview of What Constitutes Collapse for Purposes of Property Insurance Coverage Involving Hidden Decay


37 No. 10 Insurance Litigation Reporter NL 1

Insurance Litigation Reporter

July 9, 2015

Insurance Litigation Reporter

An Overview of What Constitutes Collapse for Purposes of Property Insurance Coverage Involving Hidden Decay

By Steven Plitt * and Joshua D. Rogers **

Standard homeowner and business property policies do not define the term “collapse.” The meaning of “collapse” has been the subject of substantial commentary. 1 Courts are split on whether to define the term “collapse” narrowly to include only the complete falling down of a structure, or more broadly so that a complete destruction or falling down is not required. 2

The modern view of the term “collapse” does not require a complete falling down of the building and only requires “serious impairment of structural integrity.” 3 One court, agreeing with the “[n]umerical majority of American jurisdictions [that] a substantial impairment of the structural integrity of a building is said to be a collapse” noted that a requirement that the building fall down before constituting a covered “collapse,” would be unreasonable in light of an insured’s duty to protect property from further damage. 4 Encouraging insureds to not repair structurally impaired property creating a continuing risk of collapse injuring the public is a moral hazard which should not be encouraged. A narrow reading of the term “collapse” would also allow insurers to pass the risk along to the next insurer and so on until the actual collapse takes place.

An intermediate view of collapse can be found in the Court’s decision in Doheny West Homeowners’ Ass’n v. American Guarantee & Liab. Ins. Co. 5 In Doheny, the Court noted that the language of the policy, when considered as a whole, did not support the interpretation that collapse meant “substantial impairment of structural integrity.” This was so because the policy provided that “collapse does not include settling, cracking, shrinkage, bulging or expansion,” and specifically excluded coverage for such things as damage caused by seepage of water, wear and tear, decay, deterioration, or faulty maintenance, unless it was covered under the additional collapse coverage-unless there was also damage caused by “risk of direct physical loss involving collapse of building.” 6 Because of this, the Court in Doheny adopted an intermediate view of collapse:

Thus, under the terms of the policy, the damage must be such that it will lead to collapse. Further, since any of the excluded causes could result in collapse if the initial damage was neglected for a long enough period, an additional limitation is logically necessary if we are to avoid converting this insurance policy into a maintenance agreement, … . 7

The Doheny Court concluded that the collapse needed to be actual or imminent. “Imminent” meant “likely to happen without delay; impending, threatening” or “likely to occur at any moment.” 8 The Court in Doheny noted that the intermediate view avoided both the absurdity of requiring an insured to wait for a seriously damaged building to fall, avoided an improper extension of coverage beyond the terms of the policy, and would be consistent with the policy language and the reasonable expectations of the insured. Reviewing those decisions where courts had concluded the collapse meant “substantial impairment of structural integrity” the Court in Doheny noted that those cases either implicitly or explicitly required that collapse be imminent and inevitable, or all but inevitable. 9

A. Hidden Decay

Standard homeowner and business property policies provide coverage for collapse only where caused by certain specified events. One specified cause is “hidden decay.” Specifically, the policy will typically provide: “We pay for direct physical loss involving collapse of a building or structure or any part of a building or structure caused only by one or more of the following: … hidden decay, unless the presence of such decay is known to an Insured prior to collapse; …” The issue of what constitutes “hidden decay” for purposes of collapse coverage has been the subject of much litigation across the country. A minority of those jurisdictions which have addressed this issue have construed the phrase narrowly, finding decay to mean organic rot or deterioration. For example, in Travelers Prop. Cas. of Am. v. Eyde Co., 10 the roof of a building owned by Eyde collapsed. The building was insured by Travelers at the time of the collapse and Eyde therefore submitted a claim to Travelers for coverage. 11 After an investigation, Travelers denied the claim because of a collapse exclusion in its insurance policy. 12 Travelers then filed a declaratory action seeking a declaration on coverage for the collapse.

The relevant language in the Travelers policy at issue in Eyde stated:


1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. . .

i. Collapse of Buildings

Collapse of buildings or structures meaning an abrupt falling down or caving in of a building or substantial part of a building with the result being that the building or substantial part of a building cannot be occupied for its intended purpose. . .

* * *

(2) However we will pay for collapse of buildings or structures if caused only by one or more of the following:

(b) Decay, insect or vermin damage that is hidden from view, unless the presence of such decay is known to an insured prior to collapse; 13

Eyde moved for summary judgment arguing that the building’s collapse fell within the exception to the collapse exclusion quoted above because it was caused after construction was completed by defective methods or materials in construction and in part by the listed perils of hidden decay and/or weight of personal property. 14 Specifically, Edye argued that its building collapsed, in part, because of hidden decay and the weight of personal property after construction, despite the collapse also being caused by admitted perils not listed. 15

The Court in Eyde observed that “at the center of Eyde’s argument was a tortured, albeit creative, interpretation of the word ‘decay.'” 16 It was noted that “Eyde’s expert construed the building collapse as a two step process where design omissions contributed to the gradual weakening of the strength of the building (through the pull out of the toe nails) which ultimately led to its collapse.” 17 Eyde argued that “because ‘decay’ was an undefined policy term, the Court should refer to its dictionary meaning; ‘a gradual decrease in structural strength.'” 18 Further, “Eyde [posited] that the collapse was due in part to the unseen toe nails being slowing pulled from the trusses which gradually decreased the strength of the structure until the ceiling collapsed. Therefore, the cause of the collapse was hidden decay, an enumerated peril.” 19

The Court in Eyde rejected this argument. The Court stated that “[i]n the American Heritage Dictionary, 1996, “decay” as a verb is defined as ‘1. Biology: to break down into component parts; rot … 7. To decline from a state of normality, excellence, or prosperity; deteriorate.’ As a noun, ‘decay’ is also defined as “a gradual deterioration to an inferior state: tooth decay; urban decay.‘” 20 Consistent with the definitions, the Court held that the “commonplace or plain English meaning [of “decay”] is not a general, gradual decline in strength, but rather, the organic rot or deterioration from a normal state.” 21 The Court concluded:

Eyde argues that the failure of certain nails, which pulled free from a truss due to stress, should be classified as decay. As Gertrude Stein so eloquently wrote, “A rose is a rose is a rose,” and such a failure cannot be properly classified as decay, simply by a will to do so. 22

A greater number of cases have held that “hidden decay” means more than simply organic rot or deterioration. As an example, in Cincinnati Ins. Co. v. Recreation Centers of Sun City, Inc., 23 a declaratory judgment action arose from the denial of insurance coverage for the partial collapse of the roof over the indoor swimming pool and spa area of the Sun Dial Recreation Center. 24 In that case, Cincinnati Insurance argued that the term “decay” “should be narrowly defined as pertaining to just organic decay, such as rot or fungus,” whereas the insured argued that “the term should be broadly defined so as to include inorganic degradation, such as the breakdown of the adhesive in the glulam beam caused by the heat and moisture of the pool area.” 25 The Court in Cincinnati concluded:

[T]he term “decay” is ambiguous as it is used in the policy at issue. It is clear that the term is reasonably susceptible of more than one meaning, one that provides coverage and one that excludes coverage, as it is undisputed that there exists both dictionary definitions of “decay” and case law defining similar policy language that support both sides’ contrary positions. Compare e.g., Stamm Theatres, Inc. v. Hartford Casualty Ins. Co., 113 Cal.Rptr.2d 300, 306 (Cal.App.2001) (concluding that the broader connotation of “decay” as the gradual deterioration in strength and soundness is an ordinary meaning of the term, and that so defined the term includes the deterioration of inorganic building materials), and Northeastern Center Inc. v. St. Paul Fire and Marine Ins. Co., 2006 WL 842396, at *5 (N.D. Ind. March 28, 2006) (concluding that decay is not ordinarily understood to mean only rot inasmuch as its definitions include a decline or progressive failure of strength and soundness), with Travelers Property Casualty of America v. Eyde Co., 2007 WL 107667, at *6 (W.D. Mich. Jan. 9, 2007) (concluding that the commonplace or plain English meaning of “decay” is not a general, gradual decline in strength but the organic rot or deterioration from a normal state.) Arizona follows the principle of construction that a strong indication of ambiguity is established when various jurisdiction reach different conclusions as to the meaning, intent, and effect of the language in an insurance contract. Fire Ins. Exchange v. Berray, 694 P.2d 259, 262 (Ariz. App. 1983), approved as modified on other grounds, 694 P.2d 191 (Ariz. 1984). 26

Because the Court found the term “decay” was ambiguous, the Court construed it in favor of RCSC, finding “that ‘decay’ was reasonably defined as a gradual deterioration of strength and soundness, and therefore has an inorganic component that would include the degradation of the adhesive in the failed glulam beam.” 27 The Court concluded that because “it is undisputed that some combination of the heat, moisture, and chemicals in the enclosed pool area caused the glulam beam adhesive to degrade, and since the Court construes the term ‘decay’ … to include inorganic decay, the Court finds as a matter of law that the collapse of the glulam beam was caused at least in significant part by ‘decay’ as that termed in used in the policy’s coverage extension for collapse.” 28

In Stamm Theatres, Inc. v. Hartford Cas. Ins. Co., 29 the question was whether a property insurance policy covering collapse of a building due to “hidden decay” applies to the unexpected failure of wooden roof trusses, with no evidence of rot. 30 The Court observed that “[t]he dictionary definitions of ‘decay’ include a general sense of gradual deterioration in strength or soundness, and a more specific sense of rot or organic decomposition.” 31 The Court held:

We agree with the trial court that the collapse coverage contemplates a catastrophic or calamitous event the actual or imminent collapse of a building will always meet that description. But the policy clearly includes causes of collapse that typically occur gradually, such as “[h]idden insect or vermin damage,” and “water damage.” “Hidden decay” in the form of a gradual loss of strength in wooden timbers is not so different in kind from these causes as to deviate from the intended scope of Hartford’s collapse coverage. Moreover, the collapse of Stamm’s theater cannot be attributed simply to the passage of time. Stamm’s wood expert, Stephen Quarles, believed the roof trusses gave way because of deterioration at the cellular level caused by the migration of water molecules in and out of the wood over the years, as the ambient humidity level fluctuated. It was not unreasonable for Stamm to expect coverage for “hidden decay” caused by such progressive physical deterioration, given the dictionary definition of “decay” as gradual deterioration to a weakened state. 32

Thus, the Court concluded that “[u]nder this policy and the circumstances of this case, the insured could reasonably expect coverage for an imminent collapse caused by the weakening roof trusses, unless the failure was caused by defective materials or construction methods.” 33

In Quality Time, Inc. v. West Bend Mut. Ins. Co., 34 the plaintiffs argued that collapse of a bowling alley was covered as it was caused by “decay.” The plaintiffs argued that “decay means a ‘slow change from a state of soundness or perfection'” or a “gradual deterioration to a weakened state” and “is not limited to the decomposition of organic materials such as wood.” 35 On the other hand, West Bend argued that “the term ‘decay’ should not be broadly interpreted to include ‘any gradual loss in strength without qualification,'” but, at least as applied to wood, “‘must involve some type of rot or organic composition.'” 36

The Court observed that “the American Heritage Dictionary (New College Ed.1976) includes a usage note explaining the variations in the synonyms for ‘decay,’ which are not restricted simply to ‘rot’ … .” 37 Similarly, “Webster’s Third International Dictionary also indicates that ‘decay’ may be understood to mean more than organic decomposition.” 38 The Court found that while “[a]ll dictionaries consulted by the court indicate that while ‘rot’ is a form of ‘decay,’ the latter term is not restricted to organic decomposition. Rather, ‘decay’ may more broadly understood to mean (in the words of Webster’s Third International) a ‘deteriorating change, often gradual, from a sound condition.’ While rotting apples or decaying teeth are examples of ‘decay,’ so is rusting machinery.” 39 Therefore, “[b]ecause the term decay may, consistent with popular understanding, be construed to mean gradual deterioration or degradation, without organic decomposition, this is how the court construes the term here. The court specifically rejects the insurer’s argument that “decay” is somehow restricted to rot or organic decay.” 40

It should be observed that, as the Court in Eyde noted, most of these cases adopting a broader definition of decay than merely organic rot find “something akin to organic rot … .” 41 Indeed, in holding that the “commonplace or plain English meaning [of decay] is not a general, gradual decline in strength, but rather, the organic rot or deterioration from a normal state” the Court in Eyde observed that:

Such a definition, although narrower than the definition Eyde champions, is not so narrow as to foreclose recovery for situations described in Stramm Theaters or Northeastern Center. In each of those cases, the cause of the “decay” was at its root, due to the deterioration of a matter from its normal state. Further in both cases, the deterioration involved material degrading from its natural state. In the present case, Eyde argues that the failure of certain nails, which pulled free from a truss due to stress, should be classified as decay. As Gertrude Stein so eloquently wrote, “A rose is a rose is a rose,” and such a failure cannot be properly classified as decay, simply by a will to do so. 42

Thus, even under a broader definition of decay, it appears there still must be a physical degradation of material and not simply the failure of the materials due to faulty design or construction.

B. Faulty Construction Coupled With Hidden Decay

The foregoing conclusion finds further support in cases where there both hidden decay and faulty work or construction are present and involved in the collapse. Those cases which have addressed the issue of collapse in which there are allegations of both faulty work and hidden decay generally appear to assume a distinction between the two. This distinction has been expressly recognized based upon the terms of the collapse coverage provision itself. For example, in Olde Colonial Vill. Condo. Council v. Millers Mut. Ins. Co., 43 the Court observed that under the subject policy, the insurer “pays for ‘direct physical loss or damage to Covered Property … caused by collapse of a building or any part of a building insured under this policy, if the collapse is caused by … hidden decay. . ..'” 44 Further, “[t]he policy also covers collapse caused by hidden decay during or after construction, even if ‘defective construction material or method of construction’ contributes to the collapse.” 45 The Court stated that “[p]ut another way, the policy provides that if a covered building collapses due to hidden decay, the insurance company cannot deny coverage because defective materials or shoddy construction caused or contributed to the decay.” 46 Accordingly, while “the way the building was designed and constructed played a part in the joists’ premature decay. . .,” the two were viewed by the Court as separate and distinct perils.

Similarly, in Siefferman v. United Servs. Auto. Ass’n, 47 the policy at issue expressly provided coverage for damage “caused” by hidden decay, but excluded damage “caused” by defective construction. 48 The parties in Siefferman conceded that hidden decay caused the partial collapse of the subject home, but defective construction also led to the hidden decay. 49 The Court found that “[t]hese conflicting provisions create an ambiguity in the insurance policy” and that “in resolving a conflict between a coverage clause and an exclusion clause, the court must read the exclusion clause narrowly.” 50 The Court held that “[b]ecause this court must construe the exclusion for defective construction strictly and resolve ambiguities in favor of the insureds, we conclude that the contract excludes collapses due to defective construction except where the faulty construction has led to hidden decay causing the collapse.” Thus, is a manner similar to the Olde Colonial decision discussed above, while the Court held that defective construction could cause decay, the two perils were viewed as separate and distinct by the Court.

Specifically, under collapse coverage, “hidden decay” is one of the specified causes of collapse that is covered under the policy and listed as a separately covered cause is “the use of defective material or methods in construction, remodeling or renovation if the collapse occurs during the course of construction, remodeling or renovation.” Thus, the language of the collapse coverage itself draws a distinction between the “hidden decay” and defective construction.

It should be noted that there is one decision which appears to have held that construction defects can fall within the concept of “hidden decay.” In Bardis v. Stinson, 51 the insureds argued that “the wall’s collapse after standing for so long is evidence that the wall gradually declined in strength over the twenty years since its construction, consistent with hidden decay, a covered loss.” 52 Further, “[a]lthough the policy does not define ‘hidden decay’ plaintiffs contend[ed] the [trial] court erred by interpreting the term too narrowly, to exclude hidden construction defects, and by refusing to accord the plain and ordinary meaning of the term.” 53 The insured plaintiffs contended “that by doing so, the judge improvidently decided issues of material fact, rather than restricting his decision to whether such issues exist.” 54 The Court expressly agreed with this argument. 55 Thus, it appears the Court in Bardis allowed for the possibility that a hidden construction defect could also fall within “hidden decay.”

C. Weight of People or Business Personal Property

There are only a few cases discussing the application of the phrase “weight of people or business personal property” in relation to coverage for collapse. In Mahaska Pork, L.P. v. Travelers Indem. Co. of Am., 56 Mahaska owned buildings used to house and care for hogs. 57 Travelers provided property insurance for Mahaska’s hog building. 58 The building was a one-story structure that houses sows, which lived on slotted, precast concrete sections that comprised the first floor of the building. 59 The sows’ waste product flowed from the first floor down into a concrete manure pit below the first floor. 60 The pit was divided by three concrete divider walls into four compartments. 61 The divider walls between the pit’s compartments each contained equalizer openings that were designed to allow manure to flow through from one compartment to the next so that the relative depth of manure remains equal in each compartment throughout the building. 62 The subject event occurred when the equalizer openings had become clogged and prevented the manure from flowing between compartments. 63 Due to the inability of the manure to flow properly, the volume of manure in the two southernmost compartments became unequal and the divider wall between the two southernmost compartments collapsed and struck the first floor’s support pillars, which in turn caused part of the first floor to cave in. Id. Mahaska submitted a claim to Travelers and Travelers denied the claim. 64

In determining whether there was coverage for the collapse under the policy, the Court addressed whether the “weight of personal property” caused the collapse. The Court observed that “[w]hile consensus exists among the experts that lateral pressure forced the divider wall to collapse, the experts disagree as to what effect weight had on the creation of lateral pressure.” Id. at 1192. The Court stated:

Dr. Bundy and Tometich specifically commented that the weight of the manure created the lateral pressure that caused the divider wall to collapse. Dr. Chancey admitted that if the manure were weightless, lateral pressure would not have been exerted against the divider wall. Rogalla suggested that the unequal depth of the manure on either side of the divider wall created the difference in pressure. At the hearing, counsel for Travelers admitted that the question of whether weight causes lateral pressure is a highly disputed question among the experts retained in this case. 65

Accordingly, the Court concluded that “summary judgment must be denied because genuine issues of material fact exist as to whether the relative change in the weight of the manure between the two southernmost compartments created a variation of lateral pressure and whether weight was a proximate cause of the collapse.” 66

In Middlesex Mut. Assur. Co. v. Puerta De La Esperanza, LLC, 67 the insured building owner submitted a claim to Middlesex for damage to a building where one wall had “settled” between six and ten inches, with resulting damage to floors, walls, plumbing fixtures, and other items. 68 The insured’s engineer, a consultant at Tighe & Bond, Inc., reported that the damage occurred because a load-bearing brick pier had collapsed. Id. It was his opinion “that the pier collapsed because it was ‘overloaded by the dead and live loads (i.e., the weight of building components, people and personal property) applied from the upper floors.'” Id. Plaintiff’s engineer, Peter Reynolds, reviewed the report and stated that he was in complete agreement with everything in it, including its conclusions. Id. Middlesex “refused to pay for the damage to the building on the grounds that the failure of the pier was not a “collapse” and was not covered by the policy. Id. at 296.

The policy at issue in Middlesex covered collapse only if it is caused “in part” by any of certain listed causes, including the “weight of people or personal property.” Id. at 297. Middlesex argued that the insured cannot prove that the weight of people and personal property in the building contributed to the collapse. Id. However, the Court observed that “[b]oth parties’ engineers agree that the weight of people and personal property did in fact contribute to the collapse.” Id. Further, “[n]either party has submitted any evidence that would contradict the conclusions of their engineers.” Id. Thus, the Court held that because the collapse of the pier was caused at least in part by the weight of people or property in the building, the policy covered the collapse at issue in this case. Id. at 297-98.

The above two cases address ore of the issue of whether the weight of people or personal property caused the collapse. In Quality Time, Inc. v. W. Bend Mut. Ins. Co., No. 12-1008-JTM, 2013 WL 474289 (D. Kan. Feb. 7, 2013), however, the Court addressed whether the item providing the weight actually constituted “personal property” for purposes of this provision. In that case, a bowling alley suffered damage as the result of a collapse which began because of a failure in the bottom chords (or tension ties) of the tied arches or bowstring trusses supporting the roof. 69

The precise cause of the collapse was disputed between the parties but insured argued that the collapse was caused by the weight of the scoring monitors and that these monitors constituted “personal property” therefore falling within one of the enumerated covered causes of collapse. Specifically, the insured argued that the scoring monitors “should be considered personal property because they are ‘portable … and can easily be removed by cutting the suspension cables or releasing them from the clamp,’ which can be done ‘without any damage to the building structure.'” 70 The Court observed that “[t]here is no evidence that the monitors can be removed from the alley without damage. In contrast, there is some evidence that the monitors are integrated into the building’s electrical system, and that the alley’s previous and current owners have viewed the monitors as something which should remain with the building after any sale.” 71 The Court therefore held that the fact finder could conclude that the monitors were fixtures of the alley as that term is defined under Kansas law. 72 The insured also argued that even if the scoring monitors were fixtures under standard usage and Kansas law, they should be deemed “personal property” in light of the another subsection in the policy form which provides coverage for “Business Personal Property.” 73 In that provision, the policy stated that “business personal property” included “fixtures.” 74 The Court rejected this argument, holding that “this portion of the policy is an entirely separate provision generally providing for coverage for ‘Business Personal Property;'” and “did not explicitly or implicitly attempt to define ‘personal property’ for all purposes.” 75 The Court concluded that “[t]here is nothing in the policy to suggest that ‘personal property’ as used in Schedule D should be given anything other than its ordinary and plain meaning, which would exclude real estate ‘fixtures.'” 76

Generally, fixtures are not personal property. As an example, under Arizona law, “a fixture has three elements: 1) annexation to the realty or something appurtenant thereto; 2) adaptability of application of the chattel affixed to the use or purpose to which the realty is appropriated; and 3) the intention of the party making the annexation to make a permanent accession to the freehold.” Energy Control Servs., Inc. v. Arizona Dep’t of Econ. Sec., 135 Ariz. 20, 23, 658 P.2d 820, 823 (Ct. App. 1982) (citing Price v. Sunmaster, 27 Ariz.App. 771, 558 P.2d 966 (1976)). Light fixtures and their supports could fall within this definition of fixtures. See, e.g., In re Ryerson, 519 B.R. 275, 284 (Bankr. D. Idaho 2014) (holding that recessed “can” lights, installed in-cabinet lighting, wall sconces, installed indirect lighting, and installed lights on the grounds (“carriage lights”) all constitute fixtures; however, evidence of how the suspended or hanging lighting-including the large chandeliers-were “mounted” or “installed” was too scant to support a finding they were fixtures); In re Cooperstein, 7 B.R. 618, 624 (Bankr. S.D.N.Y. 1980) (holding that various lighting fixtures which were screwed into the electric box and wired and “nutted together” to make an electric contact, constituted “household fixtures”); Farmers & Merchants Bank v. Sawyer, 26 Ala.App. 520, 522, 163 So. 657, 659 (Ala. Ct. App. 1935) (holding that plumbing, lighting fixtures, and built-in ironing board which were connected in some physical manner to house were “fixtures”); Sec. Trust Co. v. Temple Co., 67 N.J. Eq. 514, 520, 58 A. 865, 867 (Ch. 1904) (holding that chandeliers for lighting a building, though only screwed on, are sufficiently attached to the realty to become fixtures). If the lighting and lighting supports constitute “fixtures” under Arizona law then, under the reasoning of Quality Time, they are considered part of the real property rather than constituting “personal property.”

D. “Caused Only By”

In those circumstances in which more than one cause of the collapse is found to exist, another significant issue which may arise is the use of the phrase “caused only by” in the insuring clause of the collapse coverage. Specifically, most policies state that the coverage applies to “direct physical loss involving collapse of a building or structure or any part of a building or structure caused only by” certain enumerated causes, including “hidden decay.”

Most courts which have interpreted the phrase “caused only by” in the context of the above provision have held that this language limits coverage to those circumstances in which the collapse is caused only by one or more of the enumerated coverage events. In other words, where there is a contributing cause that is not covered then, irrespective of the existence of a concurrent cause which is covered, the collapse is not covered under the policy. For example, in Wurst v. State Farm Fire & Cas. Co., 77 the basement wall of Wurst’s home collapsed during a heavy rain, allowing massive amounts of water and mud to rush in. 78 Thereafter, Wurst made a claim for the loss under his State Farm homeowners policy (the “policy”). 79 State Farm conducted an investigation and denied Wurst’s claim, explaining that it had determined the collapse was caused by “soil conditions and hydrostatic pressure, which are losses excluded under the policy.” 80 The policy provided:


. . .

Collapse. We insure only for direct physical loss to covered property involving the sudden, entire collapse of a building or any part of a building.

Collapse means actually fallen down or fallen into pieces. . . .

The collapse must be directly and immediately caused only by one or more of the following

. . .

b. hidden decay of a supporting or weight-bearing structural member of the building;

. . .

Loss to … foundation is not included under item[ ] b … unless the loss is the direct and immediate cause of the collapse of the building. 81

The Court observed that under the terms of the policy, as set forth above, the insured had to establish that the collapse was “directly and immediately caused only by … hidden decay” of the basement wall. 82 State Farm asserted that Wurst did not put forth any evidence that the decay was the only cause of the collapse, or that the decay was hidden. 83 Indeed, State Farm asserted that Wurst’s own evidence established that several factors caused the collapse. 84 The Court agreed with State Farm that Wurst failed to carry his summary judgment burden on this point because the undisputed evidence, put forth by Wurst himself, demonstrates that the “decay of the mortar bond due to deterioration of the cinder aggregate masonry” was “a contributing factor … that wasn’t the only cause ” of the collapse. 85 Because the policy provides for coverage when a collapse is caused only by hidden decay and the record demonstrates that decay was not the only cause of the collapse, the Court held that Wurst’s loss was not covered by the policy. 86

In Driscoll v. Providence Mut. Fire Ins. Co., 87 upon inspecting their rental property to prepare it for a new tenant, the Driscolls discovered damage at that property, including outward-leaning outside walls, ceiling cracks, a two-inch drop in the roof, and other problems. 88 The Driscolls timely submitted a claim to their insurance company, Providence. Providence denied the claim on the basis of its expert’s opinion that the damage was caused by faulty roof design, a cause that is excluded from coverage. 89 The Driscolls hired their own engineer, who inspected the house and determined that faulty design had combined with the weight of snow from the prior winter to result in the property damage. 90 The judge ruled that the property damage was covered by the policy, finding that “that the weight of snow and ice from the winter of 1995-1996, … when coupled with the original construction design of the roof, caused most of the damage to the Driscolls’ rental property.” 91

The Court of Appeals observed that the policy expressly excluded coverage for collapse as follows:

[w]e will not pay for loss or damage caused by or resulting from any of the following:

. . .

i. Collapse: Collapse, except as provided in the Additional Coverage for Collapse. But if loss or damage by a Covered Cause of Loss results at the described premises, we will pay for that resulting loss or damage.” 92

In turn, the provision for “Additional Coverages” for collapse, paragraph A.5.d., stated in relevant part:

“We will pay for loss or damage caused by or resulting from risks of direct physical loss involving collapse of a building or any part of a building caused only by one or more of the following:

“(1) The ‘specified causes of loss.’ . ..” 93

The phrase “specified causes of loss” is explained under the “Property Definitions” contained in paragraph H.6 as meaning:

“Fire; lighting; explosion, windstorm or hail; smoke; aircraft or vehicles; riot or civil commotion; vandalism; leakage from fire extinguishing equipment; sinkhole collapse; volcanic action; falling objects; weight of snow, ice or sleet; water damage. . ..” 94

The Court held that, taken together, “the collapse exclusion, paragraph B.2.i., and the “Additional Coverages” provision for collapse, paragraph A.5.d., mean that Providence only insures certain kinds of collapse, namely, those due only to the causes listed in the latter paragraph.” 95 The Court concluded that because “no reading of the judge’s findings could lead to a conclusion that only the weight of the snow and ice caused this damage, even if the damage constituted a ‘collapse’ … the ‘Additional Coverages’ provision is inapplicable to this case.” 96

There is one decision which has reached a somewhat contrary conclusion. Specifically, in Erie Ins. Exch. v. Bledsoe, 97 the North Carolina Court of Appeals determined that the policy at issue made clear that “coverage for ‘collapse’ is allowed if, ’caused only by one or more of the following … use of defective … methods in construction, remodeling or renovation. . . .'” 98 However, the Court in that case held that “the policy does not make clear whether coverage for ‘collapse’ is allowed if one of the listed factors-in this case, defective methods of renovation-combines with another covered peril under a different provision of the policy-fire and water damage-to cause a ‘collapse.'” 99 The Court therefore held that the term “collapse” was ambiguous. 100 The Bledsoe case, however, appears distinguishable from most cases because it involves somewhat unique factual circumstances, i.e., one cause of the collapse being an enumerated cause covered under the policy and the other cause being covered elsewhere under the policy. Thus, the facts in Bledsoe are unlike most multiple cause situations which involve an enumerated cause and an uncovered cause.



Steven Plitt received his LL.M. for Insurance Law, with honors, from the University of Connecticut. He is the current successor author for COUCH ON INSURANCE 3D. He is the author of Practical Tools for Handling Insurance Cases published by Thomson Reuters, as well as other books and legal publications.


Joshua D. Rogers received his J.D. from Pepperdine University School of Law, where he was a member of the Law Review. He is an associate editor of COUCH ON INSURANCE 3D and a frequent speaker at continuing legal education programs.


See, e.g., annot. What Constitutes “Collapse” of a Building Within Coverage of Property Insurance Policy, 71 A.L.R.3d 1072, § 3 (1976 and Supp. 2002); Paul B. Tarr, et al., Insurance Coverage for Collapse Claims: Involving Standards in Legal Theories, 35 Tort & Ins. L.J. 57 (1999).


Compare Dominick v. Statesman Insurance Co., 692 A.2d 188 (Penn. Sup. Ct. 1997) (“collapse requires the structure to fall together or to fall in”); Employers Mut. Cas. Co. of Des Moines, Iowa v. Nelson, 361 S.W.2d 704, 708 (Tex. 1962) (“the word ‘inner collapse’ is not one of art, but is unambiguous and is generally understood to have the meaning of to fall or shrink together, to cave in, to fall into a flattened, distorted or disorganized state.”); Higgins v. Connecticut Fire Ins. Co., 163 Colo. 292, 430 P.2d 479 (1967) (“the word connotes a complete change in the structure, where the building loses its distinctive character as a building”); Sherman v. Safeco Ins. Co. of America, 670 P.2d 16, 17 (Colo. Ct. App. 1983) (collapse means “a flattening or breaking down because of a loss of ‘the buildings’ structural rigidity or by falling into or against itself.”). With Ercolani v. Excelsior Ins. Co., 830 F.2d 31, 34 (3rd Cir. 1987) (predicting that New Jersey would follow other states in holding that collapse requires only “serious impairment of structural integrity”); Island Breakers v. Highlands Underwriters Ins. Co., 665 So.2d 1084, 1085-86 (Fla. Dist. Ct. App. 1995) (Cope, J. concurring) (finding collapse coverage applies if there is a “substantial impairment of the structural integrity” of part of the building).


See, e.g., Nationwide Mut. Fire Ins. Co. v. Tomlin, 181 Ga.App. 413, 352 S.E.2d 612, 615 (1986) (holding that collapse includes any “reasonably detectable serious impairment of structural integrity” because such a definition “more realistically reflects the purpose of the policy”); Government Employees Ins. Co. v. DeJames, 256 Md. 717, 261 A.2d 747, 750 (Ct. App. 1970).


See Royal Indemnity Co. v. Grunberg, 155 A.D.2d 187, 189, 553 N.Y.S.2d 527 (1990).


60 Cal.App.4th 400, 70 Cal.Rptr.2d 260 (1997).


Doheny, 60 Cal.App.4th at 405-06, 70 Cal.Rptr.2d at 263.


Id. at 406, 70 Cal.Rptr.2d at 464.


Doheny, 60 Cal.App.4th at 406, 70 Cal.Rptr.2d at 264.


Doheny, 60 Cal.App.4th at 406, 70 Cal.Rptr.2d at 264.


2007 WL 107667 (W.D. Mich. Jan. 9, 2007).


Id. at *1.




Id. at *2 (emphasis in original).






Id. at *5.








Id. at *6 (quoting American Heritage Dictionary (emphasis in the original)).




Id. See also Joy Tabernacle-The New Testament Church v. State Farm Fire & Cas. Co., 2014 WL 3563468, *6 (E.D. Mich. July 18, 2014) (holding that collapse due to “loss of strength” in roof trusses does not constitute “hidden decay” because “decay ‘is not a general, gradual decline in strength, but rather, the organic rot or deterioration from a normal state.'”).


2008 WL 898725 (D. Ariz. Mar. 31, 2008).


Id. at *1.


Id. at *4.


Id. at *4.


Id. at *5.




93 Cal.App.4th 531, 113 Cal.Rptr.2d 300, (2001).


Id. at 534, 113 Cal. Rptr. 2d at 301-02.


Id. at 534, 113 Cal.Rptr.2d at 301.


Id. at 542, 113 Cal.Rptr.2d at 307-08.


Id. at 535, 113 Cal. Rptr. 2d at 302.


2013 WL 474289 (D. Kan. 2013).


Id. at *11 (citing Certain Underwriters v. KKM Inc., 215 S.W.3d 486 (Tex. App. 2006) and Stamm Theatres v. Hartford Casualty Ins. Co., 93 Cal.App.4th 531, 113 Cal.Rptr.2d 300 (2001)).


Id. (quoting Arkin v. Firemen’s Fund Ins. Co., 492 S.E.2d 314 (Ga. App. 1997)).


Id. at *12.






Id. at *13. See also Hani & Ramiz, Inc. v. N. Pointe Ins. Co., No. 316453, 2014 WL 523492, at *3 (Mich. Ct. App. Feb. 4, 2014) (holding that a roof collapse falls within the decay exception to the general exclusion for collapses because the term “decay” is not limited to an organic, biological decomposition but is much more broadly understood in its ordinary, plain sense, and the chemicals used to treat the roof trusses accelerated the lumber’s decomposition thereby causing the collapse); Bardis v. Stinson, 2014 WL 4996291, *3 & *5 (N.J. Super. Ct. App. Div. Oct. 8, 2014), appeal pending (Feb. 23, 2015) (holding that the trial court erred by interpreting the term “decay” too narrowly, to exclude hidden construction defects, and by refusing to accord the plain and ordinary meaning of the term which is “a gradual decline in strength” and, viewing the evidence in the light most favorable to plaintiffs, it suggests that the collapsed basement wall gradually declined in strength thereby constituting decay for purposes of collapse coverage under the policy); Khuns v. Bay State Ins. Co., 19 Misc. 3d 1129(A), 866 N.Y.S.2d 92 (Sup. Ct. 2008) aff’d, 78 A.D.3d 1496, 910 N.Y.S.2d 822 (2010) (holding that there insurer had not met its burden for summary judgment on issue of coverage for the collapse of a foundation wall because the plaintiff’s responding expert affidavit raises a question of fact by attributing the cause of the collapse to deteriorating mortar, which then weakened the integrity of the wall causing it to eventually fall under normal “damp” soil conditions; the Court held that mortar rotting is arguably included in the definition of decay, and such ambiguity must be resolved against the insurer); Northeastern Center Inc. v. St. Paul Fire & Marine Ins. Co., No. 1:03-CV-246TS, 2006 WL 842396, at *5-6 (N.D. Ind. Mar. 28, 2006) (holding that “the term ‘decay’ might reasonably be interpreted by a lay person to encompass damage to concrete caused by” a chemical reaction such as “an oxidation of iron sulfide minerals, or an alkali-silica reaction” because “[w]hile the term ‘decay’ is not defined in the policy, Webster’s II New College Dictionary defines that term to include ‘[g]radual deterioration to an inferior state, as of health or mental capability.'”).


Travelers Prop. Cas. of Am. v. Eyde Co., 2007 WL 107667, at *6 (W.D. Mich. Jan. 9, 2007). See e.g., Cincinnati, 2008 WL 898725 at *4 (holding that hidden decay included the breakdown of the adhesive in a glulam beam caused by the heat and moisture of the pool area); Stamm, at 542, 113 Cal. Rptr. 2d at 307-08 (holding that hidden decay included deterioration at the cellular level caused by the migration of water molecules in and out of the wood over the years, as the ambient humidity level fluctuated); Hani & Ramiz, 2014 WL 523492 at *3 (holding that hidden decay included acceleration of lumber decomposition cause by chemicals used to treat the roof trusses); Khuns, 19 Misc. 3d 1129(A), 866 N.Y.S.2d 92 (holding that hidden decay arguably included mortar rotting or deterioration); Northeastern Center Inc., 2006 WL 842396 at *5-6 (holding that “the term ‘decay’ might reasonably be interpreted by a lay person to encompass damage to concrete caused by” a chemical reaction such as “an oxidation of iron sulfide minerals, or an alkali-silica reaction”).


Id. at *6.


2002 WL 122885 (Del. Super. Jan. 28, 2002).


Id. at *5.






1996 WL 557422 (Minn. Ct. App. Oct. 1, 1996).


Id. at *2.






2014 WL 4996291 (N.J. Super. Ct. App. Div. Oct. 8, 2014).


Id. at *3.








777 F.Supp.2d 1185 (S.D. Iowa 2011).


Id. at 1187.


















Id. at 1193.


723 F. Supp. 2d 294 (D. Mass. 2010).


Id. at 295.


Id. at *7.


Id. at *10.














431 F.Supp.2d 501 (D. N.J. 2006).


Id. at 502.








Id. at 504 (emphasis in original).






Id. (emphasis in original).




69 Mass. App. Ct. 341, 867 N.E.2d 806 (2007).


Id. at 341-42, 867 N.E.2d at 807.


Id. at 342, 867 N.E.2d at 807.


Id. at 342, 867 N.E.2d at 807-08.


Id. at 342-43, 867 N.E.2d at 808.


Id. at 343, 867 N.E.2d at 809.


Id. at 343-44, 867 N.E.2d at 809 (emphasis in original).


Id. at 344, 867 N.E.2d at 809 (emphasis in original).


Id. (emphasis in original).


Id. See also Fontanella v. ITT Hartford Ins. Grp., 1998 WL 599698, *4 (Conn. Super. Ct. Aug. 27, 1998); Tom Harrison Tennis Ctr., Ltd. v. Indoor Courts of Am., Inc., 2002-Ohio-7150, ¶¶22-24 2002 WL 31859462 (Ohio Ct. App. 2002) (holding that the use of the phrase only in the collapse coverage means that “if the collapse is caused by one of the risks enumerated in Section D.1. 6., and by a risk not enumerated in that section, then Section D does not provide coverage.“); Tarleton LLC v. State Farm Fire & Cas. Co., 2014 WL 2126567, *14 (D. Or. May 21, 2014) (holding that “[t]he plain meaning of “only” as used in the phrase at issue means that the policy will cover Tarleton’s loss if the bowstring trusses ruptured due to the weight of contents and equipment alone, without another direct and immediate cause contributing to the collapse.”); Travelers Prop. Cas. of Am. v. Eyde Co., 2007 WL 107667, *3 (W.D. Mich. Jan. 9, 2007) (“The Court finds that under the plain language of the collapse exclusion, coverage is preconditioned on the collapse being caused by only one or more of the listed perils. Therefore, if any cause of the loss is due to a peril not enumerated under the policy, the collapse is not be covered.”); Romano v. Metro. Prop. & Cas. Ins. Co., 2014 WL 3537896, *6 (N.J. Super. Ct. App. Div. July 18, 2014) (holding that where the policy coverage for collapse was provided when caused “only by one or more” of several specific identified causes, “[t]he word ‘only’ in this context appears to mean ‘exclusively'” and “if an excluded cause operated together with an identified cause, then there would be no coverage.”); Southside River-Rail Terminal v. Crum & Forster Underwriters of Ohio, 157 Ohio App. 3d 325, 331-33, 811 N.E.2d 150, 154-55 (2004) (holding that “[a]s coverage was provided only if a listed cause was the only cause of the collapse and not if an unlisted cause contributed to the collapse, the express language of the Deluxe form precluded coverage for a tank collapse caused by faulty welds [which is excluded from coverage] and the weight of the tank contents [which by itself would be covered under the collapse coverage].”).


141 N.C.App. 331, 336, 540 S.E.2d 57, 61 (2000),


Id. at 336, 540 S.E.2d at 61.





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