616 F. App'x 802
6th Cir.2015Background
- Joy Tabernacle bought the church in 2009 and State Farm insured the premises under a policy in effect at the time of the 2012 ceiling collapse.
- The policy covers accidental direct physical loss to the premises, with an extended collapse provision for certain enumerated causes including decay hidden from view.
- The district court granted summary judgment against Joy Tabernacle, finding no coverage under the general exclusions for cracking and defective design and no evidence of hidden decay.
- Joy Tabernacle contends decay should be read broadly to include gradual deterioration over time, bringing the loss within the collapse extension.
- State Farm argues decay is narrowly defined as organic rot, and the collapse was caused by construction defects; the district court also relied on unpublished Michigan Court of Appeals opinions in assessing exclusions.
- The Sixth Circuit reverses and remands, holding that the collapse extension can cover decay that is hidden and may include long-term deterioration, and that general exclusions do not apply where the extension expressly applies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of decay in the collapse extension | Tabernacle advocates broad meaning (gradual deterioration) | State Farm argues narrow, organic-rot meaning | Decide decays is broad enough to cover long-term deterioration |
| Applicability of general exclusions to collapse extension | Extensions control when collapse is caused by enumerated losses | General exclusions preclude coverage | General exclusions do not bar coverage under the collapse extension when decay contributes to collapse |
Key Cases Cited
- Stamm Theatres, Inc. v. Hartford Casualty Insurance Co., 113 Cal. Rptr. 2d 300 (Cal. Ct. App. 2001) (supports broad interpretation of deprivation due to decay over time in collapse cases)