Queen Anne Park Homeowners Ass'n v. State Farm Fire & Cas. Co., 352 P.3d 790

Queen Anne Park (QAP) condominiums were insured by State Farm under a policy (1992–1998) that covered "accidental direct physical loss involving collapse," but did not define "collapse" except to exclude "settling, cracking, shrinking, bulging or expansion."
QAP's HOA discovered hidden decay in shear walls and claimed these conditions "substantially impaired" structural integrity and therefore constituted a collapse during the policy periods.
State Farm denied coverage, concluding a loss involving collapse had not commenced during any policy term and invoking exclusions.
The HOA sued; the federal district court granted summary judgment for State Farm; the Ninth Circuit certified the question of the meaning of "collapse" under Washington law to the Washington Supreme Court.
The Washington Supreme Court reviewed de novo, found "collapse" ambiguous, and construed the term against the insurer in favor of the insured but limited the meaning consistent with the policy's exclusion language.

Issue	Plaintiff's Argument	Defendant's Argument	Held
What is the meaning of "collapse" in the policy?	"Collapse" means "substantial impairment of structural integrity" (renders building or part unfit/unsafe).	"Collapse" is unambiguous or means only an ordinary falling/crumbling (less expansive definitions offered).	"Collapse" means "substantial impairment of structural integrity" — i.e., an impairment so severe the building or part is unfit for its function or unsafe, and it must be more than mere settling, cracking, shrinkage, bulging, or expansion.
How to construe an undefined/ambiguous policy term?	Ambiguous terms should be interpreted in favor of the insured (coverage-favoring construction).	Insurer argued ordinary meaning would not create ambiguity; urged narrower reading.	Court applied contra proferentem where ambiguity existed and construed "collapse" in the insured's favor, subject to the policy's express exclusions.

Sprague v. Safeco Ins. Co. of Am., 174 Wn.2d 524, 276 P.3d 1270 (2012) (discussed competing definitions of "collapse" and court division on its meaning)
Queen City Farms, Inc. v. Cent. Nat'l Ins. Co. of Omaha, 126 Wn.2d 50, 882 P.2d 703 (1994) (policy construction principles: give policy a fair, reasonable, and sensible construction)
Quadrant Corp. v. Am. States Ins. Co., 154 Wn.2d 165, 110 P.3d 733 (2005) (ambiguity standard: terms ambiguous if more than one reasonable interpretation)
Beach v. Middlesex Mut. Assurance Co., 205 Conn. 246, 532 A.2d 1297 (1987) (adopting definition of "collapse" as substantial impairment of structural integrity)
Buczek v. Cont'l Cas. Ins. Co., 378 F.3d 284 (3d Cir. 2004) (treating "collapse" as substantial impairment of structural integrity; discusses imminency/health-and-safety considerations)
Mercer Place Condo. Ass'n v. State Farm Fire & Cas. Co., 104 Wn. App. 597, 17 P.3d 626 (2000) (State Farm previously accepted a definition akin to substantial impairment of structural integrity)