Tustin Field Gas & Food v. Mid-Century Ins. Co., B268850

Background

Plaintiff Tustin Field Gas & Food owns a gas station with two double-walled underground storage tanks (USTs) buried beneath concrete and soil; the outer sheath is fragile fiberglass.
In 1997 UST-1 was installed directly on native soil and a nine-inch boulder (contrary to manufacturer instructions to use pea gravel/crushed rock).
In 2013 annual testing revealed a long crack in UST-1’s fiberglass sheath where it contacted the boulder; the boulder also split; the inner steel tank remained intact and the tank retained its cylindrical shape.
Plaintiff submitted a claim to Mid‑Century Insurance for excavation and repair costs; insurer denied coverage, arguing the damage was not a “collapse” under the policy.
The Policy excluded “Collapse” generally but contained a limited Additional Coverage for collapse caused by enumerated causes; it also expressly excluded settling, cracking, shrinkage, bulging or expansion.
On cross-motions the trial court granted summary judgment for defendant, holding the tank damage was at most a substantial impairment of structural integrity (not a collapse as a matter of law); plaintiff appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
What does “collapse” mean under this policy?	Collapse should be broadly read to include any material impairment that prevents a part from performing its structural function.	The policy’s context and exclusions limit “collapse” to actual (not merely imminent) collapse and exclude mere settling/cracking, so a narrower meaning applies.	Collapse is not defined by the policy and, given the exclusions, must be read narrowly; mere substantial impairment is not collapse.
Did UST‑1 suffer a collapse?	The split fiberglass sheath and regulatory unusability amount to a collapse.	The inner steel wall stayed intact, the tank kept its shape, and the damage is at most substantial impairment/settling — not collapse.	No triable issue: undisputed facts show only substantial impairment; no actual collapse as a matter of law.
Is the policy ambiguous so ambiguity must be construed for insured?	Absence of a definition creates ambiguity favoring the insured; interpret collapse broadly.	The term is not ambiguous in context; controlling California precedent limits collapse when settling/cracking are excluded.	Not ambiguous in plaintiff’s favor; insurance can be enforced according to ordinary meaning and controlling case law.
Do plaintiff’s expert statements or insurer statements create triable issues or estoppel?	Expert described the event as a “collapse”; insurer once used “collapse” in a filing — estoppel or evidence for plaintiff.	Expert testimony on policy meaning is improper; the insurer’s stray statement is not a binding concession.	Expert labels and insurer’s colloquial language do not create a legal issue; interpretation is a question of law for the court.

Key Cases Cited

Doheny West Homeowners’ Assn. v. American Guarantee & Liability Ins. Co., 60 Cal.App.4th 400 (1997) (distinguishes policies that cover "risk of" or "involving" collapse from those that do not; mere settling/cracking insufficient)
Jordan v. Allstate Ins. Co., 116 Cal.App.4th 1206 (2004) (policy language controls whether imminent collapse is covered; ordinary meaning applied)
Panico v. Truck Ins. Exchange, 90 Cal.App.4th 1294 (2001) (policies referencing risk of collapse can cover imminent collapse)
Stamm Theatres, Inc. v. Hartford Casualty Ins. Co., 93 Cal.App.4th 531 (2001) (mere settling, cracking, shrinkage, bulging or expansion not enough to establish collapse)
Rosen v. State Farm General Ins. Co., 30 Cal.4th 1070 (2003) (courts must enforce the contract language; public policy cannot rewrite coverage terms)
Sabella v. Wisler, 59 Cal.2d 21 (1963) (useability of a structure is relevant; sinking/settling that leaves house usable is not collapse)
Grebow v. Mercury Ins. Co., 241 Cal.App.4th 564 (2015) (discusses split in authority and broader out-of-state definitions that treat collapse as material impairment of structural integrity)