Lambros v. Standard Fire Insurance Co.Lambros v. Standard Fire Insurance Co.
Plаintiffs, S. Peter Lambros and wife, Sophia P. Lambros, appeal from a judgment rendered n. o. v., that they take nothing in their suit against defendant, The Standard Fire Insurance Company, to recover, under the so-called “all risks” homeowner’s policy, for damage allegedly caused to plaintiffs’ dwelling by underground water.
d.Loss caused by or resulting from:
(1) Flood, surface water, . . . ;
(2) water which backs up through sewers or drains;
(8) water below the surface of the ground including that which exerts pressure on (or flows, seeps or leaks through) . foundations, walls, basement or other floors, ... or through . openings in such . . . , foundations, walls or floors[.]
Attached to the policy is Form No. HO-353, which is captioned, “Loss caused by water which backs up through sewers and drains and subsurface water assumption endorsement.” This endorsеment reads: “In consideration of an included addition premium, Exclusions d(2) and d(3), in the form attached to this policy, under the caption ‘Perils insured Against’ are hereby eliminated. ...”
Plaintiffs’ policy, then, insured against “all risks of physical loss” except:
a. [not applicable here]
b. [not applicable here]
c. [not applicable here]
d. Loss caused by or resulting from:
(1) flood, surface water . ;
(2) [deleted]
(3) [deleted]
e. Loss caused by or resulting from freezing . . . ;
f. [not applicable]
g. Loss caused by earthquake, landslide or other earth movеment;
h. [not applicable]
i. Loss caused by inherent vice, wear and tear, deterioration; rust, rot, mould or other fungi; dampness of atmosphere,
j. [not applicable]
k. Loss . . . caused by settling, cracking, bulging, shrinkage, or expansion of foundations, walls, floors, ceilings, roof structures . . . ;
The foregoing Exclusions a through k shall not apply to ensuing loss causеd by fire, smoke or explosion and Exclusions i, j and k shall not apply to ensuing loss caused by collapse of building, or any part thereof, water damage . . . , provided such losses would otherwise be covered under this policy.
The jury answered the special issues as follows: (1) Plaintiffs’ dwelling sustained a physical loss on or about July 1, 1972. (2) The loss was caused by, or resulted from, water below the surface of the ground,
After defendant filed its motion urging the court that the answers to issues 1, 2, 3, 4, 5, 7 and 9 be disregаrded, the trial court entered judgment sustaining defendant’s motion for judgment n. o. v. insofar as it relates to the answer to issue 7 and, after disregarding the answer to issue 7 on the ground that it was without support in the evidence, decreed that plaintiffs take nothing.
It is clear that the jury’s finding, in responses to issue 6, that the loss was caused by settling, cracking, etc., brings the loss within exclusion k. Plaintiffs insist that this finding does not prevent recovery because, since the exclusion applicable to loss caused by underground water had been eliminated, and since the jury found that the loss was caused by underground water, exclusion k is inapplicаble. As we understand this contention, the argument is simply that, since, as a result of the deletion of the underground water exclusion, the policy covers loss caused by underground water, all losses caused by underground water are covered and the exclusions which are still part of the policy are not applicable to such losses.
We are thus faced with the problem of determining the extent, if any, to which the deletion of a particular exclusion or exclusions, limits the applicability of remaining exclusions. 1
Giving to the deletion of exclusion d(3) its full effect, and reading such effect into the coverage provisions in the manner most advantageous to plaintiff, we arrive at a policy which insures against “all risks of physical loss, including loss caused by underground or subsurface water, except . k. loss caused by settling, cracking, bulging, shrinkage, or expansion of foundations, walls, floors, ceilings, roof structures, walks, drives, curbs, fences, retaining walls or swimming pools.” Even after this plaintiff-oriented rewriting, it is clear that loss caused by settling, etc. is not covered. The cause of the settling is irrelevant, unless exclusion k is also rewritten to limit it to settling, etc., not caused by underground water. We conclude that the deletion of the subsurface water exclusion did not eliminate exclusion k or limit it to settling not caused by underground water.
Plaintiffs next argue that, by the express terms of the paragraph following exclusion k, that exclusion is not applicable here, since exclusion k is made inapplicable to “ensuing loss and collapse of building, or any part thereof,” or water damage, provided such loss would otherwise be covered under the policy.
Admittedly, the “ensuing loss” exception to exclusions i, j and k presents some difficulty. At the outset, there are two possible interpretations of the exсeption. The first interpretation would restrict the modifying phrase, “ensuing loss” to building collapse, as though the exception were, insofar as here relevant, written in the following form:
. Exclusions i, j and k shall not apply to
(1) ensuing loss caused by collapse of building or any part thereof,
(2) water damage.
The second possible interpretation would сonstrue the exception as though it were written in the following form:
. Exclusions i, j and k shall not apply to ensuing loss caused by
(1) collapse of building or any part hereof,
(2) water damage.
Despite the rule that insurance contracts are to be construed against the insurer and in favor of the insured, we believe that the second interpretation of the excеption is the only reasonable construction. That is, the exception to exclusions i, j and k is applicable only to “ensuing loss” caused by collapse of the building, or any part thereof, and to “ensuing loss” caused by water damage. This is the construction adopted in
McKool
v.
Reliance Insurance Company,
To “ensue” means “tо follow as a consequence or in chronological succession; to result, as an ensuing conclusion or effect.” Webster’s New International Dictionary 852 (2d ed., unabridged, 1959). An “ensuing loss,” then, is a loss which follows as a consequence of some preceding event or circumstance.
McKool,
Plaintiffs next contend that they are entitled to reсover under the portion of the exception which makes exclusion k inapplicable to “ensuing loss caused by collapse of building, or any part thereof.”
Our Supreme Court, saying that the term “collapse” is unambiguous,
2
defined it as “to fall or shrink together, to cave in, to fall into a flattened, distorted or disorganized state.” With reference to partial collapse, the Court said: “[A] partial collapse would certainly mean that the foundation or walls or other supporting structures had been impaired with respect to their function of supporting the superstructure. We think the term can be defined properly as a sinking, bulging, breaking or pulling away of the foundation or walls or other supports so as materially to impair their function and to render the house unfit for habitation.”
Employers Mut. Cas. Co. of Des Moines, Iowa v. Nelson,
In this ease there is no evidence of falling in or loss of shape, no reduction to flattened form оr rubble. There is, therefore, no evidence of a collapse of the building. With reference to a partial collapse, there is ample testimony to the effect that unless repairs are made to plaintiffs’ home, a collapse “could” occur in the future. The evidence discloses cracks in the walls, doors “dragging out of line,” separations on the terrazzo floor, imperfections in the terrace, and a pulling away of the stairs from the house. Some of the supporting piers have dropped, causing the house to settle some two to three inches in the front. There is evidence of the “shearing” of one stud column and the cracking of others. One of defendant’s witnesses testified that if the “sheared” column had been “left alone and left unabated and continuing” the entire structure might have come down. This witness testified that there was a partial collapse of the structure, although he stated there had been no collapse of the foundation.
The witness who testified that there had been a partial collapse of the structure defined “collapse” as “failure of the structure” and added, “When you think of collapse, in engineering tеrms, you think of a structure that just falls completely down; and a partial collapse is where part of it falls down. In engineering terminology that’s the way we use it, and that’s the way I’m referring to it.”
It is clear that this witness did not use the term “partial collapse” in the same sense as that term was used by our Supreme Cоurt in
Nelson,
since the definition given by the witness would make it possible to find “partial collapse” even though the dwelling had not been rendered “unfit for habitation.” It is clear that the Supreme Court considered the requirement that the dwelling be rendered unfit for habitation an important element of a partial сollapse, since in the course of the
Nelson
opinion there is a clear disapproval of the decision in
Jenkins v. United States Fire Ins. Co.,
Plaintiffs fail to call our attention to any testimony to the effect that the dwelling in question was rendered unfit for habitation. The evidence relating to the nature of the damage to the structure does not even tend to indicate that the structure is no longer habitable. There is no evidence that the structure is unsafe or even unfit for use as a dwelling.
In view of the highly restrictive meaning which our Supreme Court has given to the
Since we have concluded that the judgment in favor of defendant must be affirmed, it is unnecessary to disсuss defendant’s 44 cross-points, since the questions raised by such cross-points would become relevant only if we concluded that the judgment in favor of defendant was erroneous.
The judgment of the trial court is affirmed.
Notes
. This specific problem was foreseen in Gollaher, The 1960 Texas Standard Homeowners Policy, 24 Sw.L.J. 636, 657 (1970), with specific reference to the applicability of the “settling” exclusion where the underground water exclusion has been deleted.
. Cf.
Travelers Fire Ins. Co. v. Whaley,