The appellants and defendants below, State Farm Fire and Casualty Company (“State Farm”) and Allstate Insurance Company (“Allstate”), appeal an order of the Circuit Court of Jackson County granting summary judgment to several homeowners in a dispute concerning policy exclusions in two homeowners’ insurance policies. The policyholders’ homes were damaged by rocks falling from the highwall of a 40-year old abandoned rock quarry situated next to the homes. The policyholders’ insurance carriers denied coverage, claiming that the applicable insurance policies excluded losses caused by “landslides” and “erosion.” The circuit court concluded that the policies did not exclude from coverage losses caused by “rockfalls” and “weathering,” and that the plaintiffs’ losses were the result of those events. The circuit court held that the plaintiffs were entitled to coverage under the policies.
After reviewing the record, we conclude that questions of material fact exist concerning whether coverage exists under both policies. We reverse the circuit court’s order granting summary judgment and remand the ease for trial.
I.
Factual Background
The plaintiff-appellees in this case — Robert and Janet Murray, Bernie and Julie Rees, and Robert Withrow — are the owners of three adjacent properties on Spring Street in Ripley, West Virginia. The plaintiffs’ homes were constructed on their properties in the 1970’s. Immediately adjacent to the rear of the three houses is a man-made high-wall standing nearly 50 feet high. This vertical highwall is the result of quarrying operations conducted in the 1950’s. The highwall is allegedly located on property owned by defendant-appellee Robert B. Harris.
*481 On February 22, 1994, several large boulders and rocks fell off the highwall and onto the houses owned by plaintiffs Murray and Withrow, causing extensive damage. The house owned by plaintiffs Mr. and Mrs. Rees was not damaged by rocks. However, firemen compelled all three families to leave their homes because of the possibility that additional rocks could fall, and turned off all electricity and water. An engineer who examined the highwall several days later concluded that further rockfalls would “continue to occur, some with potentially disastrous results.” 1 None of the three families has lived in their homes since February 22,1994. 2
Several engineers and geologists examined the property and highwall in the following weeks. Each gave, to some extent, an opinion that what occurred on Spring Street was primarily a “rockfall” and not a “landslide,” because no “sliding” was involved: a layer of shale supporting a layer of sandstone “weathered,” removing support for the sandstone, and sandstone blocks broke loose and dropped onto the plaintiffs’ homes. 3 One expert said that he thought of a rockfall as “almost a vertical displacement free-falling through the air off of a cliff, a highwall, an escarpment.” However, several of the experts conceded that rock falls are considered to be a type of landslide, and are accepted as a sub-category of a landslide; and they further agreed that erosion contributed to the moving of the rocks in the instant case.
Furthermore, there is evidence in the record that negligent construction of the high-wall behind the plaintiffs’ residences, namely the cutting of the rock face at a near vertical angle, contributed to the rockfall. Expert George A. Hall indicated that “the design of the cut-slope on Spring Street did not meet standards which you would reasonably and *482 normally expect for civil engineering purposes of designing cut-slopes.” He also said that had proper civil engineering techniques been used when the highwall was created, the danger of a fall like the one that occurred would not be present.
Plaintiffs Murray and Rees filed claims for the losses to their homes with their homeowner’s insurance carrier, defendant State Farm. Plaintiff Withrow filed a similar claim with his insurance carrier, defendant Allstate. Insurance agents notified the plaintiffs that State Farm and Allstate would not cover the losses, citing to numerous policy provisions and exclusions, including an exclusion for losses caused by landslide or erosion.
The plaintiffs then filed the instant lawsuit against defendants Allstate and State Farm alleging breach of contract and bad faith. The plaintiffs also sued defendant Harris for nuisance, trespass, and failing to protect the plaintiffs’ property from the “dangerous, artificial manmade condition existing on the defendant’s property!.]” Defendant State Farm filed a counterclaim against the plaintiffs seeking a declaratory judgment regarding State Farm’s obligations under its policies.
The plaintiffs and defendants State Farm and Allstate filed motions for summary judgment concerning coverage under the disputed insurance policies. Through a letter ruling on January 3, 1997 and a subsequent order on March 17, 1997, the circuit court granted summary judgment to the plaintiffs. The circuit court held that the rockfall “is a loss covered under the plaintiffs’ respective insurance policies.” The court also held that whether the plaintiffs’ damages were caused by a rockfall, and the extent of those damages, were issues to be determined by a jury.
State Farm and Allstate now appeal the circuit court’s order.
II.
Standard of Review
This appeal arises from the circuit court’s granting of partial summary judgment to the plaintiff. Our review is
de novo.
Syllabus Point 1,
Painter v. Peavy,
In this case we are primarily asked to review the circuit court’s interpretation of an insurance contract. In
Payne v. Weston,
When a court interprets an insurance policy, the “[l]anguage in an insurance policy should be given its plain, ordinary meaning.” Syllabus Point 1,
Soliva v. Shand, Morahan & Co., Inc.,
However, “[w]henever the language of an insurance policy provision is reasonably susceptible of two different meanings or is of such doubtful meaning that reasonable minds might be uncertain or disagree as to its meaning, it is ambiguous.” Syllabus Point 1,
Prete v. Merchants Property Ins. Co. of Indiana,
With these principles in mind, we undertake a plenary review of the disputed policy language to determine whether the plaintiffs’ homeowners’ policies from defendants Allstate and State Farm provide coverage in the factual situation presented.
III.
Discussion
Defendants Allstate and State Farm provided the plaintiffs with “all-risk” homeowner’s insurance policies.
4
Under an all-risk policy, recovery is allowed for all losses arising from any fortuitous cause, unless the policy contains an express provision excluding the loss from coverage.
Essex House v. St. Paul Fire & Marine Ins. Co.,
Both Allstate and State Farm contend that the losses suffered by the plaintiffs are barred from coverage by express policy provisions excluding losses resulting from “earth movement, including but not limited to ... landslide ... [or] erosion[.]”
The defendants challenge the circuit court’s order on four grounds. First, both defendants challenge the circuit court’s summary judgment order finding that coverage existed under the policies because the plaintiffs’ losses were the result of a “rockfall” caused by “weathering,” and not excluded by policy provisions regarding “landslide” and “erosion.” Second, both defendants argue that the earth movement exclusions are clear and unambiguous, and should therefore not be construed but instead applied to exclude coverage for the plaintiffs. Third, defendant State Farm argues that even if the earth movement exclusion could be construed as ambiguous, an extensive “lead-in” clause in its policy clarifies any ambiguity and excludes any coverage as to plaintiffs Murray and Rees. Lastly, both defendants argue that the plaintiffs cannot recover for the total loss of their homes due to the potential for a future rockfall, but can only recover for the actual physical damage sustained.
We address these arguments in turn.
A.
The Circuit Court’s Summary Judgment Order
We first address the circuit court’s order. While the circuit court’s letter ruling and subsequent order are less than perfectly clear, it appears that the circuit court concluded that the boulders that damaged the plaintiffs’ homes arose from a “rockfall” rather than a “landslide.”' Based in part upon the expert testimony in the record, the circuit court construed the policy language strictly against the insurance carriers and found that “the language therein did not include or contemplate a rockfall[.]” The circuit court further referred to expert testimony, apparently to hold that the rockfall was the result of “weathering” as opposed to “erosion,” and that the plaintiffs were therefore covered under their homeowners’ policies.
Defendants Allstate and State Farm first contend that the circuit court erred in finding that a “rockfall” is not included within the definition of “landslide.” The defendants cite to
Dupps v. Travelers Ins. Co.,
We agree with the defendants that the circuit court erred. We hold that the plain, ordinary meaning of the word “landslide” in an insurance policy contemplates a sliding down of a mass of soil or rock on or from a steep slope. See generally, 13A G. Couch, Couch on Insurance 2d 48:180 (1982) (“What Constitutes a Landslide”).
Allstate and State Farm also argue that the circuit court erred in concluding that “weathering” is different from “erosion,” and therefore any loss resulting from weathering is not excluded from coverage. The Dictionary of Geological Terms defines “erosion” as “the group of processes whereby earth or rock material is loosened or dissolved and removed from any part of the earth’s surface,” specifying that it includes the processes of “weathering, solution, corrosion and transportation.” The American Heritage Dictionary also includes within its definition of erosion the “natural processes, including weathering, dissolution, abrasion, corrosion and transportation, by which material is removed from the earth’s surface.”
We again agree that the circuit court erred. We hold that the plain, ordinary meaning of the word “erosion” in an insurance policy contemplates a natural process that includes weathering, dissolution, abrasion, corrosion and transportation whereby material is removed from the earth’s surface.
Applying these definitions to the circuit court’s order, it is clear that the circuit court’s granting of partial summary judgment to the plaintiffs was incorrect. A naturally-occurring “rockfall” is included within the common definition of “landslide,” and the process of “weathering” to rock is included as a component of the natural process of erosion. We further hold that the circuit court erred in finding that as a matter of law coverage existed under the policies by applying these definitions. However, as discussed below substantial questions of fact remain to be resolved concerning the existence of coverage.
B.
Earth Movement Exclusion
Both insurance policies in this case contain exclusions for “earth movement.” The policy issued by Allstate excludes coverage for any loss resulting from:
2. Earth movement, including, but not limited to, earthquake, volcanic eruption, landslide, subsidence, mud flow, sinkhole, erosion, or the sinking, rising, shifting, expanding, bulging, cracking, settling or contracting of the earth. This exclusion applies whether or not the earth movement is combined with water.
Similarly, the policy issued by State Farm excludes coverage for losses resulting from:
b. Earth Movement, meaning the sinking, rising, shifting, expanding or contracting of earth, all whether combined with water or not. Earth movement includes but is not limited to earthquake, landslide, mudflow, sinkhole, subsidence and erosion.
When a policyholder shows that a loss occurred while an insurance policy was in force, but the insurance company seeks to avoid liability through the operation of an exclusion, the insurance company has the burden of proving the exclusion applies to the facts in the case. Syllabus Point 7,
National Mut. Ins. Co. v. McMahon & Sons, Inc.,
Both of the earth movement exclusions in this case refer to “earth movement” including, but not limited to “earthquake,” “volcanic eruption,” “landslide,” “subsidence,” “mud flow,” “sinkhole,” “erosion,” “sinking,” “shifting,” or “settling.” None of these terms is further defined in the insurance policies. The defendant insurance companies argue that the facts in this case show that the rocks and earthen debris that fell on the plaintiffs’ homes constitute a “landslide” caused by “erosion,” an event within the earth movement exclusions.
*485 The plaintiffs, however, argue that the facts show the damage to their homes was caused by the negligent creation of the high-wall in the 1950’s and its negligent maintenance by defendant Harris today, two events that would be covered by the policies.
On the one hand, the exclusions cited in the defendants’ policies could bar coverage for solely natural events such as earthquakes, volcanic eruptions, and sinkholes. On the other hand, the same exclusions refer to events which could be man-made, such as subsidence or earth movement caused by equipment or a broken water line. Or, as alleged in this case, earth movement could be caused by both man and nature over a period of time, such as landslides, mudflows, or the earth sinking, shifting, or settling. Because the policy language is reasonably susceptible to different meanings, we believe that the earth movement exclusions in the insurance policies at issue are ambiguous, and must have a more limited meaning than that assigned to it by the defendants.
The majority of courts that have considered earth movement exclusions have found them to be ambiguous. 5 Having found the clause to be ambiguous, courts have used two methods of policy construction to examine whether coverage exists or is excluded under the earth movement exclusion.
First, courts have applied two doctrines of construction, ejusdem generis and noscitur a sociis, to limit the application of the earth movement exclusion to natural, catastrophic events, rather than man-made events.
Second, courts have examined the particular causes of the loss presented by the policyholder, and although an excluded event (such as earth movement) may have been a concurring or contributing cause of a loss, courts have allowed policyholders to recover under an insurance policy if the proximate cause of the loss was an event insured by the policy.
We believe that both approaches are applicable in this case. 6 We therefore examine exclusions in the instant case using the same two approaches.
First, having determined that the earth movement exclusions at issue in this case are ambiguous, we apply the construction principles of
ejusdem generis
and
noscitur a sociis.
Under the doctrine of
ejusdem generis,
“[w]here general words are used in a contract after specific terms, the general words will be limited in their meaning or restricted to things of like kind and nature with those specified.” Syllabus Point 4,
Jones v. Island Creek Coal Co.,
In the seminal case of
Wyatt v. Northwestern Mutual Ins. Co. of Seattle,
... to relieve the insurer from occasional major disasters which are almost impossible to predict and thus to insure against. There are earthquakes or floods which cause a major catastrophe and wreak damage to everyone in a large area rather than one individual policyholder. When such happens, the very basis upon which insurance companies operate is said to be destroyed. When damage is so widespread no longer can insurance companies spread the risk and offset a few or the average percentage of losses by many premiums. Looking at the special exclusionary clause in the policy here in question, it seems to cover situations where one single event could adversely affect a large number of policyholders.... All of these are phenomena likely to affect great numbers of people when they occur.
This gives some force to the view that the various exclusions were not intended to cover the situation as here where “earth movement” occurred under a single dwelling, allegedly due to human action of third persons in the immediate vicinity of the damage.
Examining the exclusionary terms used by Allstate and State Farm in their context, and applying the rule that ambiguities must be resolved in favor of the insured, we conclude that both earth movement exclusions must be read to refer only to phenomena resulting from natural, rather than man-made, forces.
Therefore, when an earth movement exclusion in an insurance policy contains terms not otherwise defined in the policy, and the terms of the exclusion relate to natural events (such as earthquakes or volcanic eruptions), which events, in some instances, may also be attributed to a combination of natural and man-made causes (such as landslides, subsidence or erosion), the terms of the exclusion must be read together and limited to exclude naturally-occurring events rather than man-made events.
The second approach consistently taken by courts in construing insurance policies is that for coverage to exist under an insurance policy, policyholders are required to prove that the efficient proximate cause of the loss was an insured risk.
7
For example, in
Huntington, Ashland & Big Sandy Transportation Co. v. Western Assur. Co. of Toronto, Ont.,
Another example is
LaBris v. Western National Ins. Co.,
The scope of coverage under an all-risk homeowner’s policy includes all risks except those risks specifically excluded by the policy. A majority of jurisdictions use the “efficient proximate cause” doctrine 8 in adjudicating coverage issues for all-risk insurance policies, where both a covered and a non-covered peril contribute to a loss. 9 When a loss is caused by a combination of covered and specifically excluded risks, the loss is covered if the covered risk was the proximate cause of the loss. Two leading treatises sup-According to Couch on port this position. Insurance:
In determining cause of loss for purposes of fixing insurance liability, if there is evidence of concurrent causes for the damage, the “proximate cause” to which the loss is to be attributed is the dominant, efficient one that sets the other causes in operation; causes which are incidental are not proximate, even though they may be nearer the loss in both time and place. Where it is said that the cause to be sought is the direct and proximate cause, it is not meant that the cause or agency which is nearest in point of time or place to the result is necessarily to be chosen, since there may be a dominant cause even though concurrent or remote in point of time or place.
L. Russ, 7 Couch on Insurance 3d § 101:44 (1997). Similarly, Professor Appleman’s treatise states that “where the insured risk was the last step in the chain of causation set in motion by an uninsured peril, or where the insured risk itself set into operation a chain of causation in which the last step may have been an excepted risk,” recovery may be allowed. J. Appleman, 5 Insurance Law and Practice § 3083 (1969). 10
*488 We hold that, when examining whether coverage exists for a loss under a first-party insurance policy when the loss is caused by a combination of covered and specifically excluded risks, the loss is covered if the covered risk was the efficient proximate cause of the loss. No coverage exists for a loss if the covered risk was only a remote cause of the loss, or conversely, if the excluded risk was the efficient proximate cause of the loss. The efficient proximate cause is the risk that sets others in motion. It is not necessarily the last act in a chain of events, nor is it the triggering cause. The efficient proximate cause doctrine looks to the quality of the links in the chain of causation. The efficient proximate cause is the predominating cause of the loss. 11
One more point is made clear by courts considering the problem of concurrent risks: the question of which event was the efficient proximate cause of the loss is generally a question of fact.
State Farm Fire & Cas. Co. v. Von Der Lieth,
After reviewing the record, we conclude that substantial questions of material fact remain for jury resolution. The earth movement exclusions apply to exclude naturally occurring risks. The plaintiffs argue that the evidence currently in the record suggests that the rocks fell from the quarry highwall due to its negligent vertical con *489 struction in the 1950’s, and its negligent maintenance by the current owner. These risks facially appear to be covered by the language in both policies. Conversely, the defendants argue that the plaintiffs’ losses are the result of the excluded event of a landslide caused by another excluded event, erosion. We believe that whichever of these events was the efficient proximate cause of the plaintiffs’ losses is a question for the finder of fact.
C.
State Farm’s Lead-In Clause
State Farm contends in its reply brief that a “lead-in” clause in the “Losses Not Insured” section of its policy precludes coverage to plaintiffs Murray and Rees, and excludes coverage for all forms of earth movement, regardless of whether resulting from natural or man-made causes. The State Farm lead-in clause states:
SECTION I — LOSSES NOT INSURED
* * *
2. We do not insure under any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events. We do not insure for such loss regardless of: (a) the cause of the excluded event; or (b) other causes of the loss; or (c) whether other causes acted concurrently or in any sequence with the excluded event to produce the loss; or (d) whether the event occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:
The policy then goes on to list numerous occurrences that are excluded, including the previously discussed “earth movement.”
State Farm uses unique language in the “Losses Not Insured” section of its policy (which includes the earth movement exclusion), language not employed by other insurance companies in standard all-risk insurance policies. As one court recently recognized in construing an earth movement exclusion,
... State Farm adopted language peculiar to itself, and one of plaintiffs’ [insurance] experts describes State Farm as a “deviated company” which employs its own language and is “known in the industry as ones who try to push earth movement as broadly as they can.”
Winters v. Charter Oak Fire Ins. Co.,
The court in
Cox v. State Farm Fire & Cas. Co.,
Because “external” is not defined in the policy, we must give the word its usual and common meaning. As we have found no definition of the word that means anything other than apart, beyond, exterior or connected to the outside (see Webster’s Third New International Dictionary), we cannot define the word to include a concept of non-natural or man-made forces as State Farm would have us do. Therefore, we must interpret this provision as excluding coverage arising from natural forces from beyond or outside the property.
We believe a similar analysis applies here. The policy language at issue in this case does not define the term “external,” and we must therefore give the word its “plain, ordinary meaning.” We can find no definition for “external” that means anything other than outside, apart, or beyond, and we cannot define the word to include man-made forces as State Farm would have us do. As with the court in Cox, we interpret the provision as excluding from coverage natural risks arising from beyond or outside the property.
*490 State Farm also argues that its lead-in clause operates to defeat the efficient proximate cause doctrine, and argues that if earth movement in any way contributes to a loss, regardless of the proximate cause, then under the lead-in clause the entire loss is excluded from coverage under the all-risk policy. The plaintiffs, however, argue that such a construction reaches a result contrary to the reasonable expectations of policyholders. We agree with the plaintiffs’ argument.
“With respect to insurance contracts, the doctrine of reasonable expectations is that the objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations.” Syllabus Point 8,
National Mut. Ins. Co. v. McMahon & Sons, Inc.,
As in the instant case, where third-party negligence is alleged to be the proximate cause of a loss, we believe a policyholder could reasonably expect to be covered under State Farm’s policy. Only through a painstaking review of the lengthy “Losses Not Included” section would a policyholder discover the language suggesting that, because the negligence occurred in conjunction with an excluded event, the loss would not be covered. “Insureds with all-risks insurance likely have heightened expectations because of the comprehensive nature of the coverage and the greater premium rates. These expectations would not often be given effect if recovery was denied whenever an exception or exclusion contributed to the loss.” R. Fierce, Insurance Law — Concurrent Causation: Examination of Alternative Approaches, 1985 S.Ill.U.L.J. 527, 544 (1986).
An example of the overbreadth of State Farm’s position was suggested by the court in
Wyatt v. Northwestern Mut. Ins. Co. of Seattle,
It seems hard to contend that the insurance policy meant to exclude all earth movements, for it is difficult to distinguish between a situation where a piece of heavy equipment breaks loose and hits a house causing serious damage and a situation where that equipment instead hits only an embankment next to a house but causes the earth to move and thereby damages the house. Certainly not all earth movements, or at least those where some human action causes such are included in the exclusion.
However, applying State Farm’s interpretation of its policy to the fact pattern proffered by the court in Wyatt, there would be no coverage. We believe such an interpretation clearly goes against the reasonable expectations of the parties.
We agree with the court’s statement in
Howell v. State Farm Fire & Cas. Co.,
Indeed, if we were to give full effect to the State Farm policy language excluding coverage whenever an excluded peril is a contributing or aggravating factor in the loss, we would be giving insurance companies carte blanche to deny coverage in nearly all cases. A similar point was made by the Supreme Court in Garvey [v. State Farm Fire & Cas. Co.,48 Cal.3d 395 , 408,257 Cal.Rptr. 292 , 299,770 P.2d 704 , 711]. There, the court noted that the insured cannot be permitted to claim coverage merely because an included peril is a contributing cause of a loss. The court reasoned that since “[i]n most instances, the insured can point to some arguably covered contributing factor” such a rule would transform an “ ‘all-risk’ ” policy into an “ ‘all-loss’ ” policy, and would make the insurer liable in almost every case.
The present case presents the inverse situation. Here, the State Farm policies would deny coverage whenever an excluded peril is a contributing factor to the loss. Since, in most instances, an insurer can point to some arguably excluded contributing factor, this rule would effectively trans *491 form an “all-risk” policy into a “no-risk” policy.
A statement in a concurring opinion to
Howell
makes clear how State Farm’s interpretation of the lead-in clause goes against the reasonable expectations of policyholders. Justice Barry-Deal stated that “[n]o reasonable person would pay for insurance against some future peril if it were possible for the insurer to avoid liability by discovering an excluded peril somewhere in the chain of causation.... [W]here an insurer chooses to insure against the direct and proximate results of a certain peril, it may not rely on the concurrence of an excluded cause to deny coverage.”
Our examination of the State Farm lead-in clause leads us to a similar conclusion. As indicated previously, when an insurance carrier chooses to insure against a loss proximately caused by a particular peril, it may not rely on the mere concurrence of .an excluded peril to deny coverage. The excluded peril must itself be the efficient proximate cause of the loss. Because State Farm’s lead-in clause conflicts with the reasonable expectations of the parties, it should be construed to allow coverage for losses proximately caused by a covered risk, and deny coverage only when an excepted risk is the efficient proximate cause of the loss. 14
*492 D.
Whether the Plaintiffs Suffered a “Direct Physical Loss” To Their Property
As indicated previously, the Allstate policy provides coverage for any “sudden and accidental loss to the property,” while the State Farm policy “insure[s] for accidental direct physical loss to the property[.]” Defendants Allstate and State Farm do not dispute the fact that the plaintiffs’ losses were “sudden” and “accidental.” Instead, the defendants argue that as a matter of law the insurance carriers cannot be held responsible for the total loss of the plaintiffs’ property. The defendants essentially contend that while their policies might cover the actual physical damage to the Murray and With-row homes, the policies do not cover any losses occasioned by the potential damage that could be caused by future rockfalls.
The appellants cite us to only one case in support of their argument,
Hoffman v. State Farm Fire & Cas. Co.,
In
Hoffman,
the court held that policyholders were not entitled to recover under an all-risk homeowner’s policy when the damage became apparent over a year
after
the policyholders sold their home, canceled the policy and moved out. The policyholders contended that, a year after they moved out of their home, they discovered an entire region surrounding their former home was subjected to a massive, slow-moving landslide, and that their former home suffered some structural damage. The policyholders contended that they were entitled to recover for the damage to their former home, and to recover for the “just discovered” diminished market value of the property when it was sold. The court stated, in
dicta,
that “[diminution in market value is not a covered peril. In fact, insuring land values is illegal in California, and doing so is a felony misdemeanor.”
Hoffman
fails to mention four other California cases where the courts held policyholders
could
recover for losses to their homes other than tangible physical damage caused by landslides.
See Strickland v. Federal Ins. Co.,
For instance, in Hughes, supra, the policyholders awoke one morning to discover 30 feet of their backyard had washed into a creek, leaving their home standing on the edge of a newly-formed 30-foot cliff. The landslide deprived the house of subjacent and lateral support essential to the stability of the house. An insurance adjuster concluded that the house sustained only $50.00 in damage, but that the cost of a retaining wall and fill to support the dwelling was $19,000.00. The insurance carrier denied coverage contending its policy only insured the physical damage to the dwelling. The court rejected this argument and found the appellant insurance carrier liable for the entire loss to the use of the property. The court stated:
To accept appellant’s interpretation of its policy would be to conclude that a building which has been overturned or which has been placed in such a position as to overhang a steep cliff has not been “damaged” so long as its paint remains intact and its *493 walls still adhere to one another. Despite the fact that a “dwelling building” might be rendered completely useless to its owners, appellant would deny that any loss or damage had occurred unless some tangible injury to the physical structure itself could be detected. Common sense requires that a policy should not be so interpreted in the absence of a provision specifically limiting coverage in this manner. Respondents correctly point out that a “dwelling” or “dwelling building” connotes a place fit for occupancy, a safe place in which to dwell or live. It goes without question that respondents’ “dwelling building” suffered real and severe damage when the soil beneath it slid away and left it overhanging a 30-foot cliff. Until such damage was repaired and the land beneath the building stabilized, the structure could scarcely be considered a “dwelling building” in the sense that rational persons would be content to reside there.
We believe similar reasoning is applicable to the case at hand. The policies in question provide coverage against “sudden and accidental loss” and “accidental direct physical loss” to property. “‘Direct physical loss’ provisions require only that a covered property be injured, not destroyed. Direct physical loss also may exist in the absence of structural damage to the insured property.”
Sentinel Management Co. v. New Hampshire Ins. Co.,
The properties insured by Allstate and State Farm in this case were homes, buildings normally thought of as a safe place in which to dwell or live. It seems undisputed from the record that on February 22,1994 all three of the plaintiffs’ homes became unsafe for habitation, and therefore suffered real damage when it became clear that rocks and boulders could come crashing down at any time. The record suggests that until the highwall on defendant Harris’ property is stabilized, the plaintiffs’ houses could scarcely be considered “homes” in the sense that rational persons would be content to reside there. 15
We therefore hold that an insurance policy provision providing coverage for a “sudden and accidental loss” or an “accidental direct physical loss” to insured property requires only that the property be damaged, not destroyed. Losses covered by the policy, including those rendering the insured property unusable or uninhabitable, may exist in the absence of structural damage to the insured property.
IV.
Conclusion
We reverse the circuit court’s summary judgment ruling that found as a matter of law that coverage existed under the Allstate and State Farm policies. Because we find substantial questions of material fact in the record concerning the existence of coverage, we remand the case for further proceedings to determine whether the plaintiffs sustained a loss, and whether that loss was proximately caused by the covered risk of third-party negligence, or proximately caused by the excluded natural events of a landslide or erosion.
Reversed and remanded.
Appendix A
Cases Construing Earth Movement Exclusions
A. Jurisdictions holding that earth movement exclusions are ambiguous, and limited in application only to naturally-occurring catastrophic events include:
Winters v. Charter Oak Fire Ins. Co.,
B. Jurisdictions that have concluded that earth movement exclusions are not ambigu'ous, and apply to absolve the insurance company from any liability under the policy regardless of the cause or type of earth movement, include:
State Farm Fire & Cas. Co. v. Bongen,
C. For additional sources,
see
B. Mattis,
Earthquake and Earth Movement Claims Under Allr-Risk Insurance Policies in the New Madrid Fault Zone,
21 Mem.St. U.L.Rev. 59 (1990); B. Mattis,
Earth Movement Claims Under All Risk Insurance: The Rules Have Changed in California,
31 Santa Clara L.Rev. 29 (1991).
See generally,
R. Brazener,
Property Insurance: Construction and Effect of Provision Excluding Loss Caused by Earth Movement or Earthquake,
Notes
. The March 2, 1994 report from engineer Eric G. Denemark to Mr. Rees stated:
Looking at the highwall from the Church Street end up to and past the Withrow's yard, there is evidence of other past rockfalls. We feel that this wall is inherently unstable and that these events will continue to occur over time. Immediately behind the Withrow home a large block is already wedged off the sandstone unit and sits, precariously and temporarily, on what is left of the underlying shale. This is an extremely dangerous situation that, in our opinion, places the Withrow home at immediate risk.
The situation behind your home has not advanced quite as far.... It is only a matter of time before it too will fail resulting in a rockfall similar to that which occurred last week.
Another factor perhaps worthy of consideration, is that, typically, small pieces of rock will "spall” off the wall sporadically but relatively continuously.... While the potential for structural damages is minimal, a relatively small fragment, grapefruit-size for example, can easily inflict a serious or fatal injury should it strike a person or animal. You may want to consider this when contemplating letting your children or pets play near the high-wall. We would consider anywhere in the backyard to be potentially dangerous.
. The Rees allege that after moving from their home they were unable to afford the mortgage payments. They were forced to convey the property back to the bank holding the deed of trust. The bank then moved the house and relocated it to another site.
As to the remaining houses, a letter from the City of Ripley Building inspector states that: Presently the houses are unsightly, unsafe, and are creating a health hazard. We are requesting they be torn down and removed from their location. We feel it would be unsafe to repair or rebuild either house at their present site. The city will not issue any building permit for rebuilding or repairing either house without first having the rockfall stabilizing and secured.
.Hobart M. King, an expert hired by the City of Ripley, stated in a letter to the mayor that:
Because the distinction between a rockfall and a landslide is sometimes important for insurance purposes, I made special effort to determine what had happened....
Mr. King discussed this distinction in his deposition testimony:
A. In a landslide, what you have is a mass [of] rock or soil that is sliding over an underlying surface. That sliding takes place across a plane. There is a plane or a surface of failure at the base of the moving material. When I was looking at what had happened in Spring Street, there was no surface of failure along which sliding occurred. Sandstone blocks had fallen from the higher elevation above that shale layer that I previously discussed was underneath the sandstone. So, those two reasons would be why I would call that a rockfall....
Q. Would you agree that a rockfall is a type of landslide?
A. No. Slide[s] take place over a surface of failure. A fall occurs when a piece of the earth has broken away and falls independently, no sliding involved.
. Allstate insured Mr. Withrow's home under a "Deluxe Homeowners Policy” which provided that Allstate would pay for any "sudden and accidental physical loss to the property described in the Dwelling Protection Coverage, except as limited or excluded by this policy.”
The State Farm Homeowners Policy (Special Form 3) provided to the Murrays and Rees indicates that the policy "insure[s] for accidental direct physical loss to the property described in Coverage A except as provided in SECTION 1— LOSSES NOT INSURED.”
. A provision in an insurance policy may be deemed to be ambiguous if courts in other jurisdictions have interpreted the provision in different ways. This rule is based on the understanding that "one cannot expect a mere layman to understand the meaning of a clause respecting the meaning of which fine judicial minds are at variance.” C. Marvel,
Division of Opinion Among Judges on Same Court or Among Other Courts or Jurisdictions Considering Same Question, as Evidence That Particular Clause of Insurance Policy is Ambiguous,
. While every insurance policy must be analyzed based upon its own language, numerous courts faced with analogous policy language have reached nearly identical conclusions. A clear majority of courts continue to find earth movement exclusions ambiguous, and limited in application only to naturally-occurring catastrophic events such as earthquakes. However, a few jurisdictions have concluded that earth movement exclusions are not ambiguous, and apply to absolve the insurance company from any liability under the policy regardless of the cause or type of earth movement.
A collection of these cases is found in Appendix A, attached to this opinion.
. As one court indicated, the efficient proximate cause rule is
"a
rule of construction because certain consequences follow from the terms of the contract and from a legal policy applicable to the situation. Insurers cannot circumvent the rule by redefining causation.”
Sunbreaker Condominium Association v. Travelers Ins. Co.,
.Courts use varying terms such as "proximate cause,” "efficient proximate cause,” "efficient cause,” "predominant cause” or "moving cause.” As one court grappling with the meaning of the efficient proximate cause doctrine noted,
Regardless of the name of the doctrine or number of adjectives within it, the law requires a decision as to what event will be held accountable as the cause of the loss.... Given the weight of authority, [and] the similarity if not identicalness of efficient proximate cause to proximate cause ... the Court finds that the predominating cause of the loss is the appropriate standard.
Pioneer Chlor Alkali Co., Inc., v. National Union Fire Ins. Co. of Pittsburgh, Pa.,
Although perhaps containing an unnecessary adjective, and not at all making the doctrine more clear, the Court will use the majority term "efficient proximate cause.” To invent a new term would only add to tire confusion in this legal nebula where case precedents filled with the legal jargon of efficient proximate cause offer little guidance in the doctrine's application and result.
Id., n. 6. We believe this reasoning is equally applicable to the instant case.
. By one commentator’s count, 34 jurisdictions (including West Virginia in
LaBris v. Western National Ins. Co.,
. A current revision to Appleman holds similarly:
Various problems occur where there is dual, concurring or intervening causation leading to the loss of claim for which coverage is sought. In such a situation, the reasonable expectations of the insured should be considered and upheld which usually means that coverage will be found.... [Tjhe court may utilize the rule that the efficient proximate cause rule permits a recovery under the policy where the loss occurs due to a loss from a covered peril which also sets into motion a chain of events occurring in an unbroken sequence culminating in damage from an excluded peril.
E.
. An example of the efficient proximate cause doctrine in action is
Frontis v. Milwaukee Ins. Co.,
The court in
Frontis
was asked to address whether the removal of the top two floors of the Frontis building was a "direct loss by fire” within the meaning of an insurance policy. The court concluded that the loss was covered, holding that a fire can be the proximate, dominant, active and efficient cause of a loss even if the fire starts outside the insured premises and never extends to them in the form of combustion.
Another example is
Brian Chuchua's Jeep, Inc. v. Farmers Ins. Group,
For other examples,
see Pioneer Chlor Alkali Co., Inc., v. National Union Fire Ins. Co. of Pittsburgh, Pa.,
. "Before the doctrine of reasonable expectations is applicable to an insurance contract, there must be an ambiguity regarding the terms of that contract.” Syllabus Point 2,
Robertson v. Fowler,
. Another commentator reviewing similar State Farm policy language stated:
This [lead-in] clause, applied at face value, would clearly negate coverage in case of a concurring excepted cause. The clause may clear up any ambiguities in the minds of insurance counsel, but whether it would do so for the insurance consumer is questionable. Indeed, whether such a clause would actually be read by the insurance consumer is questionable. The change should have little impact on the objectively reasonable expectations of the insurance consumer. If anything, the clause is more confusing to the layman than was the old "contributed to, or aggravated by” exception.
Many courts allow recovery when an excepted cause acts concurrently with a covered cause despite increasingly explicit exclusionary language. This trend seems likely to continue regardless of the insurance industry's persistent efforts to refine their policies. Courts appear to look at the exclusionary language only to determine which causes or events are covered and which are not, and pay little attention to surplus verbiage. This approach is most likely explained as a sub silentio application of the doctrine of reasonable expectations.
R. Fierce, Insurance Law — Concurrent Causation: Examination of Alternative Approaches, 1985 S.IU.U.L.J. 527, 538 (1986).
. We acknowledge that jurisdictions are in conflict over the effect of the State Farm lead-in clause in landslide cases. At least two jurisdictions hold the clause has no effect on limiting coverage: California
(Howell v. State Farm Fire & Cas. Co.,
We question the holdings of these latter jurisdictions, as they found the earth movement policy language to be unambiguous and clear, and suggested that the policyholder's reasonable expectations were more in line with being a "fervent hope usually engendered by loss.”
Millar,
While this rule may equitably be enforced with regard to a contract negotiated at arm's length between parties of reasonably equivalent bargaining power and signed by each, it would be unfair to apply the general rule in the case of the modern insurance contract. These policies are contracts of adhesion, offered on a take-it- or-leave-it basis, often sight unseen until the premium is paid and accepted, full of complicated, almost mystical, language. “It is generally recognized the insured will not read the detailed, cross-referenced, standardized, mass- *492 produced insurance form, nor understand it if he does.” C & J Fertilizer, Inc. v. Allied Mutual Insurance Co.,227 N.W.2d 169 , 174 (Iowa 1975); accord, 3 Corbin on Contracts § 559 (1960); Keeton, [Insurance Law Rights at Variance with Policy Provisions,] 83 Harv.L.Rev. [961] at 968 [1970]. The majority rule is that the insured is not presumed to know the contents of an adhesion-type insurance policy delivered to him, 7 Williston on Contracts § 906 B (1963), and we hereby adopt the majority view.
We therefore decline to follow these latter jurisdictions.
.
See, e.g., Sentinel Management Co. v. New Hampshire Ins. Co.,