The court denied the insurer's motion for summary judgment on whether the policy covered the collapse of basement walls based upon factual issues presented. Sirois v. USAA Cas. Ins. Co., 2018 U.S. Dist. LEXIS 158508 (D. Conn. Sept. 18, 2018).
The insureds' purchased their home in 2010. In December 2015, a crack in the basement wall was noticed. It was not thought to be a serious problem. But in 2016, the insured read an article about defective concrete problems affecting homeowners in Connecticut. An inspector, Dean Soucy, was hired. He found faults and cracks in the foundation walls. Thereafter, a claim was submitted to USAA under homeowners' policies issued over the years to the insureds. USAA denied coverage.
The insureds sued, alleging that the basement walls had collapsed as defined in the policies. USAA moved for summary judgment. The court determined there were issues of fact concerning whether the claimed losses fell within the coverage of policies issued from 2010 to 2014 and policies issued from 2014 to 2016.
Under the pre-2014 policies, "collapse" was defined as "a sudden falling or caving in" or " a sudden breaking apart or deformation such that the building . . . is in imminent peril of falling or caving in and is not fit for its intended use." The policy further stated that "[d]amage consisting solely of settling, cracking, shrinking, bulging or expansion is not covered . . . unless it is the direct result of collapse." The insureds contended that damage to their home constituted a "caving in." A dictionary definition defined "cave in" as "yield" or to "submit to pressure." USAA contested the definition, claiming the insureds' definition referred to a colloquial definition of "cave in." The court found the term "caving in" was ambiguous because both parties' interpretations were reasonable.
Under the post-2014 policies, the definition of "collapse" was the same. Therefore, the term "caving in" was ambiguous here as well. The policies' exclusions differed, however, stating that there was no coverage for loss caused by "settling, cracking, shrinking, bulging or expansion of . . foundations, walls . . ." Consequently, this phrase was moved from the definition of "collapse" to the policies' exclusions. If this exclusion were interpreted to prelude coverage for all damage consisting or resulting from cracking, shrinking, and bulging, it would contradict the "collapse" provision. For example, if cracking caused a "falling in," it would constitute a covered "collapse" under the policy. but fall within the exclusion noted above.
Therefore, the evidence in the record showed that the insureds' losses could fall within their proposed definition of "caving in." The Insured's expert repeatedly described the damage to the home in terms of the submission to pressure and yielding of the concrete and the walls generally. The expert also described the damage as a "substantial impairment to the structural integrity" of the property. The expert distinguished between homes with mere "cracking" damage and those where the cracking had caused a "substantial impairment to the structural integrity" of the property. He noted that, for example, a property containing only a small area of cracking did not contain a "substantial impairment." This further underscored that fact that there could be "cracking" that did not rise to the level of collapse under the policy.
Consequently, there was a genuine dispute of material fact regarding whether the home was subject to a "caving in" that fell within the "collapse" coverage in the policies.