The Washington Supreme Court reversed the Court of Appeals' decision that the ensuing loss provision provided coverage for a deck that collapsed due to rot and decay. Sprague v. Safeco Ins. Co. of Am., 2012 Wash. LEXIS 375 (Wash. May 17, 2012). Our prior post on the Court of Appeals' decision is here.
The Sprague's home had a deck supported by six "fin walls." The fin walls were encased in a foam and stucco coating. Twenty years after they purchased the home, it was discovered that the fin walls were in an advanced state of decay. Engineers discovered that construction defects caused the supports to rot. The deck was in danger of imminent collapse.
Safeco denied coverage. The all-risk policy did not exclude collapse, but did exclude coverage for losses causes by mold, wet or dry rot. An ensuing loss provision provided an exception for "any ensuing loss not excluded." Building defects, including defective design, construction or materials, were also excluded. There was also an ensuing loss provision for these losses.
The trial court granted summary judgment to Safeco. The Court of Appeals reversed, concluding that the decks had collapsed and that collapse was not an excluded loss due to the ensuing loss provision.
The Washington Supreme Court reversed. Whether or not the deck had reached a state of collapse, its condition was the result of the excluded perils of defective workmanship and rot, and did not constitute a separate loss apart from those perils. A "collapse," whether consisting of a loss of structural integrity or a plunge to the earth, was the end result of the deterioration that constituted "rot." The collapse was not a new and different peril. If there had been losses other than to the fin walls such as an injury to a person hurt by the collapse or property damaged by the deck failure, coverage would have existed under the ensuing loss provisions.
