Beach v. Middlesex Mut. Assur. Co.
| Decision Date | 10 November 1987 |
| Docket Number | No. 13130,13130 |
| Citation | 205 Conn. 246,532 A.2d 1297 |
| Parties | Carter L. BEACH et al. v. MIDDLESEX MUTUAL ASSURANCE COMPANY. |
| Court | Connecticut Supreme Court |
Thomas W. Witherington, for the appellant (defendant).
William G. Rhines, Wells, for the appellees (plaintiffs).
Before PETERS, C.J., and SHEA, CALLAHAN, COVELLO and HULL, JJ.
The principal issue in this appeal is whether there is latent ambiguity in the term "collapse" in a homeowner insurance policy. The plaintiffs, Carter Beach and Mary Lawton Beach, filed a complaint seeking damages from the defendant, Middlesex Mutual Assurance Company, for an alleged "collapse" within the terms of the insurance policy issued to them by the defendant. The defendant denied that a collapse had occurred, claiming instead that the damage to the plaintiffs' home was due solely to the "settlement of earth movements," a type of loss excluded under the policy.
An attorney state trial referee, after a hearing, recommended judgment for the plaintiffs in the amount of $26,607.31. The trial court adopted that recommendation and accordingly rendered judgment for the plaintiffs. The defendant's appeal challenges both the construction of its insurance policy and the calculation of damages. We find error in part on the latter issue.
The uncontested findings of the trial referee reveal the following facts. The plaintiffs, Carter and Mary Lawton Beach, own a home located on a steep slope next to Candlewood Lake in New Milford. On a visit to the property in February, 1976, Carter Beach noticed a crack in the north foundation wall of the building. In response to timely notification of a claim of an insured loss, the defendant insurer promptly sent its claims adjuster, Robert Keaney, to inspect the crack and the ensuing damages. The adjuster noted not only the crack but also a separation between the top of the foundation wall and the "plate" or bottom of the building wall. By letter dated March 17, 1976, the adjuster advised the plaintiffs that the insurance company had denied coverage for their claim "due to the fact [that] settlement was the cause of the damage." The insurance contract expressly excluded coverage for damages arising from "settling, cracking, shrinkage, bulging or expansion." 1
The crack in the north foundation wall continued to widen, and by May of 1976 had reached a width of approximately nine inches. In addition, wooden support beams on top of the foundation wall had pulled apart and the concrete floor of the patio adjacent to the north side of the house had cracked and fallen in. Concerned over this deteriorating state of affairs, Carter Beach requested a site visit by the defendant's engineer, but was told that coverage would still be denied because no "collapse" of his home had occurred.
In July of 1976, the plaintiffs began to arrange for reconstruction of their home. A building contractor, Kenneth Lathrop, viewed the premises and later testified that the foundation wall had tipped over into the basement from the top and was no longer supporting the house. Because the house never actually caved in, the plaintiffs continued in occupancy during the period in which Lathrop undertook the needed structural repairs. Despite the nonoccurrence of a sudden catastrophe, the trial referee heard and found credible the testimony of a number of witnesses that the house would have caved in had the plaintiffs not acted to repair the damage. The trial referee expressly found that "[g]iven the state of the structure, eventually the house would have fallen into the cellar." The referee went on to conclude that "the foundation in the Plaintiffs' house cracked; that the foundation failed structurally, and that the function of the foundation, both as a support structure for the house and a retaining wall, had become materially impaired, constituting a collapse."
The trial court rendered judgment in accordance with the report of the trial referee. The court articulated its reasons as follows: "It [the referee's report] was accepted because we found it to be sound, comprehensive and logical both factually and legally, including the recommendations: (i) that a 'collapse' in the sense of a material impairment of the basic structure of a building was included within the coverage of the insurance policy involved in this action; and (ii) that the structure in question was in imminent danger of falling over, both of which are adopted by the undersigned."
The defendant claims that the trial court erred in: (1) defining a "collapse" within the policy to mean a "material impairment of the basic structure of a building"; and (2) calculating damages to include the cost of replacing the plaintiffs' septic tank system and the cost of various "preventive" measures undertaken by the building contractor. We find error in part on the latter issue.
The defendant first urges us to find error in the trial court's construction of the term "collapse" in the insurance policy. If the language of the policy is clear and unambiguous, its terms will be given their ordinary and natural meaning. Horak v. Middlesex Mutual Assurance Co., 181 Conn. 614, 616, 436 A.2d 783 (1980); Weingarten v. Allstate Ins. Co., 169 Conn. 502, 509-10, 363 A.2d 1055 (1975). If, to the contrary, insurance coverage is defined in terms that are ambiguous, such ambiguity is, in accordance with standard rules of construction, resolved against the insurance company. "Where the terms of the policy are of doubtful meaning, the construction most favorable to the insured will be adopted." LaBonte v. Federal Mutual Ins. Co., 159 Conn. 252, 256, 268 A.2d 663 (1970); see also Griswold v. Union Labor Life Ins. Co., 186 Conn. 507, 514, 442 A.2d 920 (1982); Simses v. North American Co. for Life & Health Ins., 175 Conn. 77, 84-85, 394 A.2d 710 (1978). The defendant conceded, at oral argument, that if its policy contains a relevant ambiguity, it cannot hope to overturn the trial court's conclusion assigning it liability for the plaintiffs' structural damage.
The precise language that we must construe is as follows: "This policy does not insure against loss ... [u]nder Coverages A and B ... 1. by ... settling, cracking, shrinkage, bulging or expansion of pavements, patios, foundations, walls, floors, roofs or ceilings ... unless ... collapse of a building ... not otherwise excluded ensues, then this policy shall cover only such ensuing loss." In the defendant's view, the term "collapse" in this policy unambiguously contemplates a sudden and complete falling in of a structure. This argument comes to us in two versions, neither of which we find persuasive.
First, the defendant claims that the standard dictionary definition of "collapse" on its face unambiguously connotes a sudden and complete catastrophe. A "collapse" is there defined as "a breakdown in vital energy, strength, or stamina: complete sudden enervation: sudden loss of accustomed abilities ... an abnormal falling together of the walls of an organ...." Webster, Third New International Dictionary. This definition does not definitively support the defendant's narrow reading. Although "collapse" encompasses a catastrophic breakdown, as the defendant argues, it also includes a breakdown or loss of structural strength, as the plaintiffs maintain. If the defendant wished to rely on a single facial meaning of the term "collapse" as used in its policy, it had the opportunity expressly to define the term to provide for the limited usage it now claims to have intended. See, e.g., Nida v. State Farm Fire & Casualty Co., 454 So.2d 328, 334 (La.App.1984). As presently drafted, "collapse" is not on its face unambiguous.
Second, the defendant claims that its interpretation unambiguously finds support in the policy as a whole. A narrow interpretation, it argues, is the only one consistent with the terms of the clause excluding liability for loss by "settling, cracking, shrinkage, bulging or expansion." According to the defendant, the terms of the exclusionary clause modify and inform the meaning of "collapse" and necessarily narrow the purview of "collapse" to casualty of a sudden and cataclysmic nature. While we agree that the defendant's reading of the relationship between the terms of the exclusionary clause and the meaning of "collapse" is a plausible one, an alternate reading is equally reasonable, and that is sufficient to defeat the defendant's claim of error. As the plaintiffs contend, the policy may reasonably be read to exclude loss related to "settling, cracking, shrinkage, bulging or expansion," only so long as "collapse" does not ensue. Nowhere does the policy express a clear unambiguous intent to exclude coverage for a catastrophe that subsequently develops out of a loss that appeared, at its inception, to fall within the rubric of "settling, cracking, shrinkage, bulging or expansion." On the contrary, the disputed policy provision covers a loss for "collapse" which, not otherwise being excluded, "ensues." To "ensue" means "to follow as a chance, likely, or necessary consequence: result ... to follow in chronological succession." Webster, Third New International Dictionary. By its reference to a "collapse" that "ensues," the policy in this case can reasonably be understood to have contemplated coverage for a "collapse" that follows consequentially from excluded activity. Read in its entirety,...
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