Dagen v. Hastings Mut. Ins. Co.

• Decision Date: 14 March 1988
• Docket Number: Docket No. 93674
• Parties: Bette DAGEN, Plaintiff-Appellant, v. HASTINGS MUTUAL INSURANCE COMPANY, Defendant-Appellee, and Walter Warnke, Defendant.
• Court: Court of Appeal of Michigan — District of US

Page 111

420 N.W.2d 111

166 Mich.App. 225

Bette DAGEN, Plaintiff-Appellant, v. HASTINGS MUTUAL INSURANCE COMPANY, Defendant-Appellee, and Walter Warnke, Defendant.

Docket No. 93674.

Court of Appeals of Michigan.

Submitted June 23, 1987.

Decided Nov. 20, 1987.

Released for Publication March 14, 1988.

Persinger & Farmer, P.C. by Floyd M. Farmer, Jr., Holland, for plaintiff-appellant.

Before WAHLS, P.J., and MAHER and BOYLE, ^* JJ.

PER CURIAM.

Plaintiff appeals as of right from the August 1, 1986, order of the Ottawa Circuit Court granting summary disposition pursuant to MCR 2.116(C)(8) and (10) on plaintiff's claim for breach of contract and from the circuit court's June 12, 1986, order denying plaintiff's motion to amend her pleadings.

On December 18, 1983, Hastings Mutual issued a homeowner's insurance policy to plaintiff for the period of December 18, 1983, to December 18, 1984. Paragraph thirteen of the policy insured plaintiff's dwelling against the peril of

"Collapse of buildings or any part thereof, but collapse does not include cracking, shrinkage, bulging or expansion."

Plaintiff's home was built in 1970. In the summer of 1984, plaintiff hired a plumber to connect her home to the city water system. The plumbers told plaintiff that her house was ready to fall down. Plaintiff called her insurance agent, who recommended that the house be inspected by a residential contractor. Upon inspection, the contractor told plaintiff that her floor joists were badly rotted and the house was buckling on the outside.

Plaintiff's homeowner's policy was renewed on December 18, 1984. The renewed policy contained an amendatory endorsement ostensibly supplementing plaintiff's coverage to include "collapse" of her dwelling due to "hidden decay." However, the amendatory endorsement added exclusions for any loss to plaintiff's dwelling due to

"Faulty, inadequate or defective:

"a) planning, zoning, development, surveying, siting;

"b) design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction;

"c) materials used in repair, construction, renovation or remodeling; or

"d) maintenance;

"of part or all of any property whether on or off the residence premises."

Some time after the renewal of her policy, plaintiff made a claim with Hastings for the repairs on her home. Hastings denied the claim. It asserted that the home had a latent defect caused by the builder's failure to install vapor barriers beneath the crawl space. According to Hastings, the policy excluded coverage for latent defects and wet or dry rot. ¹ Hastings also asserted that the house had not "collapsed" and was therefore not covered under paragraph thirteen of the policy.

On May 13, 1985, plaintiff filed suit against Hastings. ² Plaintiff alleged, inter alia, that defendant had breached the contract of insurance by denying coverage under paragraph thirteen. ³ Defendant answered by denying that there had been a "collapse" within the meaning of paragraph thirteen of the policy. On March 24, 1986, Hastings moved for summary disposition pursuant to MCR 2.116(C)(8) and (10), alleging that plaintiff had failed to plead a collapse within the meaning of the policy and had failed to raise a genuine issue of material fact on the same issue.

Plaintiff responded with the deposition testimony of Louis Goodin. Goodin was an expert contractor who had inspected plaintiff's home in February of 1985. According to Goodin, the floors of plaintiff's home were severely sagging. The lower structural members of the home, including floor joists, mud sill, block sill, and rim joists, were very badly rotted. To a lesser extent, the subflooring itself was rotting. Goodin found some places in which the wood was so rotted that he could tear it away with his hands. In other places, the subflooring was actually holding up the joists, rather than the joists holding up the subflooring. Goodin concluded that the house had very significant structural defects and was unsound. As a result of the structural defects, the doors and windows of the house were not working properly. Goodin attributed the problem to wet rot caused by a high water table. He believed that the problem could have been alleviated by the installation of a moisture barrier and ventilation. Goodin estimated the cost of repairs at $13,990, but believed that unforeseen difficulties could add as much as $10,000 to that estimate.

The trial court held that Goodin's deposition failed to raise a genuine issue of material fact and that plaintiff had merely pled that her dwelling was "in danger of collapse." The trial court thereupon granted summary disposition pursuant to MCR 2.116(C)(8) and (10). Plaintiff later moved for reconsideration and, alternatively, for leave to amend her complaint to specifically plead a collapse of the dwelling. The trial court denied both motions, apparently reasoning that, even if plaintiff had properly pled a collapse of the dwelling, she had failed to establish a genuine issue of fact through the deposition of Goodin and that amendment of plaintiff's pleadings would therefore be futile.

On appeal, plaintiff argues that the deposition testimony of Goodin was sufficient to raise a factual issue regarding the collapse of her home and that the trial court erred by granting summary disposition pursuant to MCR 2.116(C)(10). Plaintiff does not contend that her pleadings were sufficient or that the trial court erred by initially granting summary disposition pursuant to MCR 2.116(C)(8). However, plaintiff does argue that an amendment of her pleadings specifically alleging collapse would not have been futile and that the trial court therefore erred by denying her motion for leave to file an amended complaint.

Our standard of review on motions for summary disposition pursuant to MCR 2.116(C)(10) is well-established:

"Summary judgment pursuant to GCR 1963, 117.2(3), now MCR 2.116(C)(10), is proper only if there is no genuine issue as to any material fact and the party in whose favor judgment is granted is entitled to judgment as a matter of law. A motion based on GCR 1963, 117.2(3) is designed to test the factual support for a claim. Maccabees Mutual Life Ins Co v Dep't of Treasury, 122 Mich App 660, 663; 332 N.W.2d 561 (1983), lv den 417 Mich 1100.15 (1983). The court must consider the pleadings, affidavits, and other available evidence and be satisfied that the claim or position asserted cannot be supported by evidence at trial because of some deficiency which cannot be overcome. Id. The court must give the benefit of any reasonable doubt to the party opposing the motion and inferences are to be drawn in favor of that party. Id." Hagerl v. Auto Club Group Ins. Co., 157 Mich.App. 684, 686-687, 403 N.W.2d 197 (1987).

In Vormelker v. Oleksinski, 40 Mich.App. 618, 199 N.W.2d 287 (1972), lv. den. 388 Mich. 791 (1972), the plaintiffs also sought to recover under a homeowner's insurance policy for the collapse of their home. The word "collapse" was apparently not defined in the insurance policy and the trial court instructed the jury that

"Collapse, as used in this policy, means a sinking, bulging, cracking, pulling away of the wall so as to impair its function of supporting the superstructure and destroying its efficiency as a habitation." Vormelker, supra, at...