Grebow v. Mercury Ins. Co.
| Citation | 194 Cal.Rptr.3d 259,241 Cal.App.4th 564 |
| Decision Date | 21 October 2015 |
| Docket Number | B261172 |
| Court | California Court of Appeals |
| Parties | Arthur GREBOW et al., Plaintiffs and Appellants, v. MERCURY INSURANCE COMPANY, Defendant and Respondent. |
241 Cal.App.4th 564
194 Cal.Rptr.3d 259
Arthur GREBOW et al., Plaintiffs and Appellants,
v.
MERCURY INSURANCE COMPANY, Defendant and Respondent.
B261172
Court of Appeal, Second District, Division 5, California.
Filed October 21, 2015
As Modified on Denial of Rehearing October 26, 2015
Grebow & Rubin, Arthur Grebowfor Plaintiffs and Appellants.
Hager & Dowling, John V. Hager, Christine W. Chambers, Santa Barbara, for Defendant and Respondent.
MOSK, J.
INTRODUCTION
Plaintiffs and appellants Arthur and Helen Grebow (the Grebows) appeal from a summary judgment in favor of defendant and respondent Mercury Insurance Company (Mercury) for causes of action for breach of contract and tortious breach of insurance contract. The Grebows experienced significant damage to their rear deck and supporting structure of their residence. Their general contractor and structural engineer advised them that the rear of the residence was in the process of falling to the ground and strongly advised them not to enter the second story of the house until they repaired the damage. The Grebows spent over $91,000 on such repairs. They then made a claim for reimbursement of that amount against Mercury, their homeowner's insurer, because at least a portion of the house had collapsed and because the expenditure was to avoid imminent insurable damage and to mitigate damages. Mercury contended that the Grebows' claim under their homeowner's insurance policy was not covered because the damage to their property did not constitute a “collapse” as defined by the policy. The definition of a collapse is a “sudden and complete breaking down or falling in or crumbling into pieces or into a heap of rubble or into a flattened mess.”
Mercury also argued that it had no obligation to reimburse for expenditures to avoid an insurable loss and there was no mitigation as that term is used in the policy.
The trial court granted a motion for summary judgment in favor of Mercury and denied the Grebows's motion for summary adjudication.1The Grebows filed a timely appeal. We hold that Mercury is not liable for the reimbursement costs because there was not a collapse as defined in the policy, the duty to mitigate arises only after a loss from a collapse, and Mercury had no duty, express or implied, to reimburse the Grebows for costs to prevent imminent insurable damage.
STATEMENT OF THE FACTS 2
The Grebows owned a residence located in Tarzana, California (the property). In February 2002, they purchased a Superior Property Homeowners Policy (the policy) from Mercury that provided coverage for the property. The policy limits were $1,466,000, with a $2,500 deductible.
In May 2013, the Grebows asked a general contractor to inspect the rear deck of the house because of recurring watermarks. The contractor discovered severe decay in the steel beams, which, with steel poles, supported the second floor of the house. He reported that the supporting beams and poles could not support the upper portion of the house, and that a large portion of the house would fall.
A structural engineer inspected the property and agreed with the general contractor's assessment. The engineer believed the failure of the poles and beams was caused by decay and corrosion, which were concealed by the deck floor and patio ceiling. Because of the corrosion, the upper portion of the house was in danger of falling and the Grebows were advised not to enter the top portion of their house until repair work was done. On May 17, 2013, the Grebows authorized the purchase of material for shoring and had it installed the next day. On May 28, 2013, the Grebows entered into a construction contract. On June 19, 2014, they orally notified Mercury of their claim for reimbursement of their repair expenses, and on June 20, 2013, sent a written claim for the reimbursement. Mercury responded that it would investigate, and on October 22, 2013, it denied the claim. The Grebows spent $91,000 to have the home remediated.
The relevant policy provisions are as follows:
“SECTION I—PERILS ISSUED AGAINST AND EXCLUDED PROPERTY
We insure for direct physical loss to property....
“SECTION I—EXCLUSIONS
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....
“4. Neglect, meaning our failure to use all reasonable means to save and preserve property at and after the time of the loss.
“13. Corrosion or Electrolysis....
“17. Loss caused by:
“a. wear and tear, marring, scratching, deterioration;
“b. inherent vice, latent defect, mechanical breakdown;
“c. rust....”
“SECTION I—OTHER COVERAGES
“7. Collapse. We insure for direct physical loss to covered property caused by collapse of a building or any part of a building caused only by one or more of the following perils:
“a. Perils Insured Against under Coverage C [Personal Property];
“b. hidden decay;
“c. hidden insect or vermin damage;
“d. weight of contents, equipment, animals or people;
“e. weight of ice, snow, sleet or rain which collects on a roof; or
“f. use of defective material or methods in constructions, remodeling, or renovation if the collapse occurs during the course of the constructions, remodeling or renovation.
Loss to an awning, fence, patio, pavement, swimming pool, tennis court, underground pipe, flue, drain, cesspool, septic tank, foundation, retaining wall, bulkhead, pier, wharf or dock is not included under items b., c., d., e., and f. unless the loss is a direct result of the collapse of a building.
Collapse means sudden and complete breaking down or falling in or crumbling into pieces or into a heap of rubble or into a flattened mass. Collapse does not include settling, cracking, shrinking, bulging, expansion, sagging or bowing, nor a substantial impairment of the structural integrity of a structure or building, nor a condition of imminent danger of collapse of a structure or building.”
The policy imposed the following relevant conditions:
“SECTION I—CONDITIONS
“2. Your Duties After Loss. In case of a loss to which this insurance may apply, you must perform the following duties:
“a. give prompt notice to us or our representative;
“c. protect the property from further damage;
“d. prepare an inventory of the loss to the building and damaged personal property showing the quantity, description and amount of loss. Attach all bills, receipts and related documents that jury the figures in the inventory....”
In November 2013, the Grebows filed an action against Mercury. They alleged causes of action for breach of contract and tortious breach of insurance contract. The Grebows filed a motion for summary adjudication on the coverage issue. Mercury filed a motion for summary judgment on the ground that as a matter of law there was no coverage for the Grebows's claim and thus it had no obligation to reimburse the Grebows for the Grebows's expenses. The trial court denied the Grebows's motion for summary adjudication and granted Mercury's summary judgment motion. There is no indication that evidentiary objections were ruled upon, and no party refers to evidentiary objections as being an issue on appeal. The trial court denied the Grebows's motion for new trial. The Grebows filed a timely notice of appeal, appealing the denial of their motion for summary adjudication, the granting of
Mercury's summary judgment, and the denial of the Grebows's motion for new trial.
DISCUSSION
A. Standard of Review, Rules of...
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