Gullett v. St. Paul Fire and Marine Insurance Company

• Decision Date: 16 July 1971
• Docket Number: No. 18658.,18658.
• Citation: 446 F.2d 1100
• Parties: James G. GULLETT and Ben Taylor, Plaintiffs-Appellees, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

446 F.2d 1100 (1971)

James G. GULLETT and Ben Taylor, Plaintiffs-Appellees, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant-Appellant.

No. 18658.

United States Court of Appeals, Seventh Circuit.

July 16, 1971.

J. C. Mitchell and W. A. Armstrong, Marion, Ill., for defendant-appellant.

Richard G. Lambert, Harris & Lambert, Marion, Ill., for plaintiffs-appellees.

Before KILEY and CUMMINGS, Circuit Judges, and CAMPBELL, Senior District Judge.¹

KILEY, Circuit Judge.

This is a diversity suit to recover for damage to plaintiffs' building insured against loss by defendant insurance company. Judgment for $15,000 was entered on the jury's verdict² and defendant has appealed. We affirm.

Plaintiffs' brick veneer and concrete building in Elizabethtown, Hardin County, Illinois, was occupied by a United States Post Office. About three feet slightly "up" from the north side of the building and running parallel to it was an eighty-two year old retaining wall made of "large rocks or boulders." It was approximately seventy-eight feet long, two and a half feet thick, and twelve feet high. Behind this wall to the north and abutting against it was an embankment of earth level on top and about the same height as the wall. On January 29, 1969, around 11:15 p. m., rocks from portions of the wall crashed into the building causing serious damage.

The vital jury question was whether the damage to the building was caused by "falling objects" or "collapse of building" and thus covered by the terms of a rider to the policy;³ or whether it was caused by a "landslide or any other earth movement" and excluded from coverage.⁴ On defendant's motion, the court submitted a special verdict asking the jury to decide these questions.⁵ The jury answered that the damage was caused by falling objects or collapse of building; that it was not caused or aggravated by, was not contributed to, and did not result from a landslide or any other earth movement; and returned its verdict for plaintiff.

I.

Defendant moved at trial for directed verdict at the close of plaintiffs' evidence, and again at the close of all the evidence. The court denied the motions and also denied defendant's subsequent motion for judgment notwithstanding the special verdict. The defendant contends that the rulings were erroneous and argues that the only reasonable inference from the evidence is that the loss was caused by a landslide moved by surface or underground water and accordingly excluded under the policy. We disagree.

The Circuits are in conflict as to whether a state or a federal standard applies to test rulings on motions for directed verdicts or judgments notwithstanding verdicts in diversity cases.⁶ The disagreement stems from the substance-procedural dichotomy of Erie R. R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938).

This court has traditionally applied the state standard. Wieloch v. Rogers Cartage Co., 290 F.2d 235, 237-38 (7th Cir. 1961). That policy was reaffirmed several months ago in Illinois State Trust Company v. Terminal R. R. Assoc., 440 F.2d 497 (1971). Illinois substantive law controls this action, and the pertinent law was changed in 1967 in Pedrick v. Peoria & E. R. R., 37 Ill.2d 494, 229 N.E.2d 504 (1967), where the court stated:

* * * verdicts ought to be directed and judgments n. o. v. entered only in those cases in which all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand.

37 Ill.2d at 510, 229 N.E.2d at 513-14.

Thus, under the current Illinois rule⁷ the district court's denial of appellant's motions was correct unless upon all of the evidence viewed in its aspect most favorable to the plaintiffs the testimony favoring the defendant is so overwhelmingly against plaintiffs that a verdict for them cannot stand. The crucial fact question at trial was whether the rocks fell first from disintegration of mortar and pressure of the earth and the earth then pushed the rocks, or whether the earth, moved by rain water, forced the wall to collapse and the collapse caused the rocks to crash onto the building.

The record contains non-expert testimony that the rock wall was somewhat above plaintiffs' building; that there was an "above normal" rainfall two or three days before the event with "considerable" water issuing between the rocks in the wall; that there was about a six inch bulge in the center of the length of the wall starting halfway up and going to the top; that plaintiffs had spoken to defendant's representative Rutherford about their fear of "the wall falling on us" and the response was that the rider would be added to the policy to "take care of it if the wall fell;" and that portions of the wall fell on the building.

There is no substantial contrariety in the expert testimony for both parties about the condition of the rock wall. Examination of the eighty-two year old rock retaining wall, after the event, showed the wall had weakened; the mortar sealing the large rocks had deteriorated in the "area that failed;" there were openings between rocks especially at the top where the mortar was "in pretty bad shape * * * washed out * * * and in some places * * * patched * * * on the outside with plaster." The wall had "very little strength;" all that held the rocks in place was their own weight, and it would not, in an engineering sense, qualify as a retaining wall.

Defendant argues that the overwhelming evidence is that "surface water" played some part in causing the wall to fall. There is testimony that rain water in the street a block below plaintiffs' building was about a foot deep; that the two or three day rainfall was "above normal;" that the earth behind the wall was wet and damp; and that the rain added weight against the wall. In light of the ejusdem generis rule,⁸ we do not consider this testimony as proof of "surface water," as that term is used in exclusion (2). Furthermore, with respect to "water underground" in exclusion (4), the testimony relied on by defendant is largely from answers to abstract or hypothetical questions. No expert had seen the earth during or immediately after the event.

The uncontroverted testimony as to the movement of the earth literally falls within the last term of exclusion (1): "earthquake, volcanic eruption, landslide or other earth movement." (Emphasis added.) The ejusdem generis rule, however, limits that general term to the prior types of earth movement specified in that exclusion.

We conclude there is no merit in defendant's contention that it was entitled to a directed verdict or judgment notwithstanding the verdict. In our opinion the jury could well find that what probably happened to the earth in this case was not a "landslide" within the exclusion; it could have concluded that neither a "landslide" nor "surface water" nor "water underground" contributed to or caused the loss, if it believed plaintiffs' experts that the weakened wall "caved" in from normal deterioration, prior to the earth moving. Surely what occurred is a mini-earth movement compared to the Los Angeles "landslide" described by the court in Gen. Ins. Co. of America v. Lapidus, 325 F.2d 287 (9th Cir. 1963). No expert witness in testifying referred directly to the probable movement of the earth as a "landslide." Defendant's expert estimated that there were forty thousand pounds of earth inside the rock wall. But there is no testimony that the estimated forty thousand pounds of earth moved against the wall.

The Lapidus decision does not compel a decision here that the occurrence was a "landslide." There is a difference between a movement of earth on the side of the Los Angeles hill in Lapidus and the movement of the earth here. The evidence justified a jury inference that the weakened wall collapsed through normal deterioration and the falling rocks then crashed into the building causing the damage. This inference would support the special verdict.

II.

A. We see no merit either in the contention that the court erred in denying defendant's alternative motion for new trial. The only difference between the experts is in their opinions on the crucial concrete factual question.⁹ One of plaintiffs' experts gave his opinion that the "topmost part of the wall" had started to fall due to the deterioration of the mortar; and that the natural pressure of the earth on the wall caused the rocks to break loose and this "caved the wall in." Another of plaintiffs' experts stated his opinion was that first the wall had given way, had fallen over into the building, and some dirt had moved down behind the building; and that the rain had added weight against the deteriorated wall causing it to fall. Defendant's expert's opinion was that the rain reduced the earth to a somewhat fluid state and exerted a "hydrostatic force" which caused the wall to fall allowing the rocks to crash into plaintiffs' building.

The essential difference in the expert testimony is that in the view of plaintiffs' experts the wall first gave way and this permitted the earth to push the rocks onto the building; whereas in the view of defendant's expert the force of the "fluid" earth first pushed the wall away and then pushed the rocks onto the roof. Defendant's expert said the earth and wall had been there in repose for...