Morton v. Great Am. Ins. Co.

• Citation: 1966 NMSC 206,419 P.2d 239,77 N.M. 35
• Decision Date: 10 October 1966
• Docket Number: No. 7820,7820
• Parties: Craig MORTON, Jr., and Anne L. Morton, his wife, Plaintiffs-Appellees, v. GREAT AMERICAN INSURANCE COMPANY, a corporation, Defendant-Appellant.
• Court: Supreme Court of New Mexico

Page 239

419 P.2d 239

77 N.M. 35

Craig MORTON, Jr., and Anne L. Morton, his wife, Plaintiffs-Appellees, v. GREAT AMERICAN INSURANCE COMPANY, a corporation, Defendant-Appellant.

No. 7820.

Supreme Court of New Mexico.

Oct. 10, 1966.

Toulouse, Ruud, Gallagher & Walters, Albuquerque, for appellant

Richard C. Losh, Albuquerque, for appellee.

OPINION

NOBLE, Justice.

Great American Insurance Company (hereafter referred to as Insurance Company) has appealed from a judgment against it and in favor of Craig Morton, its insured, arising under its policy of insurance covering the 'collapse of building(s) or any part thereof, * * *.'

Briefly, the court found that a structural engineer, upon inspection, determined that one pier supporting the first floor of the Morton house had tilted about ten degrees from vertical; that three other piers had tilted to some degree from vertical; that by reason thereof part of the first floor settled about one and one-half inches; that the first floor ceiling had settled some; that wide cracks occurred in the walls; and that there was a collapse of a part of the building, requiring repairs and certain reconstruction of footings and piers. Specifically, the court found:

'10. That plaintiffs' house sustained a collapse or (of) part of his house within the meaning of the terms of his policy of insurance with the defendant, and that the repairs made were necessary to correct the collapse of part of his house and to avoid the damage becoming greater in the future.

'11. That the tilting of the piers, settling, or subsidence of the floors, ceilings, walls and cracking of the walls and ceiling materially impaired the basic structure or substantial integrity of the building.

'12. That the failure and collapse of a part of plaintiffs' house was of such an extent that its condition created an unsafe and dangerous situation with the possibility of further extensive damage to said dwelling.'

A single point is relied upon by the Insurance Company for reversal:

'The condition of appellees' house was not, as a matter of law, a 'collapse' so as to be a condition covered under the policy issued by defendant, and it was error for the trial court to accept interchangeable engineering terms as a basis for finding collapse and awarding judgment thereon.'

None of the court's findings are challenged as lacking support in the evidence and, accordingly, are the facts upon which the case rests in this court on appeal. Nash v. Higgins, 75 N.M. 206, 402 P.2d 945; Brown v. Arapahoe Drilling Company, 70 N.M. 99, 370 P.2d 816.

The clause in this policy is one providing for coverage rather than exclusion of a loss caused by collapse of a building or a part thereof. The interpretation of this clause is one of first impression in New Mexico and is a subject upon which there is little authority. 72 A.L.R.2d 1287. Further, the few decisions interpreting the clause are not in accord. The question, of course, is whether the facts found by the trial court evidenced a 'collapse' within the meaning of the policy.

The Insurance Company relying heavily upon Central Mutual Ins. Co. v. Royal, 269 Ala. 372, 113 So.2d 680, 72 A.L.R.2d 1283, appears to argue that to be included within this coverage the insured structure must lose its distinctive character as a building. The Alabama court held the insurer could not recover because '(t)here was no falling in, no loss of shape, no reduction to flattened form or rubble of the building or any part thereof.' At the time of this decision in 1959, Nugent v. General Ins. Co. of America, 253 F.2d 800 (8th Cir. 1958), was the only case having construed such a policy provision. Gage v. Union Mut. Fire Ins. Co., 122 Vt. 246, 169 A.2d 29, appears to have followed Central Mut. Ins. Co. upon the reasoning that the collapse clause is unambiguous and susceptible to only this one interpretation.

The Supreme Court of Kansas, however, considered an identical clause in determining whether the insured could recover for an alleged settling, cracking and breaking of the wall or walls, of the basement of a dwelling in Jenkins v. United States Fire Ins. Co., 185 Kan. 665, 347 P.2d 417. In that case, no one contended that the basement walls had fallen, but there was evidence of a crack running lengthwise almost all the way around the basement and evidence that the north wall had settled, cracked and bulged so as to create an unsafe and dangerous situation with a possibility of its caving or falling in. The ...