Nida v. State Farm Fire & Cas. Co.

• Decision Date: 17 July 1984
• Docket Number: No. 83-765,83-765
• Citation: 454 So.2d 328
• Court: Court of Appeal of Louisiana — District of US
• Parties: Robert G. NIDA, Plaintiff-Appellant, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant-Appellee.

Page 328

454 So.2d 328

Robert G. NIDA, Plaintiff-Appellant, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant-Appellee.

No. 83-765.

Court of Appeal of Louisiana Third Circuit.

July 17, 1984.

Robert G. Nida, pro se.

Dee D. Drell of Gold, Little, Simon, Wiems & Bruser, Alexandria, for plaintiff-appellant.

Gist, Methvin, Hughes & Munsterman, DeWitt T. Methvin, Jr., Alexandria, for defendant-appellee.

Before CUTRER, DOUCET and YELVERTON, JJ.

DOUCET, Judge.

The issue presented in this appeal is whether plaintiff's insurance covered damage to his home caused by the condition of the soil beneath the foundation where the policy issued by defendant insurance company insured against loss caused by "collapse" but excluded losses resulting directly or indirectly from "earth movement". From an adverse judgment, plaintiff appeals.

The trial judge assigned written reasons for judgment which we incorporate hereinbelow:

"This is a suit for benefits under a homeowner's insurance policy. The plaintiff, Robert G. Nida, is the owner of the home in question. The defendant, State Farm Fire and Casualty Company, is the homeowner's insurer. The stipulated facts show that the concrete slab foundation of plaintiff's home cracked due to movement up and down of the earth underneath. The earth movement was caused by the shrinkage during dry weather and the expansion during wet weather of the "Moreland Clay" soil on which the house was built. Plaintiff contends the damage to his home, which consists of the cracked foundation, cracking of exterior and interior walls, doors sticking, wallpaper buckling, etc. are covered by his policy. The defendant contends the damages sustained are excluded by the provisions of the policy.

"There is no dispute as to the facts. They were stipulated, including the fact that the costs to repair the damages to plaintiff's home is $16,500.00. The issue is whether the loss is covered under the policy, and if so, whether State Farm's refusal to pay was arbitrary, capricious or without probable cause so as to entitle plaintiff to penalties and attorney's fees.

"The facts show that the home was built in the city of Alexandria in 1972. Nida purchased the home in 1979 for a price of $46,500.00. Since Nida's purchase, the home has been insured by defendant under a homeowner's policy.

"On October 19, 1982, plaintiff filed a claim with defendant stating that the concrete slab of the building had cracked and that the unequal settlement of the structure had cracked the exterior and interior walls to such an extent as to materially impair basic structural intregrity (sic) of the building. Plaintiff stated these problems were associated with the fact that the house was built on a highly plastic clay soil which expands and contracts during wet and dry periods, thereby placing great stress on the foundation.

"Following receipt of plaintiff's October 19, 1982 demand, the defendant insurer employed Mr. Philip Beard, a consulting engineer, to determine the extent and the cause of the damage to plaintiff's home. In his report dated November 19, 1982, Mr. Beard states the following:

'SOIL STRUCTURE: According to the U.S. Department of Agriculture, Soil Conservation Service, the soil type under and around residence is probably Moreland. A general location map and list of soil properties of each of the soil types is included herein courtesy of the U.S. Department of Agriculture.

'DISCUSSION: D.1 Soil Mechanics: The type clay under residence as indicated by subsurface investigation is a highly 'active' soil. This means that soil is subject to volume changes caused from fluctuations in the natural in-place moisture content. Evaporative loss of soil moisture during dry seasons when average rainfall is low will result in swelling. Alternate shrink/swell conditions, or extreme shrinkage or swelling acting differentially can cause serious problems to a foundation system if the foundation or subgrade is not prepared to inhibit or absorb the resulting movement. Large trees in close proximity to foundation can seriously aggravate and/or accelerate shrinkage under perimeter beams due to transpiration.

'Desiccation shrinkage can occur in active clays or poorly compacted fills from 5 to 10 feet especially under the aggravated action of tree roots. Depending on the soil characteristics, this could result in long term differential settlement of 3 to 6 inches. The best foundation system in active clays either isolates the structure from the soil movement or minimizes the soil moisture loss/gain to an acceptable depth, usually 5 feet or greater.

'D.1.1 All cracking noted herein in exterior walls and interior finishes appears to be the result of differential settlement caused from soil desiccation and shrink/swell under perimeter of foundation.

'CONCLUSION: Cracking and settlement noted herein is the result of active soil shrinkage under the foundation system. The structure can be expected to continue to experience differential settlement from desiccation and/or shrink/swell.

'RECOMMENDATIONS: The north exterior wall of carport has rotated outward due to severe footing rotation. Immediate shoring or underpinning should be performed to preclude a potentially dangerous condition. A sudden severe impact to the subject wall could possibly cause the brick veneer to collapse.'

In his deposition, Mr. Beard explained how the foundation should have been constructed on this type of soil:

'Q. All right. Now, if the soil had been properly prepared at the time of the original construction, what would have been done to avoid this situation at this time?

'A. There are two options that are generally exercised for this type of soil. Option No. 1 requires the actual digging out of at least 4 or 5 feet of the very bad soil and wasting it and then replacing it with a very stable soil that's not subject to shrink-swell. The Option No. 2 requires the beefing up of the foundation. By that, I mean very deep, heavily reinforced exterior concrete beams. It becomes a matter of economics as to which option is generally exercised.'

"The insurance policy at issue provides in pertinent part:

'SECTION I--EXCLUSIONS

We do not cover loss resulting directly or indirectly from: 2. Earth Movement. * * *'

"In support of his argument that the above quoted exclusion does not apply in the present case, plaintiff sites (sic) Anderson v. Indiana Lumbermen's Mutual Insurance Company, 127 So.2d 304 (La.App. 2nd Cir.1961), writ denied (sic). In that case the trial court sustained an exception of no cause of action where the plaintiff alleged that the concrete slab foundation of his home cracked as a result of the expansion and contraction during wet and dry periods of the clay soil beneath. The policy excluded 'loss caused directly or indirectly by earthquake, or other earth movements except land slides (sic);' The Court of Appeal reversed, applying the doctrine of 'ejusdem generis', which states that where general words follow an ennumeration (sic) of specific terms, the general words must be construed as meaning the same general kind or class as those included within the specific terms. Under this rule, the Court of Appeal held that the general term "other earth movements" must be construed as meaning the same general kind or class of occurrances (sic) as the specific term "earthquake", and that the expansion and contraction of the clay soil during alternating wet and dry seasons was not of the same general kind or class as an earthquake. The Court concluded the loss was not excluded.

"In the present case, the plaintiff has cited several cases from other jurisdictions which have applied the doctrine of 'ejusdem generis' to similar policy provisions.

"In the present case the rule of 'ejusdem generis' can have no application. Although the words 'earth movement' are general, there are no words of specific meaning with which they must be construed to limit their meaning to a particular kind or class of incident.

"In the present case, the uncontradicted evidence shows that the cause of plaintiff's loss was earth movement, that is the rise and fall of the earth underneath plaintiff's home due to the expansion and contraction of the clay soil in alternating wet and dry seasons. The foundation of the home was not constructed to withstand this movement of the earth which occurs in this area of Rapides Parish. It was simply a defect in the construction of the foundation.

"Having found that coverage was excluded under the provision of the policy which excludes 'earth movement', it is unnecessary for the Court to discuss the other issues discussed by counsel respectively in their briefs. Of course, it also necessarily follows that the defendants are not liable for penalties and attorney's fees."

From that judgment plaintiff has appealed, assigning as error the trial court's finding that the "earth movement" exclusion in the policy excluded coverage of plaintiff's loss. Alternatively, plaintiff claims coverage under other provisions of the policy.

As noted by both parties, the jurisprudence is divided as to the meaning ascribed to both the term "collapse" and "earth movement". See--e.g.--Anno., Insurance Coverage--"Collapse of Building", 71 ALR 3d 1072; and Anno., Insurance--Earth Movement or Earthquake, 44 ALR 3d 1316. The policy herein insures for all risks of physical loss to the property except for loss caused by certain described risks including "deterioration; inherent vice; latent defect; settling, cracking, shrinking, bulging or expansion of pavements, patios, foundations, walls, floors, roofs, or ceilings."

Although settling is not defined in the policy, it does state that "collapse" does not include settling, cracking, shrinking, bulging or expansion." In addition, there is the aforementioned clause excluding losses resulting directly or indirectly from earth movement.

For many years the standard form of fire insurance contained a clause providing that if the...