Prickett v. Royal Ins. Co.

• Decision Date: 20 July 1961
• Citation: 56 Cal.2d 234,86 A.L.R.2d 711,14 Cal.Rptr. 675,363 P.2d 907
• Parties: , 363 P.2d 907, 86 A.L.R.2d 711 Gene A. PRICKETT et al., Plaintiffs and Appellants, v. ROYAL INSURANCE COMPANY LIMITED, Defendant and Respondent. L. A. 25837.
• Court: California Supreme Court

Page 675

14 Cal.Rptr. 675

56 Cal.2d 234, 363 P.2d 907, 86 A.L.R.2d 711

Gene A. PRICKETT et al., Plaintiffs and Appellants, v. ROYAL INSURANCE COMPANY LIMITED, Defendant and Respondent.

L. A. 25837.

Supreme Court of California, In Bank.

July 20, 1961.

Brown & Grisham and Roy J. Brown, Long Beach, for plaintiffs and appellants.

Thomas P. Menzies and James O. White, Jr., Los Angeles, for defendant and respondent.

WHITE, Justice.

This is an appeal by plaintiffs Gene and Virginia Prickett from a judgment in favor of defendant Royal Insurance Company in an action for a declaration of liability under an insurance policy.

In April of 1957, the Pricketts purchased a residence constructed five years earlier in San Pedro, acquiring as part of the purchase an insurance policy which had been carried by their vendors. The policy, written by the defendant insurance company, was a 'comprehensive dwelling policy' which insured the home against 'all risks of physical loss' except those losses specifically excluded from coverage. Among the latter were losses occasioned by '* * * normal settling, shrinking or expansion of foundation, walls, floors or ceilings.'

Plaintiff Gene Prickett testified that at the time of purchase an inspection had revealed no defect in the walls or foundation of the house. He further testified that when he returned home on the evening of March 10, 1958, he found that since that morning the west wing of the house, specifically the west masonary wall thereof, had sunk some five to seven inches on one side and twelve inches on the other, causing openings in the wall, and further resulting in a rupture of the radiant heating system pipes. There is nothing in the record from which it may be inferred that the damage did not occur as suddenly as, and in the manner described by Mr. Prickett.

A soil engineer sent by defendant to inspect the Prickett premises testified as an expert that the sinking was attributable to the fact that the west wing of the house rested on land which had been filled up to a depth of 35 feet with improperly compacted soil, and that under these circumstances it was inevitable that some sinking would eventually occur. The engineer also testified as an expert that there was no accepted definition in the construction industry of what constitutes 'normal settling.' A building contractor who had surveyed the damage testified that he estimated the cost of repairs to be more than the $7,550, which plaintiffs allege to be the reasonable damage to the home. No extrinsic evidence was introduced to aid in interpreting the policy.

The trial court found that the house rested in part on improperly filled land. It held that the sinking of the west masonry wall and resulting damage was attributable to 'normal settling' of the foundation and walls and that the loss therefore fell within the terms of the policy's exclusionary clause and was non-compensable under the policy's terms. The issue presented, then, is whether as a matter of law the trial court properly interpreted the term 'normal settling', as employed in the exclusion clause of a comprehensive dwelling policy insuring against all risks of physical loss.

An appellate court is not bound by a trial court's interpretation of an uncertain or ambiguous contractual term where the lower court's determination has been made without resort to extrinsic evidence. "(T)here is no issue of fact, and it is the duty of an appellate court to make the final determination in accordance with the applicable principles of law." Meyer v. State Board of Equalization, 42 Cal.2d 376, 381, 267 P.2d 257, 260 quoting from Estate of Platt, 21 Cal.2d 343, 352, 131 P.2d 825. 'However, it is also the rule that where no extrinsic evidence has been introduced, the interpretation placed upon the contract by the trial court will be accepted by this court if such interpretation is reasonable, or if the interpretation of the trial court is one of two or more reasonable constructions of the instrument.' Lundin v. Hallmark Productions, Inc., 161 Cal.App.2d 698, 701, 327 P.2d 166, 168.

When the contract is a policy of insurance, the latter rule operates subject to the well established rule of construction 'that provisos and exceptions must be strictly construed against the insurer, who is bound to use such language as to make the...