United States v. Sanders

Decision Date03 March 1964
Citation225 Cal.App.2d 275,37 Cal.Rptr. 303
CourtCalifornia Court of Appeals Court of Appeals
PartiesJoseph SAUER and Jenine Sauer, Plaintiffs and Appellants, v. GENERAL INSURANCE COMPANY OF AMERICA et al., Defendants and Respondents. Civ. 27336.

Jerome W. Shepard, Los Angeles, for appellants.

Bolton, Groff & Dunne and Gene E. Groff, Los Angeles, for respondents.

KINCAID, Justice pro tem.

Plaintiffs appeal from a judgment in favor of defendant insurance company following a trial. Plaintiffs by their complaint herein seek declaratory relief based upon an insurance policy issued by defendant on May 26, 1959, denominated 'Homeowners Policy' covering their residential premises.

They allege that about April 10, 1961, while the policy was in effect, their residence sustained substantial damage to the foundation, walls, floors and other portions of the building in that the foundation cracked and settled, the walls and ceilings cracked, the floors and doors warped and there was a general settling, twisting and warping of the house. That about May 1, 1961, they discovered that one of the pressure water pipes underneath the dwelling but above ground had accidentally sprung a leak during the policy period, and had been discharging water into the ground for some time, causing an area of earth beneath the house to become soaked and muddy which, in turn, caused the foundation piers of the residence to settle, resulting in the described twisting, warping and cracking. That immediately upon discovery they notified defendant and furnished proof of loss and performed all conditions of the policy required of them. That on May 17, 1961, defendant advised plaintiffs in writing of rejection of their claim on the ground that the damage they had sustained was not covered by the said Homeowners Policy.

Plaintiffs further allege that said policy does provide insurance coverage for the damage so sustained by them in that, among other things, it provides: 'SECTION IX. PERILS INSURED AGAINST * * * This policy insures against all direct loss to the property covered caused by: * * * 15. Accidental discharge, leakage or overflow of water or steam from within a plumbing, heating, or air conditioning system or domestic appliance, as well as the cost of tearing out and replacing any part of the building (a) covered required to effect repairs to the system or appliance from which the water or steam escapes. (A, C, D, E, G, K).'

Defendant, while admitting that plaintiffs' building settled and that the damages alleged resulted from such settling, denies that its policy of insurance covers such damage. By way of affirmative defenses, defendant alleges three claimed exclusionary clauses in said policy which it contends excludes it from liability to plaintiffs herein. They are first: '4. Earth Movement Exclusion: This policy does not insure against loss caused by, resulting from, contributed to, or aggravated by any earth movement, including but not limited to earthquake, landslide, mudflow, earth sinking, rising or shifting, unless loss by fire or explosion ensued, and this company shall then be liable only for such ensuing loss. * * *.' Second: '3. Water Exclusion: * * * This policy does not insure against loss caused by, resulting from, contributed to, or aggravated by any of the following: * * * (c) Water below the surface of the ground * * *.' Third: '5. Settling and Cracking Exclusion: This policy does not insure against loss by settling, cracking, bulging, shrinkage or expansion of walls, floors, ceilings, roofs, foundations, sidewalks, driveways or pavements.'

The trial court found the allegations of the complaint generally true and that during the policy period an accidental discharge or leakage of water from a part of the plumbing system of said house occurred, spraying a substantial quantity of water upon the ground beneath the house, causing a portion of the earth to sink and some foundation piers to settle from beams beneath a part of such dwelling. That plaintiffs' house was extensively damaged as a result of such settling and that such damage was contributed to and aggravated by the sinking of a portion of the earth beneath the building due to the water which escaped from a portion of its plumbing system.

As conclusions of law the court found, in effect, that while the claimed exclusionary clauses numbered '3.' and '5.' as set out in the defendant's second and third affirmative defenses did not apply to the facts and circumstances here shown, the terms of clause '4.' as alleged in the first defense expressly excludes the loss suffered by plaintiffs. That while the loss claimed was not caused by or resulting from the settling of the ground, such loss was contributed to and aggravated by the earth sinking following the water leak.

Plaintiffs argue that the severe damage occurring to their home in the short space of several months in 1961, after the policy had been in effect some two years, demonstrates it was not the result of 'earth movement,' 'earth sinking,' or 'settling of foundations' or of 'water below the...

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