Wisconsin Builders, Inc. v. General Ins. Co. of America

• Decision Date: 03 October 1974
• Docket Number: No. 191,191
• Citation: 65 Wis.2d 91,221 N.W.2d 832
• Parties: WISCONSIN BUILDERS, INC., Appellant, v. GENERAL INSURANCE COMPANY OF AMERICA, Respondent.
• Court: Wisconsin Supreme Court

Page 832

221 N.W.2d 832

65 Wis.2d 91

WISCONSIN BUILDERS, INC., Appellant, v. GENERAL INSURANCE COMPANY OF AMERICA, Respondent.

No. 191.

Supreme Court of Wisconsin.

Oct. 3, 1974.

Grodin & Strnad, Milwaukee, for appellant.

Arnold, Murray & O'Neill, Milwaukee, for respondent.

CONNOR T. HANSEN, Justice.

The apartment was being constructed at the foot of a bluff in an 'L' shape so that the corner of the bluff bisected the inside angle of the 'L.' One wing of the building ran north and south along the west side of the bluff; the other wing ran east and west along the south side of the bluff.

On August 14, 1969, when construction of the apartments had reached the point of installing the interior drywall, the most easterly one-third of the east wing of the building located along the south side of the bluff collapsed. By pretrial stipulation, the parties agreed that the policy in question was in full force at the time of the collapse and covered the damage unless one or both of the following exclusions applied:

'V. EXCLUSIONS

'This policy does not insure under this form against:

'C. Loss caused by, resulting from, contributed to or aggravated by any of the following:

'1. earth movement, including but not limited to earthquake, volcanic eruption, landslide, mudflow, earth sinking, earth rising or shifting;

'D. Loss caused by or resulting from error, omission or deficiency in design, specifications, . . .' ¹

The building was commenced in the fall of 1968, at which time the bluff was partially excavated, leaving almost a verticle rise behind the building site. In December 1968, work on the project was ordered stopped by the Department of Industry, Labor & Human Relations because of concern over the safety of people working beneath the verticle cliff. Some 14 feet of driveway adjacent to another apartment complex previously built by plaintiff and located on top of the bluff had broken off and slid down the west side of the bluff toward the north wing of the building in question. Corrective measures were taken by building a telephone pole 'crick' in the west bank of the bluff to prevent further erosion and by cutting back the bluff to change the angle of repose. Construction was allowed to recommence early in 1969 and continued without further interruption until the collapse, damaging the other or east wing of the building which is the subject of this litigation.

Between December, 1968, and August, 1969, much concern was expressed about the continuing instability of the bluff, including the south side immediately above that portion of the building which subsequently collapsed. Robert S. Schley, a real estate appraiser hired by the financing bank, West Federal Savings & Loan Association, to monitor the work and make recommendations as to the release of funds for the project, visited the site four times between May, 1969, and the date of the collapse. Each time he reported concern over what he termed 'severe bank slip-page' on the south slope of the bluff. Schley testified that he repeatedly warned the bank and the plaintiff of this condition and recommended the installation of a retaining wall around the complete bluff. Schley's final report in this regard was made the day of the collapse based on his inspection of the site that morning.

Willard Van Handel of the Department of Industry, Labor & Human Relations also testified as to large cracks in the top of the bluff, including the area above the building in question, which he observed in his four to five inspections subsequent to December, 1968. While his reports showed no notations of bank slippage, additional terracing and filling was done on the south side of the bluff in May, 1969, at his department's suggestion.

Witnesses called by the plaintiff testified they did not believe the bluff to be unstable. Leon V. Sniegowski, a loss control representative for the defendant, called adversely by the plaintiff, testified that only fill dirt from the upper parking lot had washed out in December, 1968; that no movement of the original hill had occurred; and that any additional erosion would be controlled by the terracing that was contemplated. He also stated that the distance on top of the bluff from the edge of the south side to the nearest upper apartment building remained a constant twelve feet through June, 1969, the time of his last inspection. Sniegowski saw no slides or cracks in the bluff during his June inspection. Robert D. Trebilcox, president of the plaintiff company, testified that in May and June he saw no severe bank slippage but merely erosion caused by improperly directed water spouts from the apartments on top of the bluff. Kenneth Leathers, plaintiff-company's superintendent at the building site, corroborated Trebilcox's testimony.

At the suggestion of the Department of Industry, Labor & Human Relations, it was decided to do additional filling and terracing of the bluff after that done in May, 1969. The May filling had raised the level of the dirt behind the north wall of the east wing to approximately 10 feet. The building plans called for backfilling to this height. Additional fill was ordered and was brought in on August 13th and 14th to fill the terrace behind or north of the east wing. This fill raised the level behind the wall to 14 feet and the intention was to terrace the fill back up the bluff leaving the level behind the wall at 10 feet. On the two days in question, the fill was being deposited all along the north wall of the east wing by dumping it off the top of the bluff, letting it slide down the south side of the hill and then moving it around at the bottom, using a bulldozer. There was testimony that on August 13th the bulldozer was working within six feet of the north wall which subsequently collapsed. The filling continued on August 14th until mid-day when the north wall started tilting. The fill which had been deposited was resting against the building as they had not yet started terracing it back up the bluff.

There were three eyewitnesses to the collapse of the building who testified at the trial. Warren Gollin, secretary of the plaintiff company, stated that he observed cracks in the cement floor of the building at 1:30 p.m. He saw the north wall slowly tilt toward the south, taking five or six hours to fall over. He further stated he saw no earth movement on the bluff before the wall started to tilt, but that the earth fill seemed to follow the wall as it fell over. He saw no cracks or erosion in the bluff before the wall started to tilt. Leathers, the construction superintendent, stated that he saw Allen Wunderlich, the excavator, dumping fill which created a gradual slope from the top of the bluff down to the north wall. He saw the floor cracks and determined that too much earth pressure was being exerted against the north wall. He called for a back hoe to dig the dirt away from the wall and relieve the pressure. He saw no landslide or earth movement down the bluff but rather described the slow movement of the wall as if a glacier was pushing behind the wall. Leathers went to the top of the bluff after the collapse and noted that twelve feet of the bluff table had cracked and moved straight down as if it had settled leaving the top soil still intact. Wunderlich, the third eyewitness and the excavator at the site, stated he saw no movement of earth behind the north wall or on the bluff before or as the wall was tipping. He left the site about an hour after the wall started to tilt.

Witnesses who arrived shortly after the building collapsed or on the next day were nearly unanimous in what they observed. There was a good deal of earth behind and on top of the collapsed north wall. Trebilcox said that it was primarily fill earth not earth from the bluff. This was confirmed by soil samples taken some time later. Other testimony indicated that a large portion of the bluff had fallen down either before or after the collapse of the wall but no witness could specify when. Richard L. Atkins, the building and heating inspector for the city of Appleton, stated that of the original 18 feet of table land on the bluff above the collapsed building prior to August 14th, only eight feet remained on the evening of the 14th. Van Handel stated he saw evidence of a portion of the bluff still cracking and moving on August 15th.

Finally, three witnesses testified as to an opinion concerning causation. Trebilcox, an engineer, stated that he believed excessive filling above the originally proposed 10 foot height plus too much heavy equipment working too closely to the structure had increased the earth pressure on the north wall, causing the collapse. L Michael Kenney, the registered professional engineer who designed the building, concurred. Dr. William Thomas Painter, a professor of soil mechanics and foundation engineering at the University of Wisconsin-Milwaukee, also concurred, noting that the additional fill with a gradual slope up the bluff, as existed on August 14th, would have increased the earth pressure on the wall up to two times that which the wall had withstood since May when backfilled to only the 10 foot height. Painter further stated that a landslide would have tipped the wall in the opposite direction. Painter conceded that if a 12 foot piece of the bluff had broken off and slid toward the north wall, it was possible that similar damage could have occurred because of the increased earth pressures caused thereby. He felt, however, that such earth movement would have been readily detectable by anyone watching.

The case was submitted to the jury on special verdict, and the questions of the verdict relevant to this appeal are:

Question No. 1 (as requested by the defendant), reads in part:

'. . . At or immediately prior to the collapse of the building in question, was the loss created by, resulting from, contributed to or aggravated by any of the following:

'earth movement, including but not limited to earthquake,...