Tred R. Eyerly | Insurance Law Hawaii
The court determined that the sinking of the insured’s floor caused by termites and rot deterioration did not meet the homeowners policy’s definition of collapse. Stewart v. Metro. Lloyds Ins. Co., 2020 U.S. Dist. LEXIS 111527 (S.D. Tex. June 24, 2020).
Beatrice Stewart, the homeowner, heard a loud bang one night as she lay in bed. The next day, she found that the floor near her bathroom and hallway had sunk and the house was sitting lower. She admitted the house never completely fell down. Upon investigation, Lloyds found that rot in the floor joists and subfloor decking were caused by a combination of termite damage and exposure to moisture. Lloyds denied the claim.
Stewart sued. Lloyds argued the policy required an “entire collapse” of the building or any part of a building, which did not occur here. The policy defined “collapse” as “an abrupt falling down or caving in of a building or any part of a building.” The record did not show that any part of Stewart’s floor caved in.
Nor did the undisputed evidence show an “entire” collapse. At oral argument, Steward argued that the word “entire” applied only to the collapse of a building but not to the collapse of part of a building. The court found this was an unreasonable interpretation. The word “entire” modified “collapse,” which applied to the phrase “of a building or any part of a building.” The policy covered damage caused by collapse to “any part of a building” only when there had been an entire collapse.
The evidence showed that part of the floor sank and some floor joists underneath the house broke or cracked; some walls were not plumb with the floor and had cracks; and some doors were off their hinges. This damage was similar to sinking and cracking that was not an entire collapse. Therefore, Lloyds’ motion for summary judgment was granted.