Illinois Appellate Court Holds That Building's Dilapidated Condition Rendered Collapse Non-Fortuitous
December, 2003
by Richard A. Buchanan and Mindy M. Medley
In Johnson Press of America, Inc. v. Northern Ins. Co. of New York, 791 N.E.2d 1291 (Ill. App. 2003), the Illinois Appellate Court, First District held that “[t]he dilapidated condition of the building demonstrates that the collapse of the building did not happen by chance or accident. It was expected. Since plaintiff [the insured] failed to establish a prima facie case that the loss was due to a fortuitous event, the insurer is not liable.”
Facts
In June 1998 -- without any interference from natural forces --the insured property, a vacant two-story brick building built in the early 1900’s, collapsed. Portions of the building’s roof, the second floor, and the first floor collapsed into the building’s basement, rendering the masonry walls unstable. After the collapse, the City of Pontiac, Illinois, ordered that the building and an adjacent warehouse be razed. Two days after the collapse, the building’s owner, (“plaintiff”) filed a claim for damages caused by the roof’s collapse.
The insurer (“defendant”) retained an independent adjuster to review plaintiff’s claim the day it was received. The adjusting company sent an adjuster to the loss site that same day. Defendant also retained an architectural and structural engineering firm to assist in assessing the cause and origin of plaintiff’s claimed damage. The cause and origin investigator visited the loss site two days after the adjuster.
Defendant’s adjuster determined that “the collapse occurred as a result of long-term decay due to the plaintiff’s failure to maintain the roofing of the building.” The cause and origin investigator concluded that the building had severe wood decay caused by water infiltration. The water infiltration occurred because a portion of the roof was missing, allowing water to enter the first and second floor stairwells and cause the wood decay.
Plaintiff also retained an engineering firm to review the report prepared by the cause and origin investigator. Although plaintiff’s engineer criticized the methodology used by defendant’s cause and origin investigator, plaintiff’s engineer stated in his deposition that the collapse of the building was due to long-term deterioration and water infiltration.
Defendant secured additional evidence regarding the facts surrounding the building’s collapse. The City of Pontiac had contacted plaintiff on at least two occasions to inform him of loose material on the building’s roof and that some of the material had blown off into neighboring yards. Additionally, a neighbor had “lodged six complaints with the City of Pontiac’s building safety services complaining that roofing material from the [p]laintiff’s building had blown off and landed in her yard.” Finally, plaintiff’s maintenance man testified at his deposition that although he was in charge of maintaining the premises “he did not go inside the building to physically examine the premises. Instead, he would do a ‘drive by,’ checking on the structure.”
Defendant denied plaintiff’s claim under the policy’s exclusions for loss or damage caused by or resulting from wear and tear, fungus, decay, deterioration, continuous or repeated seepage or leakage of water occurring more than fourteen days, and faulty, inadequate or defective maintenance. Plaintiff subsequently filed suit, and the trial court granted defendant’s motion for summary judgment.
Analysis
The appellate court affirmed the entry of summary judgment for defendant in accordance with the fortuity doctrine, holding that plaintiff failed to establish even a prima facie case--despite the fact that defendant denied coverage under various policy exclusions. The court stated that under the fortuity doctrine, insurance coverage is only afforded to events that are not otherwise excluded, and that as far as the parties are aware, are “dependent on chance.” The court determined in light of the information contained in the adjuster’s and the investigator’s reports that “the collapse of the building did not happen by chance or accident. It was expected.” Although the court based its opinion in large part on the fortuity doctrine, it also recognized that even if plaintiff had established a prima facie case, the damage “resulted from a peril expressly excluded from the policy. … The roof collapse was due to lack of maintenance and water seepage, which caused decay and weakened the wood structures. As such, the cause(s) of the roof’s collapse fell squarely within the exclusion clauses of the policy.”
Learning Point:
The court in Johnson Press rested its decision primarily on the fortuity doctrine. However, the court did not address whether plaintiff had knowledge of the likelihood that a collapse would occur, despite Illinois precedent requiring such knowledge. (See, e.g., Mattis v. State Farm Fire and Casualty Co., 454 N.E.2d 1156, 1163 (Ill. App. 1983)). That plaintiff’s damage was “expected” or “inevitable” in general does not address whether plaintiff knew that the damage would occur within the policy period when the insurance policy was purchased. Other courts have held that even if damage is inevitable, but unknown to the parties at the time of contracting, such damage is still fortuitous. (See, e.g., Snapp v. State Farm Fire and Casualty Co., 24 Cal. Rptr. 44 (Cal. App 1962)).
We will, of course, inform our readers of future Illinois cases addressing the fortuity doctrine.
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