Ohio Appellate Court Holds That Collapse Coverage Exists After Bricks Fall Off Of Insured Property

The Ohio Court of Appeals, Fifth District recently considered whether a first party property insurance policy that stated “[w]e will pay for direct physical loss or damage … caused by collapse of a building or any part of a building” provided coverage for claimed property damage consisting of a bowed wall and crumbling bricks.  Zanesville LLC v. Motorists Mut. Ins. Co., 2007 WL 4227547, *1.  The court held that the policy provided coverage for the claimed damage, and affirmed the trial court’s entry of summary judgment in favor of the insured on the issue of coverage.  

The insured owned property known as the City Grille Building in Zanesville, Ohio which was insured by Motorists Mutual.  The policy provided additional collapse coverage:  “’1.  We will pay for direct physical loss or damage to Covered Property, caused by collapse of a building or any part of a building insured under this Coverage Form, … 4.  Collapse does not include settling, cracking, shrinkage, building, or expansion.’”  In June 2001, one of the insured’s partners, Robert Kessler, noted a problem with the City Grille Building.  “According to Kessler, the wall was bowing and was pulling away from the building.  … [T]he opening between the building and the front wall was approximately 3 to 4 inches.”  He also noted bricks had crumbled and fallen off the building.  Kessler contacted the Mid-East Ohio Building Department’s James Waymer.  Waymer observed the property, and “[b]ased on the condition of the building, [he] determined that same was in danger of imminent collapse and needed to be torn down.”  

The insured contacted a third-party, James & Sons, to “’control the collapse’ with a large backhoe.”  James & Sons “used a backhoe to take the wall down and to demolish the entire building.”  The insured submitted a claim to its insurer for the property damage at the City Grille Building.  The claim was denied because the insurer determined that there had not been a “’collapse’” of the property.  Litigation ensued.  The insured moved for summary judgment which was granted by the trial court on the issue of coverage.  The insurer appealed.  

On appeal, the insurer relied on Ohio law which defines collapse as an “actual falling down, falling together, or caving into an unorganized mass.”  See Olmstead v. Lumbermen’s Mut. Ins. Co., 22 Ohio St.2d 212, 216, 259 N.E.2d 123 (1970).  The insurer contended that pursuant to Olmstead, there was no collapse, “and that appellee [the insured] is not entitled to coverage because, based on the ‘danger of collapse’ appellee made a conscious decision to have the building razed.”  

The Zanesville court applied the Olmstead meaning of collapse, but noted that evidence was presented to the trial court demonstrating that part of the City Grille Building had actually collapsed.  “There was testimony from both Robert Kessler and James Waymer that bricks from the building were on the ground in front of the building. … Waymer, when asked whether there was any debris on the ground, testified that there were ‘little pieces of brick here and there.’”    The Zanesville court found coverage was provided via the policy language which stated that collapse coverage was provided for collapse of a building or “any part” of a building    (emphasis original).  The court held that there was evidence supporting the position that “part of appellee’s building actually fell.”  The court affirmed the entry of summary judgment for the insured on coverage.  

The court in Zanesville seized upon the fact that bricks had fallen off the City Grille Building, and noted that the cases upon which the insurer relied did not involve property that had fallen down or disintegrated in any way.