Massachusetts Appeals Court Holds Homeowners Policy Excludes Coverage for Claimed Structural Damage: Anti-Concurrent Causation Language Considered
October, 2009
In August, 2009, the Appeals Court of Massachusetts held in Ciampa v. USAA Property and Casualty Ins. Co., 2009 WL 2432301 (Mass.App.Ct. Aug. 11, 2009)(unpub.), that the policy's exclusion for damage caused by "wet or dry rot" applied to exclude coverage for the policyholders' claim for "extensive repairs to the structural elements of the home and garage." Id. at *1. The court in Ciampa affirmed the judgment of the trial court after the case was tried at a "jury-waived trial." Id.
The policyholder in Ciampa owned a "two-story home built in 1974 ... The original construction was defective to the extent the trim, windows, and walls did not have proper flashing to deflect water from the structural elements. Neither the walls nor the roof were repaired from 1974-2006." Id. In the spring of 2006, a contractor who was doing work on a nearby home noticed the policyholder's "roof was sagging between the rafters." Id. The contractor was ultimately retained by the policyholder to "replace the roof of his house." Id. "In the course of replacing the roof, [the contractor] removed several trim boards, revealing rotted walls and areas of structural damage to the house." Id. The policyholder made a claim; the carrier "investigated the claim, but refused coverage, citing the general exclusion in the policy for property damage caused by wet or dry rot, and the limited coverage for collapse of a building, or any part thereof, caused by hidden decay." Id.
The trial judge determined the home's damage was "caused by water entering behind the trim boards and wall sheathing over an extended period of time, some ten to twenty years, causing the wood to rot. However, despite the extensive damage ... the structure was never in imminent danger of collapse, and the [policyholder] continued to live in the home ..." Id. The Ciampa court affirmed.
On appeal, the policyholder contended, among other things, that the trial judge misconstrued the terms "collapse," "deformation," and "imminent," within the policy's coverage for collapse. Id. at *2. The policy provided coverage for "'direct physical loss to covered property involving collapse of a building or any part of a building caused only by ... decay that is hidden from view, meaning damage that is unknown prior to collapse or that does not result from a failure to reasonably maintain the property.'" Id. The policy defined collapse as "'a sudden falling or caving in ... a sudden breaking apart or deformation such that a building or part of a building is in imminent peril of falling or caving in and is not fit for its intended use.'" Id. Applying the standard principles of contract interpretation - "'we construe and enforce unambiguous terms according to their plain meaning'" id. (internal citations omitted) - the Ciampa court held that the trial judge applied the terms' plain meaning: "[t]he trial judge did not interpret the insurance policy to require ‘suddenness' as a condition for recovery ...", one of the policyholder's contentions. Id.
The Ciampa court also noted the effect of the anti-concurrent causation language within the policy's exclusion for rot. This exclusion contained a preamble expressly disclaiming coverage for "'loss caused directly or indirectly by ... [rot] ... Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.'" Id. The policyholder argued on appeal that the "train of events test" applied to provide coverage for his claim, notwithstanding the anti-concurrent causation language within the policy's rot exclusion.
In Massachusetts, courts follow the "train of events test" first described in Jussim v. Massachusetts Bay Ins. Co., 415 Mass. 24 (1993). This test provides "that if the efficient cause of a loss is an insured risk, then there will be coverage even though the final form of the property damage, produced by a series of related events, appears to take the loss outside the terms of the policy." 415 Mass. 24, 27. The Ciampa court found, however, that the anti-concurrent causation language that preceded the policy's exclusion for rot "'foreclosed [the policyholder] from invoking the train of events rule.'" 2009 WL 2432301 at *3 (internal citations omitted.)Back to CM Report on Property Insurance (2009v1) 2009 Volume 1 Table of Contents
