Sagging Ceiling May Constitute Collapse
June 20, 2012
The 1st District Appellate Court, over dissent, recently held that a property insurance policy's coverage for "collapse" possibly applied to damage caused by a sagging basement ceiling, which the evidence showed resulted from numerous, highly stacked piles of papers and debris the insured stored in his home. Gulino v. Economy Fire and Casualty Co. 2012 IL App (1st) 102429, 2012 WL 1108366 (1st Dist. March 30, 2012).
The insured, Gulino, was represented by Robert D. Shearer. Condon & Cook LLC represented the insurer, Economy.
In February 2006, Gulino returned to his home in Wilmette at night, found that his heat was not working and noticed several inches of water on the basement floor. He contacted a plumber the next day who inspected the house and found excessive amounts of paper and debris piled throughout the residence. The plumber contacted the village, whose architect confirmed the findings and determined that the residence was uninhabitable.
Gulino left the house and took up residence in an extended-stay hotel. He claimed, however, that the water damage resulted after the basement ceiling "suddenly sagged," which disabled the heating system in the home and which in turn caused the water pipes to freeze and split. He thus notified Economy, the issuer of his homeowner's policy.
The policy provided all-risk property coverage, except as specifically excluded. The policy further indicated that it provided coverage for "sudden and accidental direct physical loss" including the entire collapse of a building or any part of it caused by "certain perils," including "weight of contents." The policy defined "collapse" as "an abrupt falling down or caving in," but not including settling, sagging, bending, leaning, etc. The policy also excluded coverage for the insured's "neglect to use all reasonable means to save and preserve property."
On being notified of the claim, Economy agreed to pay for the water damage to the basement and helped pay for a few weeks' stay in the hotel. It denied coverage, however, for the structural damage claim on the ground that the loss did not constitute a "collapse and on the further ground that Gulino neglected to use reasonable means to preserve the property."
Gulino filed suit against Economy seeking coverage. The evidence generated in the lawsuit included testimony by Economy's expert who conducted an inspection and found that the floor joists forming the basement ceiling had been pulled off their beam bearings, which was likely related to the debris stacked throughout the house, including 6- to 7-foot piles of paper. The expert further indicated that the overloading could have caused damage between six months and a year and that the debris could have caused the structure to collapse, but had not yet done so.
Based on this evidence, Economy filed for summary judgment, which was granted; Gulino appealed.
In an opinion by Justice Sheldon A. Harris, the 1st District Appellate Court reversed. Harris started his analysis by noting that part of an insured's burden with an all-risk policy is showing that a covered loss was fortuitous. He further observed that that policy defined a collapse as both a "falling down" and a "caving in," that the two terms are different, that the evidence demonstrated that a portion of the basement ceiling did in fact cave in and that Gulino, therefore, met his burden of demonstrating a collapse.
Economy argued, however, that the loss was not fortuitous, because the evidence showed that the paper on the first floor caused the cave in. Harris countered that the evidence on this point was not necessarily undisputed because Economy's expert never "explicitly stated that he observed the actual paper load above the affected ceiling."
Gulino, in addition, said Harris, presented a counteraffidavit stating that he did not observe any bending or bowing in the ceiling up until the time of the loss and that in the area of the actual cave-in, only a lightweight desk and a 2-foot stack of papers had been placed on the floor above the ceiling.
Economy attacked the affidavit as being conclusory and speculative, but Harris rejected the attacks on the ground they had not been made in the trial court and were waived. Harris also criticized the trial court for rejecting some of the statements made by Gulino which, according to Harris, constituted improper credibility determinations.
Economy further argued that, even if Gulino had made a prima facie case, it was entitled to summary judgment based on the exclusion for an insured negligent in preserving property. Harris rejected this argument because of the supposed lack of undisputed evidence that the collapse was caused by the weight of papers.
The court, therefore, reversed judgment in favor of Economy and remanded based on fact issues.
Justice Patrick J. Quinn dissented on the ground that Economy's expert did, in fact, conclude that the structural integrity was compromised by the paper debris in the house, that the evidence was undisputed that tons of waste paper existed throughout the house and that there was "no even remotely plausible evidence that the sagging of the joists was caused by anything other than Gulino's pathological hoarding of paper trash over a period of years."
An expert's failure to identify and state the cause of loss with sufficient explicitness may result in a finding of a factual issue sufficient to defeat summary judgment with respect to a claim under an all-risk property policy.