2017
WL 976396

Only
the Westlaw citation is currently available.

United
States District Court,

N.D.
Illinois, Eastern Division. 

 

The
TRAVELERS HOME AND MARINE INSURANCE COMPANY, Plaintiff,

v.

Patrick
WALSH and Colleen Walsh, Defendants.

 

Case
No. 15 CV 3063

Signed
03/14/2017

 

Thomas Berthold Orlando, Matthew Peter Fortin, Foran,
Glennon, Palandech Ponzi & Rudloff PC, Chicago, IL, for Plaintiff.

Stephen Burriesci, Law Office of Stephen Burriesci, Chicago,
IL, for Defendants.

OPINION AND ORDER 

Joan H. Lefkow, U.S. District Judge 

*1 The Travelers Home and Marine Insurance Company filed
this declaratory judgment action to determine whether it has a duty to
indemnify under a homeowner’s insurance policy it issued to Patrick and Colleen
Walsh. Cross-motions for summary judgment are pending, and the parties agree
that the case can be resolved on the issue of whether the Walshes’ loss was
caused by a “collapse” as that term is defined in the policy. If so, Travelers
is liable. The material facts are agreed. For the reasons stated below, the
motion of Travelers is granted and the motion of the Walshes is denied.1

As set out in the Joint Statement of Material Facts (dkt.
28), Travelers issued to the Walshes a homeowners insurance policy, effective
from May 21, 2014 to May 21, 2015 (the Policy), providing certain coverage for
loss and damage to the Walshes’ house located on West Catalpa Avenue in Chicago
(the Dwelling).

The Dwelling was a one-and-one-half story brick bungalow
built in the late 1920s. In 2014, the Walshes engaged a contractor to build a
second story addition above the existing Dwelling and a two-story addition off
the rear. After the work started, the Walshes agreed with the contractor to
expand the project to lowering the existing basement floor to be level with the
basement floor of the rear addition. The Walshes temporarily moved out of the
Dwelling and intended to return after the construction was completed. 

In August 2015, as a result of the contractor’s malfeasance,
the foundation of the Dwelling was compromised, failed, and cracked, rendering
the Dwelling structurally unsound and unsafe, both for use as a dwelling and
for the completion of the project. Specifically, the west brick wall laterally
displaced2; the first story floor/basement ceiling (including
joists) sloped downward towards the west wall, and the second story floor
moved. Cracks in the mortar and large gaps or separations opened—some through
which daylight was visible—between the bricks and between bricks and window framing
on the west wall, and there were cracks in the mortar and large gaps or
separations between the bricks on the east wall. Cracks on interior walls,
ceiling and archways were also observed. No wall had fallen over to the ground,
however, and no one observed that anything had come off the Dwelling and fallen
to the ground, such as bricks. Soon after observing these conditions, the
contractor jacked and shored the west side of the Dwelling in order to support
the load of the Dwelling, and he manually removed the bricks which had
comprised the west exterior wall.3 

*2 The Illinois Supreme Court applies the following rules of
construction of insurance policy provisions: 

The construction of an
insurance policy and its provisions is a question of law. A court must
determine the intent of the parties when construing the policy. To determine
the meaning of the policy’s words and the intent of the parties, the court must
construe the policy as a whole, with due regard to the risk undertaken, the
subject matter that is insured and the purposes of the entire contract. A
policy term is not ambiguous because the term is not defined within the policy
or because the parties can suggest creative possibilities for its meaning. In
addition, a court cannot read an ambiguity into a policy just to find in favor
of the insured. A policy provision is ambiguous only if it is subject to more
than one reasonable interpretation. If a policy provision is unambiguous,
however, a court must give the words of the provision their plain, ordinary and
popular meaning. 

Lapham-Hickey Steel Corp. v. Protection Mut. Ins. Co.,
655 N.E.2d 842, 846, 166 Ill. 2d 520, 211 Ill. Dec. 459 (1995) (internal
citations and quotation marks omitted). Where the terms of a contract are
clear, the court must ascertain the parties’ intent solely from the language of
the agreement. Commonwealth Ins. Co. v. Stone Container Corp., No. 99 C
8471, 2002 WL 31833862, at *4 (N.D. Ill. Dec. 16, 2002), citing, inter alia,
LaSalle Natl. Trust, N.A. v. ECM Motor Co., 76 F.3d 140, 144–45
(7th Cir. 1996). But if the terms are ambiguous, the court may refer to
extrinsic evidence to determine intent. Commonwealth Ins. 2002 WL
31833862 at *4. 

The Policy covers loss from collapse of all or part of the
Dwelling resulting from the use of defective material or methods during
construction, remodeling or renovation of the Dwelling. It defines “collapse”
as “an abrupt falling down or caving in of a building or any part of a building
with the result that the building or part of the building cannot be
occupied[.]”4 Excluded from “a state of collapse,” however, is “a
building or any part of a building that is in danger of falling down or caving
in”; a part of a building that is standing, “even if it has separated from
another part of the building”; and a building or any part of a building that is
standing “even if it shows evidence of cracking, bulging, sagging, bending,
leaning settling, shrinkage or expansion.” 

Two Illinois Appellate Court decisions have addressed
“collapse” under a homeowners policy, both of which liberally construe the
term. In Indiana Ins. Co. v. Liaskos, 697 N.E.2d 398, 297 Ill. App. 3d
569, 231 Ill. Dec. 844 (1998), the court adopted the “modern view” that the
term “is sufficiently ambiguous to include coverage for any substantial
impairment of the structural integrity of a building” and “does not require
complete destruction or falling in of the building or a part thereof nor would
it require that the loss result from a sudden catastrophic occurrence.” Id.
at 404 (internal citations omitted). In Gulino v. Economy Fire & Cas.
Co., 971 N.E.2d 522, 2012 IL App. (1st) 102429, 361 Ill. Dec. 420 (2012),
the court defined “entire collapse of a building” to include “caving in,”
meaning “to fall in or down esp[ecially] from being undermined.’ ” Id.at
¶ 18 (quoting Webster’s Third New Int’l Dictionary 357 (1981)). The court
reasoned that “caving in” “connotes the undermining of a structure that can be
something less than a complete falling down.” Id. 

*3 After Liaskos and Gulino, and until the
Illinois Supreme Court decides differently,5 the legal meaning of
“collapse” in a homeowners policy, disregarding the exclusions, is the sudden
impairment/undermining of a structure even if the structure has not completely
fallen down. If this view is adopted, the Dwelling would be in a state of
collapse. 

The Policy, however, has one additional exclusion from
coverage that was not present in the policies addressed in Liaskos and Gulino.
The Policy does not cover a loss from a collapse if the building remains
standing, even if cracked, bulging, sagging, bending, leaning, settled, shrunk
or expanded. Travelers argues that this difference in policy language
distinguishes the instant case from Liaskos and Gulino, citing
cases from other jurisdictions in support. The Walshes argue that the court
should adopt the holding of Kings Ridge Community Ass’n, Inc. v. Sagamore
Ins. Co., 98 So. 3d 74 (Fl. App. 2012), that the term “standing” is
ambiguous and should be construed to include a situation where a building or
part of a building has significantly dropped in height or elevation from its
previous level. 

In Kings Ridge, eleven roof trusses supporting a wing
of a structure failed, causing the roof above the trusses and a drop ceiling
below the trusses to deflect downward twelve inches. Id. at 78. The
court found that the term “standing” means “upright on the feet or base;
remaining at the same level, degree, or amount for an indeterminate period.” Id.
(quoting Merriam-Webster’s Collegiate DictionaryY 1216 (11th ed. 2008)). It
concluded that, after the loss incident, the trusses, roof, and ceiling, were
no longer upright on their base, no longer at the same level, degree, or height
as before, and therefore not standing. 

Travelers cites cases contrary to Kings Ridge. In Residential
Management (N.Y.) Inc. v. Fed. Ins. Co., 884 F. Supp. 2d 3 (E.D.N. Y 2012),
the court ruled that a water tank and its steel support frame that, although
leaning, had not fallen over or caved in, was excluded from “collapse” under
the policy because it was standing. In Rector St. Food Enterprises, Ltd.
v. Fire & Cas. Ins. Co. of Conn., 35 A.D.3d 177, 178, 827 N.Y.S.2d
18 (2006), the court ruled that a building that had to be demolished or made
safe because it had two-to-three-inch-wide cracks in its façade and was
sinking, out of plumb, and leaning, was “indisputably standing in the hours
before its demolition,” so the loss was not covered. In Mount Zion Baptist
Church of Marietta v. GuideOne Elite Ins. Co., 808 F. Supp. 2d 1322, 1325
(N.D. Ga. 2011), the court ruled that, where a church sanctuary that had
outwardly bowed sidewalls and a sagging roof, but the building and its
components were still standing, there was no collapse under the policy. 

*4 The Policy, read as a whole, demonstrates that Travelers
intended (the Walshes had no part in drafting the Policy) to cover only a peril
in which the building loses its character as a building, similar to the law of
Illinois before Liaskos adopted the “modern view” of collapse.6
The use of the term “a building that is standing,” in its ordinary meaning is
not ambiguous. It means erect, in place on its foundation. Even if one refers
to the dictionary, as in King’s Ridge, to resolve the meaning of the
term “standing,” it means the same. In King’s Ridge, the court adopted a
dictionary definition of “standing” as (1) “upright on its base” and (2)
“remaining at the same level, degree, or amount for an indeterminate period.”
Reference to the online version of Merriam-Webster’s definition of “standing,”
however, reveals that the second meaning of standing cited in King’s Ridge
refers to “a standing offer” or “a standing joke,” which has no relevance here.
“Standing” in the policy means, as stated in King’s Ridge, “upright on
the base,” or, similarly, “upright on the feet or in place.” Webster’s Third, supra,
2224. A house that is cracked but still upright on its base is standing; a part
of a house that has dropped downward but is still upright is standing. To give
the term the strained meaning the Walshes advance is simply unreasonable.
Because it is undisputed that the Dwelling, including the west wall, remained
upright on its foundation after the loss incident, the loss is excluded from
coverage of a collapse.

For the reasons stated above, the motion of The Travelers
Home and Marine Insurance Company for summary judgment (dkt. 26) is granted.
The cross motion of Patrick Walsh and Colleen Walsh for partial summary
judgment (dkt. 29, 31) is denied. The Clerk is directed to enter judgment in
favor of plaintiff. The case is terminated.

1          The court’s
jurisdiction rests on diversity of citizenship, as the parties are citizens of
different states and the amount in controversy exceeds $75,000, exclusive of
interest and costs. See 28 U.S.C. § 1332(a). Venue is proper in this district
as the defendants reside and the Dwelling is located within the Northern
District of Illinois. See 18 U.S.C. § 1391(b)(1),(2). The court applies the
well-established method of evaluating a motion for summary judgment by
construing the facts in a light most favorable to the non-movant so as to
determine whether there is a genuine issue of material fact that must be tried
to jury. See Fed. R. Civ. P. 56; Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 255, 106 S. Ct. 2505, 91 L.Ed. 2d 202 (1986); Celotex Corp. v.
Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L.Ed. 2d 265 (1986).
Because the parties agree that a single issue resolves the case, the court
views the facts in a light favorable to the Walshes. See Scott v. Harris,
550 U.S. 372, 378, 127 S. Ct. 1769, 167 L.Ed. 2d 686 (2007). It is unnecessary
to treat the motions separately.

 2          The Walshes
describe the wall as curved and serpentine, but the photographs referenced
(JSOF, Exh. B) do not substantiate this assertion. (Dkt. 28-2) The fact is not
material, in any event.

3          The Walshes
assert additional facts that do not dispute the agreed facts set out above but
describe the events in different terms, such as that the west wall “fell down”
rather than moved downward or sloped. Patrick Walsh testified that the west
wall was no longer “standing” because it was not level and upright. Colleen
Walsh testified that the house is not “standing” because it is not level.
Patrick Walsh testified that the west wall “caved inward and downward,”
although he conceded that the structure is still standing. The Walshes also
proffer facts concerning actions of Travelers’ insurance adjuster, but because
these facts are not material to the disposition of the motions, they are not
set out here. To the extent the Walshes assertions are inconsistent with the
stipulated facts set out above, they must be disregarded. The additional facts,
in any event, do not create a genuine issue of material fact because the
interpretation of the meaning of an insurance policy and its provisions is a
question of law.

4          The parties
agree that the loss incident was abrupt and caused the property to be
uninhabitable.

5          This court
is not bound by the appellate court decisions if it has good reason to think
the Illinois Supreme Court would reject the appellate court’s interpretation of
Illinois law. U.S. Fid. & Guar. Co. v. Open Sesame Child Care Ctr.,
819 F. Supp. 756, 759 (N.D. Ill. 1993). It is unnecessary here to consider
whether Liaskos or Gulino would be rejected by the Supreme Court.

6          See Liaskos,
697 N.E.2d at 403 (citing Rubenstein v. Fireman’s Fund Ins. Co., 90
N.E.2d 289, 291, 339 Ill. App. 404 (1950)) (“In the cases wherein the peril
‘collapse of building’ has been construed by the courts in various types of
policies of insurance, it has been held that the entire building must lose its
distinctive character as a building before there is a collapse of the building
within the terms of the policy.”) (internal citations omitted). Because collapse
of a part of a building is covered by the Policy, one might wonder what
must be shown to demonstrate coverage where part has collapsed and part is
standing. Fortunately, that issue is not before this court.