{"id":890261,"date":"2016-07-18T12:00:10","date_gmt":"2016-07-18T18:00:10","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=890261"},"modified":"2016-07-18T12:00:10","modified_gmt":"2016-07-18T18:00:10","slug":"more-common-sense-coverage-for-collapse-requires-more-than-an-engineers-finding-of-substantial-impairment","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/more-common-sense-coverage-for-collapse-requires-more-than-an-engineers-finding-of-substantial-impairment\/","title":{"rendered":"More Common Sense: Coverage for Collapse Requires More Than an Engineer\u2019s Finding of Substantial Impairment"},"content":{"rendered":"<p>Craig Bennion | <a href=\"http:\/\/propertyinsurancelawobserver.com\/2016\/07\/15\/more-common-sense-coverage-for-collapse-requires-more-than-an-engineers-finding-of-substantial-impairment\/\" target=\"_blank\">Property Insurance Law Observer<\/a> | July 15, 2016<\/p>\n<p>In February this blog commented on Washington State\u2019s newly-adopted definition of \u201c<a href=\"https:\/\/www.myconstructionexpert.com\/blog\/court-defines-collapse\/\" target=\"_blank\">collapse<\/a>\u201d in property insurance policies that contain no specific definition of the term. (Observer, February 8, 2016, <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/common-sense-prevails-state-of-collapse-nonexistent-thirteen-years-before-discovery-of-decay\/\" target=\"_blank\"><i>Common Sense Prevails:\u00a0 State of Collapse Nonexistent Thirteen Years before Discovery of Decay<\/i><\/a>)\u00a0 At issue was the building owner\u2019s attempt to tap its property policy\u2019s coverage for collapse when hidden decay, although severe, did not result in the building falling down. Under Washington\u2019s new definition, the Ninth Circuit Court of Appeals found no collapse of a condominium building that remained in use and occupied seventeen years after the insurance policy expired and severe decay allegedly developed. <i>Queen Anne Park Homeowner\u2019s Ass\u2019n v. State Farm,<\/i> 633 F. Appx. 415 (9<sup>th<\/sup> Cir. 2016).<\/p>\n<p>On July 7, 2016, the federal court for the Western District of Washington issued its decision in another collapse case, applying the new definition. American Economy Insurance Company insured the Masters Apartments in Seattle with annual policies from 1999 to 2005. The first three policies provided coverage for collapse caused by hidden decay, but did not define \u201c<a href=\"https:\/\/www.myconstructionexpert.com\/blog\/construing-collapse-under-a-homeowners-insurance-policy\/\" target=\"_blank\">collapse<\/a>.\u201d Significant decay to the building\u2019s rim joists was discovered in 2014. Because rot and decay were excluded from coverage, the owner sought coverage for collapse. American Economy hired a structural engineer who, after investigation, concluded that some of the rim joists suffered from \u201csubstantial structural impairment,\u201d meaning that, according to the engineer, they did not meet the building code, and the building could be classified by a building inspector as dangerous. He also opined that several joists had reached substantial structural impairment between 1999 and 2002.<span id=\"more-1387\"><\/span><\/p>\n<p>American Economy denied coverage and filed a declaratory judgment action in federal court. In a summary judgment motion, it argued that the Masters Apartments, which remained standing and occupied in 2014 when decay was discovered, had not reached a state of collapse and coverage did not apply. The federal court agreed and granted the motion. <i>American Economy Ins. Co. v. CHL, LLC,<\/i> C15-899-RSM, 2016 U.S. Dist. LEXIS 88286 (W.D. Wash., July 7, 2016).<\/p>\n<p>In the <i>Queen Anne Park<\/i> case, the Washington Supreme Court defined \u201ccollapse\u201d as \u201csubstantial impairment of the structural integrity of a building\u201d that renders the building \u201cunfit for its function or unsafe.\u201d\u00a0 The Washington court defined \u201cstructural integrity\u201d as \u201ca building\u2019s ability to remain upright.\u201d <i>Queen Anne Park Homeowner\u2019s Ass\u2019n v. State Farm,<\/i> 183 Wn.2d 485, 352 P.3d 790 (2015). The court in <i>CHL <\/i>noted that the meaning of collapse used by American Economy\u2019s engineer was based on the building code and whether an inspector would declare the structure dangerous. But that\u2019s not the standard established in <i>Queen Anne Park. <\/i>The federal court concluded that the structural integrity of the building, that is, its ability to remain upright, was not compromised in 2002, when American Economy\u2019s coverage for undefined collapse ended, since the building remained upright and in use twelve years later when the rot was discovered. Therefore, the Masters Apartments had not reached a state of collapse between 1999 and 2002 and American Economy correctly denied coverage.<\/p>\n<p>The federal court\u2019s application of the collapse definition is noteworthy in that the court carefully considered each part of the definition given by the Washington Supreme Court. The <i>CHL\u00a0<\/i>decision is a hopeful sign that \u201c<a href=\"https:\/\/www.myconstructionexpert.com\/blog\/court-confirms-no-duty-to-reimburse-for-prophylactic-repairs-prior-to-actual-collapse\/\" target=\"_blank\">collapse<\/a>\u201d in a property policy will return to its traditional, common sense meaning. It should not apply to a structure that remains standing and in use, even if it also has sustained hidden decay or other excluded damage.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Craig Bennion | Property Insurance Law Observer | July 15, 2016 In February this blog commented on Washington State\u2019s newly-adopted definition of \u201ccollapse\u201d in property insurance policies that contain no specific definition of the term. (Observer, February 8, 2016, Common Sense Prevails:\u00a0 State of Collapse Nonexistent Thirteen Years before Discovery of Decay)\u00a0 At issue was&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/more-common-sense-coverage-for-collapse-requires-more-than-an-engineers-finding-of-substantial-impairment\/\">Continue reading <span class=\"screen-reader-text\">More Common Sense: Coverage for Collapse Requires More Than an Engineer\u2019s Finding of Substantial Impairment<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[3],"tags":[9420,412,306],"class_list":["post-890261","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-coverage-for-collapse","tag-engineering","tag-washington","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>More Common Sense: Coverage for Collapse Requires More Than an Engineer\u2019s Finding of Substantial Impairment - Advise &amp; 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