{"id":892611,"date":"2017-07-26T12:18:33","date_gmt":"2017-07-26T18:18:33","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=892611"},"modified":"2017-07-26T12:18:33","modified_gmt":"2017-07-26T18:18:33","slug":"court-finds-split-underground-storage-tank-not-covered-collapse","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/court-finds-split-underground-storage-tank-not-covered-collapse\/","title":{"rendered":"Court Finds That Split in Underground Storage Tank is Not a Covered Collapse"},"content":{"rendered":"<p>Christopher Kendrick and Valerie A. Moore | <a href=\"http:\/\/www.hbblaw.com\/Court-Finds-That-Split-in-Underground-Storage-Tank-is-Not-a-Covered-Collapse-07-05-2017\/\" target=\"_blank\">Haight Brown &amp; Bonesteel LLP<\/a> | July 5, 2017<\/p>\n<p>In\u00a0<em>Tustin Field Gas &amp; Food v. Mid-Century Ins. Co.<\/em>\u00a0(No. B268850, filed 7\/3\/17), a California appeals court ruled that a split in an underground storage tank, caused by the tank sitting on a rock for years, was not a covered \u201ccollapse\u201d as a matter of law.<\/p>\n<p>Tustin Field owned a gas station in Palm Springs. The installer of the underground storage tanks did not follow the manufacturer\u2019s instructions to bury them in pea gravel or crushed rock. Instead, the installer just dug a hole, placed the tanks into that hole, and then covered them with \u201cnative soil\u201d containing rocks, boulders and other debris.<\/p>\n<p>The tanks were double-walled, steel with a fiberglass sheath. Sixteen years after installation, testing revealed that the fiberglass sheath on one tank was no longer intact. The tank was excavated and the fiberglass sheath was found to be cracked from the tank sitting on a nine-inch boulder. The insured paid to have the crack repaired and made a claim for the cost of excavating and repairing the tank.<\/p>\n<p>The Mid-Century policy generally excluded collapse, but provided \u201cAdditional Coverage for Collapse\u201d as follows:<\/p>\n<p>\u201c[Mid-Century] will pay for direct physical loss or damage to Covered Property, caused by a collapse of a building or any part of a building insured under this policy, if the collapse is caused by one or more of the following:&#8230; (b) Hidden decay;&#8230;(d) Weight of people or personal property;&#8230; (f) Use of defective material or methods in construction, remodeling or renovation if the collapse occurs during the course of the construction, remodeling or renovation. However, if the collapse occurs after construction, remodeling or renovation is complete and is caused in part by [an enumerated] cause of loss&#8230;, [Mid-Century] will pay for the loss or damage even if use of defective material or methods in construction, remodeling or renovation, contributes to the collapse.\u201d<\/p>\n<p>The subsection also specified that \u201cCollapse does not include settling, cracking, shrinkage, bulging or expansion.\u201d<\/p>\n<p>Mid-Century denied coverage and in the following bad faith lawsuit, the trial court granted summary judgment to the insurer while denying the insured\u2019s cross-motion for summary judgment.<\/p>\n<p>The trial court concluded that there was no covered cause of loss because there had been no \u201ccollapse.\u201d The court ruled that the insured had to show an \u201cactual\u201d collapse, but had failed to submit evidence that the tank \u201csuffered a complete change in structure and lost its distinctive character as an underground storage tank.\u201d The insured had shown, at most, that the tank was no longer usable under storage tank law because its outer sheath had been breached, but \u201ca mere impairment of [the tank\u2019s] structural integrity did not constitute an actual collapse.\u201d<\/p>\n<p>The appeals court affirmed. First, the court rejected the argument that if a structure is not usable it has necessarily collapsed. (Citing\u00a0<em>Sabella v. Wisler<\/em>\u00a0(1963) 59 Cal.2d 21 and\u00a0<em>Doheny West Homeowners\u2019 Assn. v. American Guarantee &amp; Liability Ins. Co.<\/em>\u00a0(1997) 60 Cal.App.4th 400.)<\/p>\n<p>The\u00a0<em>Tustin Field<\/em>\u00a0court also rejected the argument that \u201csubstantial impairment of structural integrity\u201d of a building constitutes collapse: \u201cThis is incorrect&#8230;. California law specifically holds to the contrary, at least where, as here, a policy excludes from collapse \u2018settling\u2019 and the like.\u201d (Citing\u00a0<em>Doheny West, supra<\/em>, and\u00a0<em>Stamm Theatres, Inc. v. Hartford Casualty Ins. Co.<\/em>(2001) 93 Cal.App.4th 531.)<\/p>\n<p>The\u00a0<em>Tustin Field<\/em>\u00a0court went on to reject a claim that ambiguity from the lack of a specific definition for collapse in the policy mandated interpretation in the policyholder\u2019s favor, as well as rejecting the insured\u2019s appeal to public policy.<\/p>\n<p>The\u00a0<em>Tustin Field<\/em>\u00a0court distinguished\u00a0<em>Doheny West, supra, Stamm Theatres, supra<\/em>, and\u00a0<em>Panico v. Truck Ins. Exchange<\/em>\u00a0(2001) 90 Cal.App.4th 1294, as all involving a broader meaning of collapse:<\/p>\n<p>\u201c[B]ecause the [Mid-Century] Policy excludes collapse from its definition of Covered Causes of Loss, and then creates a more limited \u2018exception to the exception\u2019 that re-extends coverage for collapse-related damage, but only \u2018for direct physical loss or damage to Covered Property, caused by a collapse of a building or any part of a building insured under this policy, if the collapse is caused by one or more\u2019 enumerated reasons. Because this revival of coverage for collapse does not include \u2018risks of\u2019 collapse (just collapse itself) and because the Policy nowhere covers damage \u2018involving collapse,\u2019 the broader definition of collapse discussed in\u00a0<em>Doheny West, Panico<\/em>, and\u00a0<em>Stamm Theatres<\/em>\u00a0is inapplicable.\u201d<\/p>\n<p>The\u00a0<em>Tustin Field<\/em>\u00a0court also dismissed the insured\u2019s use of expert testimony as inadmissible for the purpose of contract interpretation, and ruled that even if causation posed a factual dispute, it was not material to the result.<\/p>\n<p>This document is intended to provide you with information about insurance law related developments. The contents of this document are not intended to provide specific legal advice. This communication may be considered advertising in some jurisdictions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Christopher Kendrick and Valerie A. Moore | Haight Brown &amp; Bonesteel LLP | July 5, 2017 In\u00a0Tustin Field Gas &amp; Food v. Mid-Century Ins. Co.\u00a0(No. B268850, filed 7\/3\/17), a California appeals court ruled that a split in an underground storage tank, caused by the tank sitting on a rock for years, was not a covered&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/court-finds-split-underground-storage-tank-not-covered-collapse\/\">Continue reading <span class=\"screen-reader-text\">Court Finds That Split in Underground Storage Tank is Not a Covered Collapse<\/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":[164,3,9914],"tags":[9895,8672,23,10222],"class_list":["post-892611","post","type-post","status-publish","format-standard","hentry","category-construction-dispute","category-insurance-claims","category-insurance-coverage","tag-advise-consult","tag-collapse","tag-insurance-coverage","tag-underground-storage-tank","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>Court Finds That Split in Underground Storage Tank is Not a Covered Collapse - Advise &amp; 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