28 Fla. L. Weekly D546a
Insurance — Commercial all-risk — Exclusions — Damages due to settling, cracking, shrinking or expansion — Term “settling” as used in exclusions clause connoted only normal settling, not type of subsidence that occurred here as result of decay of construction debris which, unbeknownst to insured or insurer, was buried in ground beneath the home
NATIONWIDE MUTUAL INSURANCE COMPANY, Appellant, v. SHEILA BATES, Appellee. 1st District. Case No. 1D02-0399. Opinion filed February 21, 2003. An appeal from the circuit court for Duval County. Charles O. Mitchell, Jr., Judge. Counsel: John F. Fannin of Dore, Lanier, Noey & Fannin, Chartered, Jacksonville; and Rhonda B. Boggess of Taylor, Day & Currie, Jacksonville, for Appellant. Seth L. Rothstein of Adams, Rothstein & Siegel, Jacksonville, for Appellee.
(BOOTH, J.) This appeal arises from a claim on a commercial all-risk insurance policy. We affirm the trial court’s ruling in favor of the insured, because the settling that damaged the structures on the insured’s property was not the type of normal settling connoted by the exclusions clause of the policy.
Appellant issued a commercial all-risk insurance policy to Appellee on her rental home. Unbeknownst to either Appellant or Appellee, construction debris was buried in the ground beneath the home. When the debris began to decay, it caused the ground to slowly cave in and, in turn, the structures on the property shifted, sustaining significant damage. Appellee denied coverage, and Appellant sued on the policy.
The trial court ruled in favor of Appellee and awarded damages of $139,533.48. It rejected Appellant’s argument that the claim was barred under an exclusions clause that stated that the policy did not cover damages due to settling, cracking, shrinking or expansion.1 It further ruled that the exclusion was ambiguous under the facts of the case.2 While we do not agree with the trial court that the term “settling” was ambiguous, we nonetheless affirm the ruling below, because the trial court properly concluded that the policy did not bar coverage for the damage sustained in this case.
The term “settling” as used in the exclusions clause connotes only normal settling, not the type of subsidence that occurred here. See Barash v. Insurance Co. of North America, 114 Misc.2d 325, 328 (N.Y. Sup. 1982) (explaining that, as applied to houses, “settling” connotes a building initially coming to rest after construction, not dramatic breaks years later caused by deterioration of organic matter under the house); Winters v. Charter Oak Fire Insurance Co., 4 F. Supp. 2d 1288, 1295 (D. N.M. 1998). Therefore, this all-risk policy did not exclude coverage for damage from excessive subsidence due to the decay of buried debris. The fact that the collapse occurred gradually does not bring the damage within the settlement exclusion. We affirm the grant of coverage, as well as the award of damages below.
AFFIRMED. (ALLEN, C.J., concurs; BARFIELD, J., dissents with written opinion.)
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1Below, Appellant ostensibly defended on both this exclusion and the exclusion for damage due to rust, corrosion, fungus, decay, deterioration, or hidden or latent defect. But at trial, Appellant focused solely on the settling exclusion. Likewise on appeal Appellant concentrates on the settling clause.
2The trial court also held that the exclusion for damage due to rust, corrosion, fungus, decay, deterioration, or hidden or latent defect was ambiguous.
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(BARFIELD, J., dissenting.) I must disagree with the majority. Having concluded that the term “settling” in the policy is not ambiguous, the majority nevertheless decides it must connote that only some kinds of settling are excluded. It appears that the extent of connoting is in direct proportion to the quantum of dollars involved. There is no precedent for rewriting this policy to define “settling” as that which is connoted to this court.
In Barash v. Insurance Co. of North America, 451 N.Y.S. 2d 603 (1982), the New York court reversed a summary judgment for the insurer, finding that the collapse of the foundation which occurred “cannot come within the meaning of the word ‘settling’ in the exclusionary clause” of the policy. In Winters v. Charter Oak Fire Ins. Co., 4 F.Supp. 2d 1288 (D. N.M. 1998), the court denied a motion for summary judgment because the insurer did not show that undisputed facts established settling as the sole cause of damage. Neither of these decisions supports the majority opinion that the court can connote what settling is covered and what settling is excluded.
This court would be better served following the rationale of State Farm Fire and Cas. Co. v. Castillo, 829 So. 2d 242 (Fla. 3d DCA 2002), wherein the court refused to “completely ignore the unambiguous language” in a homeowner’s policy, and stated: “While it is certainly understandable that the [insureds] may have reasonably expected their homeowner’s policy to cover the damages in question, State Farm correctly points out that it is the policy’s terms which define the coverage, not the insureds’ reasonable expectations.” Id. at 246-47.
