United States: The Decks are Collapsing

FACTS:

George decided to remove and repair two decks at his Palos Verdes Estates home. He decided that after being told by a contractor that he had discovered severe deterioration in the framing members supporting the decks. George believed his decks were in a state of imminent collapse.

After spending $87,000 to repair the decks, George submitted a claim to State Farm, his homeowner’s insurer. His State Farm policy insured for direct physical loss to covered property involving the "sudden, entire collapse of" the building or any part of the building. "Collapse" was defined to mean: "Actually fallen down or fallen into pieces."

Upon receipt of the claim, State Farm investigated. It denied the claim pointing out to George that his decks had not "actually fallen down . . . into pieces" and that byrepairing the decks prior to submitting the claim, he had prejudiced State Farm bydepriving it of the opportunity to inspect the damage.

George sued State Farm for breach of contract and bad faith. Superior Court Judge Soussan G. Bruguera held that public policy dictates that policyholders are entitled to coverage "for collapse as long as the collapse is imminent, irrespective of policylanguage." (Emphasis in original.)

On appeal the Court of Appeals filled four pages with feel-good newspeak, and then without analysis, without citation to a statute, without citation to a regulation, without citation to a legal authority, and without citation to a single legal opinion, announced that "public policy" mandates that State Farm provide coverage for "imminent collapse."

1. The plain language is unambiguous.
2. The plain language is susceptible of only one reasonable interpretation.
3. Under no stretch of the imagination does "actually" mean "imminently".
4. The contractual language controls.
5. "We therefore conclude that notwithstanding the language of the collapse provision, public policy mandates that State Farm afford Mike coverage for the imminent collapse of his decks."

Nothing I can say can adequately convey the monstrous implications of this decision. These three judges have arrogated to themselves the power to declare public policy, a power that resides with the Legislature. They have usurped the power to review and approve insurance forms, a power that resides with the Insurance Commissioner. The opinion is an affront to our fundamental notion of the separation of powers inherent in our tripartite form of government.

But on the other hand, my contractor said my east deck was going to collapse under the weight of the Guiness. So he fixed it and gave me a bill for $11,000. Where did I put my homeowner’s policy?

Citation to the case: Rosen v. State Farm Gen. Ins. Co., 98 Cal. App. 4th 1322 (2002).