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In December 2012, the Joy Tabernacle-The New Testament Church (Church) in Flint, Michigan, sustained damage in its sanctuary when a 30-foot high ceiling collapsed. The Church reported the damage to its insurer. Following an investigation of the cause of the collapse, which the insurer’s inspector determined was attributable to the poor design of the roof, the insurer denied coverage.

A contractor retained by the Church submitted a written opinion that the failure was caused by snow and ice damming, rather than poor maintenance or the age of the 127-year-old structure. However, the insurer’s inspector reviewed weather data and found that the conditions were inconsistent with the conclusion that snow caused the collapse. The insurer maintained its reliance on the policy’s exclusions for damage due to settling, cracking, sinking and expansion and faulty design, prompting the Church to sue for alleged failure to pay covered losses and violation of Michigan’s Uniform Trade Practices Act.

The insurer acknowledged that there were no questions about the Church’s water loss claim, but moved for partial summary judgment as to liability on the collapse damage. In opposition to the insurer’s motion, the Church argued that the policy contained an extension of coverage provision, which included coverage for collapse.

The U.S. District Court for the Eastern District of Michigan found there was no evidence that any of the specified perils in the extension provision caused the loss. Moreover, the court ruled, even if one or more of the listed perils contributed in some fashion to the collapse, the exclusions for sinking, cracking and faulty design barred coverage. The court relied on expert opinions presented by the insurer that the loss was caused by the bowing of walls and roof trusses as a result of the original building design. The Church argued that hidden decay, which was covered by the extension coverage, caused or contributed to the loss. Although this was one of the perils for which the policy afforded coverage in the extension endorsement, the court found no evidence that hidden decay was a cause of the collapse. Further, the court rejected the idea that the collapse extension provision trumped the general exclusions. Because none of the listed perils in the extension endorsement was the cause of the damage, the insurer was granted summary judgment in its favor. In an August 1, 2014, order, the court reiterated its ruling in response to the Church’s motion for reconsideration.

The ruling on the motion for summary judgment can be found at Joy Tabernacle-The New Testament Church v. State Farm Fire and Casualty Company, 2014 U.S. Dist. LEXIS 9747 (July 18, 2014).

Tressler Comments

The ruling illustrates the role of investigations and expert opinions regarding causation. Each side relied on contractors and engineers regarding the cause of the collapse. In addition, the theory of concurrent causation was rejected under Michigan law. The provisions of the specific policy, state’s law and causes of loss can significantly impact coverage.