Purported Collapse Not a Covered Event

 

In Rapp B. Properties, LLC v. RLI Ins. Co., 2009 WL 2927484 (N.Y.A.D. 1 Dept.), an insured building owner sought indemnification under the insurers' policies for damage to its building's south wall as a result of collapse, an allegedly covered peril. The complaint cited damage consisting of “severe cracking, bulging, splaying and displacement of the exterior brick facade.” The insurers denied coverage, asserting the damage was “due to wear & tear and gradual deterioration not collapse.”

The lower court denied the parties' respective motions for summary judgment and the parties appealed. The Supreme Court of New York, Appellate Division, determined that regardless of the cause or causes of the damage, it was error for the court to deny the insurers' motion, because there was no collapse within the meaning of the policies.

 

The plaintiff's managing member testified that the building and its south wall were still standing three months after the damage was observed. The court explained that, standing alone, such testimony sufficed to belie any claim that the wall's collapse was “abrupt” within the meaning of the additional coverage provisions. Also, the manager described the condition as hidden “decay,” a phenomenon which, by definition, did not occur abruptly.

 

And, although the plaintiff's architect observed displacement of brick masonry units and opined that there was an “imminent risk that the wall would completely collapse,” additional coverage provisions in the policies required the collapse to be “abrupt” and the purported “imminent risk” of collapse was expressly excluded from the definition of abrupt.

 

The court held that there existed, however, a triable issue of fact as to whether the purported collapse was caused by the installation of the outdoor sign. Thus, the opinion was affirmed as modified.