In Tripodi v. Universal North America Ins. Co., 2013 U.S. Dist. LEXIS 181807 (D.N.J., December 31, 2013), The United States District Court for the District of New Jersey granted an insured’s motion for summary judgment on the basis that damage to the insured’s basement wall fell within the policy’s definition of “collapse,” because it constituted “an abrupt falling down of caving in of a building or any part of a building.”
In Tripodi, the insureds were constructing a drainage system in their basement. As part of the construction process, they jackhammered the concrete slab flooring of the basement around the perimeter where the floor met the foundation walls. After the concrete slab floor was broken up and removed, the insureds further excavated the foundation in order to install the drainage system. One evening while this process was ongoing, the insureds were awoken by a load noise coming from their basement. Upon investigation, it was observed that the basement wall had moved approximately two feet inward, the sheetrock was broken and the insureds were able to see outside of the house. Emergency shoring was installed and the structure was declared uninhabitable. Thereafter, the insureds reported the claim to Universal which conducted an investigation and denied coverage. In response the insureds initiated a two-count complaint sounding in breach of contract and bad faith and the parties cross-moved for summary judgment.
With respect to the insureds’ breach of contract count, the issue before the Tripodi court on summary judgment was whether the damage to the insured’s basement wall constituted a “collapse” under the policy. The court concluded that it did and granted the insureds’ motion for summary judgment. The court held that the damage fell within the policy’s definition of “collapse,” because it constituted “an abrupt falling down or caving in of a building or any part of a building.” Specifically, the court found that (1) the fact that the insureds were awoken by a loud noise which was later determined to be the result of the movement of the basement wall satisfied the abruptness requirement of the policy’s collapse definition and (2) the damage to the insured’s basement wall, i.e. the wall moving and shifting inward from its base allowing for downward movement of the wall and causing pieces of cinderblock to break and fall down, constituted “caving in” of a “part of a building” as those terms were used in the policy.
With respect to the insured’s bad faith count, the Tripodi court found that neither parties’ motion presented sufficient evidence for the Court to determine whether Universal acted with “knowledge or reckless disregard of the lack of a reasonable basis for denying the claim.” Consequently, the court denied both parties’ motions for summary judgment with respect to the bad faith count.