Panico v. Truck Insurance Exchange
2001 Cal. Daily Op. Serv. 6348, 90 Cal. App. 4th 1294, 109 Cal. Rptr. 2d 638 (2001)
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Rule of Law:
For an insurance policy covering damage from the "collapse of a building or any part of a building," a claim based on an actual collapse of an interior part, such as ceiling tiles, presents a factual question for a jury and cannot be dismissed on a motion for nonsuit based on an opening statement, as it is plausible a reasonable person could characterize the event as a collapse.
Facts:
- Ronald and Patty Panico, owners of Travis Electronics, held a property insurance policy with Truck Insurance Exchange.
- The policy covered property loss only if it was caused by the 'collapse of a building or any part of a building.'
- Following four days of rain, employees at Travis Electronics discovered water damage in the company's second-floor storeroom.
- Four to six two-by-two-foot acoustical ceiling tiles had fallen from the ceiling, leaving an opening through which the roof was visible.
- A hole, which an owner estimated by holding her thumb and forefinger about half an inch apart, was visible in the roof above the fallen tiles.
- Travis Electronics submitted a claim for the resulting property damage to Truck Insurance Exchange.
- Truck Insurance Exchange denied the claim, asserting the event did not constitute a 'collapse' under the policy's terms.
Procedural Posture:
- Ronald and Patty Panico, along with their corporation Travis Electronics, sued Truck Insurance Exchange in a California trial court for denying an insurance claim.
- The trial court granted summary judgment in favor of Truck Insurance Exchange on the personal claims of the Panicos, and a judgment of dismissal was entered against them.
- The claims of Travis Electronics proceeded toward a jury trial.
- Before trial, the judge held a conference and invited Travis's attorney to make an offer of proof of its best case.
- Following the offer of proof, Truck Insurance Exchange made a motion to dismiss, which the court treated as a motion for nonsuit on the opening statement.
- The trial court granted the motion, entering judgment in favor of Truck Insurance Exchange.
- Travis Electronics appealed the judgment resulting from the nonsuit to the California Court of Appeal.
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Issue:
Does an offer of proof stating that four to six ceiling tiles fell due to water from a hole in the roof allege sufficient facts to constitute a 'collapse' of 'any part of a building' under an insurance policy, thereby precluding a nonsuit on the plaintiff's opening statement?
Opinions:
Majority - Sills, P. J.
Yes. An offer of proof showing that several ceiling tiles fell due to a leak is sufficient to survive a motion for nonsuit because a reasonable trier of fact could find this event constitutes a 'collapse' of a 'part' of the building. The trial court erred by applying the 'imminent collapse' standard, which requires proof of a significant structural defect, to a case involving an 'actual collapse.' The imminent collapse standard from Doheny West applies only when no collapse has yet occurred and the insured claims the structure is in danger of falling. Here, parts of the building—the ceiling tiles—had actually fallen. When reviewing a nonsuit on an opening statement, all inferences must be drawn in favor of the plaintiff. A reasonable inference is that the falling of six ceiling tiles could be characterized by an ordinary person as a 'collapse' of a part of the building, making it a question for the trier of fact, not a matter of law for the judge to decide at this stage.
Analysis:
This decision clarifies the legal distinction between claims for 'actual collapse' and 'imminent collapse' under property insurance policies. It establishes that the heightened standard requiring proof of a 'structural defect' applies only to 'imminent collapse' scenarios, not when a part of the building has already fallen. The ruling protects insureds by ensuring that whether an event qualifies as an 'actual collapse' is treated as a factual question for a jury rather than a legal one a judge can dismiss preemptively. Furthermore, the opinion serves as a strong cautionary note to trial courts against using procedural shortcuts, like nonsuits on opening statements, as the appellate standard of review heavily favors the non-moving party and increases the likelihood of reversal.
