Yes. The insurance company must pay for the damages. Even though the policy excluded 'settling,' the court said the settling wasn't the real start of the problem. The real cause was the broken sewer pipe. The house was perfectly fine for years before the pipe broke. The broken pipe was like the first domino that knocked over all the others. Since the broken pipe (which was not on the exclusion list) started the whole mess, the insurance company is responsible for fixing all the damage that came after, including the settling.

Yes, the builder is responsible because he should have checked the ground properly before building. Because he didn't, the house got damaged. It's important that builders are careful to prevent problems like this in the future. We look at things like whether the builder could have guessed that something bad might happen, how sure we are that the homeowners were hurt by this, and how closely the builder's mistakes are connected to the damage.

As for the insurance, we think the insurance company should pay. Even though the policy didn't cover damage from the ground settling, the real cause of the problem was the broken sewer pipe. In insurance cases, we look at what started the chain of events that led to the damage. Here, it was the broken pipe that started everything, not just the ground settling. The house was fine for four years before the pipe broke, which shows that the pipe breaking was the main cause of the problem.

We don't agree with the insurance company's argument about a specific law (Insurance Code section 532). We think this law needs to be understood along with another law (section 530) that says insurance companies have to pay when the main cause of the damage is something the insurance covers.

So, we're saying the builder (Wisler) has to pay for the damage, and we're sending the case back to a lower court to decide how much the insurance company (National Union) needs to pay.

Yes. An 'all physical loss' insurance policy excluding loss by 'settling' covers damages where a non-excluded peril was the efficient proximate cause of the loss. The court must identify the 'efficient cause—the one that sets others in motion' to determine coverage. Here, the house had remained stable for four years with no appreciable damage until the sewer pipe broke. The broken pipe, a non-excluded peril attributable to the negligence of a third party (the builder), was the 'predominating or moving efficient cause' that introduced large amounts of water into the soil, triggering the rapid subsidence. The court reasoned that 'settling' was not the initiating cause but rather a later effect in the chain of causation. Citing the principle from cases like *Brooks v. Metropolitan Life Ins. Co.*, recovery is permissible if an insured peril sets in progress the chain of events leading to the loss, even if an excluded peril contributes. Therefore, because the covered peril of third-party negligence (leading to the broken pipe) was the proximate cause, the resulting damage is covered despite the 'settling' exclusion.

Yes, the builder is liable for negligence because he failed to conduct necessary soil tests or inspections before and during construction, which would have revealed the unsuitability of the soil for building. This negligence directly led to the damage sustained by the Sabellas' home. The foreseeability of harm, the duty of care owed by the builder to prospective homeowners, and the policy of preventing future harm all support this conclusion. We apply the principles from Stewart v. Cox, which balance various factors to determine liability for negligence causing harm to property. These factors include the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm, the degree of certainty of injury, the closeness of connection between the defendant's conduct and the injury, and the policy of preventing future harm. All these factors support holding Wisler liable.

Regarding the insurance claim, we find that National Union is liable because the rupture of the sewer line, attributable to the negligence of a third party, rather than settling, was the efficient proximate cause of the loss. While the policy excluded loss by settling, the broken sewer line emptied waste water into the loose fill, setting in motion the forces leading to settlement. In insurance cases, where there is a concurrence of different causes, the efficient cause—the one that sets others in motion—is the cause to which the loss is to be attributed. The virtual absence of subsidence damage in the prior four years clearly indicates that the broken pipe was the predominating or moving efficient cause of the loss.

We reject National Union's argument based on Insurance Code section 532, as it must be read in conjunction with section 530, which provides for liability of the insurer where the peril insured against proximately resulted in the loss. We interpret section 532 to refer to the peril proximately causing the loss, not any peril in the chain of causation. Therefore, the judgment is affirmed as to Wisler and reversed as to National Union.

Sabella v. Wisler

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