Court Opinion

ID: 9537968
Source: CourtListenerOpinion
Date Created: 2023-08-07 07:28:01.967961+00
Date Added: 2024-06-11T14:57:14.484937
License: Public Domain

NEWMAN, J.,
dissenting.
An external force caused plaintiffs’ extensive loss. Water, 63,500 gallons of it, flowed from a broken pipe at the residence on the adjacent uphill property and ran downhill under the earth to plaintiffs’ foundation.
Defendant has the burden to prove that the policy excludes coverage. Stanford v. American Guaranty Life Ins. Co., 280 Or 525, 527, 571 P2d 909 (1977). The first pertinent exclusion (“clause 1”) provides:
“1. We do not insure for loss to the property described in Coverage A either consisting of, or directly and immediately caused by, one or more of the following:
* * * *
“(i) settling, cracking, shrinking, bulging, or expansion of pavements, patios, foundation, walls, floors, roofs, or ceilings;
“However, we do insure for any ensuing loss from items a. through j. unless the loss is itself a Loss Not Insured by this Section.”
The second pertinent clause (“clause 2”) provides:
“2. We do not insure under any coverage for loss (including collapse of an insured building or part of a building) which would not have occurred in the absence of one or more of the following excluded events. We do not insure for such loss regardless of: a) the cause of the excluded event; or b) other causes of the loss; or c) whether other causes acted concurrently or in any sequence with the excluded event to produce the loss:
“a * * *
“b. Earth Movement, meaning any loss caused by, *407resulting from, contributed to or aggravated by earthquake; landslide; mudflow; sinkhole; erosion; the sinking, rising, shifting, expanding or contracting of the earth.”
As to clause 1, the majority does not assert that the loss was caused by settling or cracking.1 Clearly the loss was caused by the water from the neighbor’s broken pipe. Rather, the majority argues that the loss is excluded because it consists of settling or cracking and that the words plainly mean any settling or cracking. The majority’s argument, however, depends on the meaning of the words “settling” and “cracking.”
It is hard to imagine that plaintiffs could have thought, when they purchased the policy, that settling or cracking mean what the majority says. The ordinary purchaser would not have expected that clause 1 excludes settling or cracking from application of an artificial external force, such as the 63,500 gallons of water that escaped from the neighbor’s property. In the context of both clause 1 and the entire policy, the ordinary insurance purchaser would have expected that the clause excludes only settling and cracking due to changes from natural causes in the normal course of events, such as expansion or contraction due to temperature changes. That, to the ordinary purchaser, would be the plain meaning of the words. Moreover, “an insurance policy ‘should be construed * * * in the sense in which the insured had reason to suppose it was understood.’ ” Growers Refrig. Co. v. Amer. Mtr. Ins., 260 Or 207, 215, 488 P2d 1358 (1971), quoting Borglund v. World Ins. Co., 211 Or 175, 181, 315 P2d 158 (1957). As the drafter of the policy, defendant could have explicitly explained in the policy that it meant otherwise. It did not.
Moreover, if, as the majority argues, the clause excludes any settling or cracking regardless of the cause, the exclusion would swallow much of the coverage that plaintiffs reasonably supposed that they had purchased. For example, the policy would not cover settling or cracking caused by fire or by a vehicle crashing into the house. If the language means *408what the majority says, it would substantially defeat the purpose of its policy, see Clark Motor Co. v. United Pac. Ins. Co., 172 Or 145, 151, 139 P2d 570 (1943), and would afford “less than the substantial equivalent of the coverage” under the statutorily mandated standard fir§ insurance policy. ORS 743.607(1); ORS 743.609.
The majority asserts that the plain meaning of clause 1 is to exclude coverage for any settling or cracking; I assert that its plain meaning excludes only settling and cracking that occur from natural causes in the normal course of events. The majority reads clause 1 in its broadest sense; I would read it narrowly. An ambiguity exists if a clause is reasonably susceptible of more than one interpretation. See Western Fire Insurance Co. v. Wallis, 289 Or 303, 308, 613 P2d 36 (1980). The terms of an insurance policy are ambiguous “when they could reasonably be given a broader or narrower meaning, depending upon the intention of the parties in the context in which [the terms] are used by them.” Shadbolt v. Farmers Insur. Exch., 275 Or 407, 411, 551 P2d 478 (1976).
When ambiguity exists in an insurance contract, we should construe it against the insurer, Totten v. New York Life Ins. Co., 298 Or 765, 771, 696 P2d 1082 (1985), and favor finding that the policy covers the insured. Shadbolt v. Farmers Insur. Exch., supra, 275 Or at 411. As stated in Totten, “We interpret the terms of an insurance policy according to what we perceive to be the understanding of the ordinary purchaser of insurance.” (Emphasis supplied). 298 Or at 771. The understanding of the ordinary purchaser is precisely the one that I have described. Accordingly, even if clause 1 is ambiguous, the clause would not apply here.
The majority does not even take up defendant’s argument that clause 2 excludes plaintiffs’ loss because “earth movement” caused plaintiffs’ loss. The argument is without merit. The policy provides that the “excluded event” is “earth movement.” It defines “earth movement” to mean “any loss caused by, resulting from, contributed to or aggravated by earthquake; landslide; mud flow; sink hole; erosion; the sinking, rising, shifting, expanding or contracting of the earth.” Those all are natural phenomena. As the policy defines “earth movement,” it does not include a movement artificially caused *409by 63,500 gallons of water flowing from a broken pipe on a neighbor’s property onto plaintiffs’ land.2
The introductory paragraph of clause 2 does not change my result. It states that the exclusion applies “regardless of the * * * cause of the excluded event.” (Emphasis supplied.) The language, however, must be read together with the definition of the excluded event — earth movement —which the policy defines in terms of particular natural phenomena. What happened here was not an “excluded event.”
Because neither clause 1 or clause 2 applies, I would hold that the court erred when it granted summary judgment for defendant and denied plaintiffs’ motion for summary judgment on liability and would reverse and remand with instructions to enter judgment for plaintiffs on liability.
Rossman, Deits and Riggs, JJ., join in this dissent.

 When we refer to “settling or cracking,” we are referring to “settling, cracking, shrinking, bulging, or expansion” referred to in clause 1.

 Courts in other jurisdictions have construed comparable “earth movement” exclusionary clauses to refer to natural events. See, e.g., Peach State Uniform Service, Inc. v. American Ins. Co., 507 F2d 996 (5th Cir 1975); Broome v. Allstate Ins. Co., 144 Ga App 318, 241 SE2d 34 (1977); Barash v. Insurance Co. of North America, 114 Misc 2d 325, 451 NYS 2d 603 (1982).