Court Opinion

ID: 4712052
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:37:47.415683+00
Date Added: 2024-06-11T08:07:11.704304
License: Public Domain

Madsen, J.
(dissenting) — The majority rewrites the suit limitation clause in Allstate Insurance Company’s policy to allow a cause of action against the insurer long after the insured knows or should know that a covered loss has occurred — despite the one-year limitation period in the clause. The majority’s construction of the suit limitation language “after a loss occurs” as meaning after a loss is over, together with its conclusion that a loss is not over while ongoing damage continues, flies in the face of the policy’s coverage provisions.
The majority claims, though, that it is simply refusing to rewrite the policy language to provide for a discovery rule that the parties did not expressly include. Despite this innocuous sounding disclaimer, the majority, by its holding, converts the insurance coverage at issue from collapse coverage to maintenance and repair coverage, regardless of the fact that these parties plainly did not bargain for upkeep insurance. Rather than routine, everyday foreseeable maintenance costs, the parties contracted for insurance covering fortuitous losses, and specifically contracted for coverage for collapse losses resulting from hidden decay. Instead of construing this policy in a manner that remains true to the parties’ fundamental bargain, the majority construes the policy so that the insured obtains the benefit of a bargain for which it has not paid — maintenance and repair insurance — while the insurer is denied the benefit of its bargain — receipt of premiums for coverage for collapse *146losses, with a one-year suit limitation period.
This fundamental alteration of the insurance contract should not be accepted under the guise of interpretation. Insureds are, without question, entitled to the insurance coverage for which they pay. But the insured is not the only party to the contract; both parties to the contract are entitled to fair treatment. This court should not encourage insureds to deliberately wear blinders so as to avoid seeing what is there to see. The unfortunate result of the majority’s analysis, however, is that an insured is well advised to ignore any notice of ongoing decay damage, save the high cost of maintenance, and wait until the building actually collapses, i.e., falls down, or until the decay itself is finally visible to the eye. This result is contrary to the fundamental principle that insurance coverage is intended to indemnify for fortuitous events, not events which the insured anticipates and can avoid. The facts here present a classic case of an insured who, preferring to avoid costly repairs, simply waits until its building is in a state of collapse in order to shift the cost associated with rot, an uncovered loss, onto its insurance carrier.
Allstate has submitted abundant evidence that the insured had notice of problems with the structural integrity of its buildings due to rot. Panorama Village Condominium Owners Association Board of Directors (Panorama) brought suit in August 1996. By February 1995, 18 months earlier, entryway overhangs were in such bad shape that a contractor had to install temporary supports to keep them from collapsing. Thus, at a minimum, Panorama knew 18 months before suit that shoring was needed to avoid collapse of portions of the buildings. In addition, Allstate submitted evidence tending to show that problems arose shortly after the condominium complex was constructed which should have put Panorama on notice of damage due to decay. This evidence includes: Homeowners began to notice leaks in the early 1980s, and by 1983 Panorama knew of numerous roof leaks and leaks in and around decks. Experts told Panorama that water was getting into *147walls. Although some of the leaks were repaired, some old leaks continued and new ones occurred. In 1983, a contractor making repairs opened some exterior walls and found that structural members were impaired by decay. In 1989, Panorama had to rebuild stairs and replace structural timbers damaged by rot. Again in 1990, rot required rebuilding walls in two buildings. A 1991 inspection showed leaks and dry rot in several decks and rot in exterior trim. Panorama was warned that further structural damage would occur if leaks were not repaired. From 1993-95 a contractor making some repairs inspected several areas of the complex and found that many decks had rot and water damage, and found decay in the interior of some buildings. He reported instances of rot and structural impairment and he bid on repair work, but Panorama authorized only about one-fourth of the repairs he indicated were needed. In February 1994, the homeowners’ association board discussed rotting decks, but authorized only some repairs. By August, the contractor had to remove and rebuild adjoining walls in four units to remove rot; he also repaired decks and rotted beams and portions of stairways. He continued to report instances of structural impairment and decay, and he met with the board to explain the problem. In October 1994, an architect inspected the complex and reported conditions causing trapped water and decay. Walls and adjoining structures around decks were in various stages of decay, and there was rot in deck subfloorings and girder beams of some carports. The architect also reported entryway overhangs which were severely rotted and in need of immediate repair.
There is considerable evidence that Panorama knew or should have known of structural problems due to decay well over a year before it brought suit, and that Panorama put off making needed repairs. Nevertheless, the majority concludes Panorama’s suit against Allstate is not time-barred because no building had actually fallen down, and, the majority says, decay was concealed from view.
I dissent.
*148Suit Limitation Clause
Under the Allstate policy, losses due to collapse are not covered, except as provided in the policy under “Collapse — Parts One and Two.” Clerk’s Papers (CP) at 821. Under “Collapse — Parts One and Two,” the policy provides that “risk of direct physical loss involving collapse of a covered building or any part of a covered building” is covered if caused by certain enumerated things, including “hidden decay.” Id. Plaintiff Panorama sought coverage under the “collapse provision” for damage caused by “hidden decay.” Allstate claims that suit is barred by the suit limitation provision in its policy which states that the insured agrees to bring any action against Allstate “within one year after a loss occurs.” CP at 855.
The issue is when the loss occurred for purposes of the suit limitation clause. The Court of Appeals held that a discovery rule applies and the one-year period commences when Panorama knew or should have known of substantial decay and structural damage. Panorama maintains, though, that use of the discovery rule is erroneous because the suit limitation provision provides that suit must be brought within 12 months “after” the loss occurs. Panorama reasons that the damage to its condominium complex was ongoing, and the loss was still occurring when it filed suit. Thus, it did not fail to file suit within one year after the loss occurred.
The majority agrees, saying that under a plain reading of the suit limitation clause, the insured must bring an action within one year subsequent to (“after”) the loss, relying on dictionary definitions of the term “after.” Majority at 139. The majority says that this point is reached at the earlier of actual collapse, i.e., when the building falls down, or when decay can be seen.
The claimed loss is for a collapse. As the Court of Appeals has correctly explained in another case, a structure is either in a “collapse” condition or it is not. Mercer Place Condo. Ass’n v. State Farm Fire & Cas. Co., 104 Wn. App. 597, 604, *14917 P.3d 626 (2000). In the case of hidden decay, at some point the structure, or part of it, will reach a stage of substantial impairment of structural integrity creating a risk of direct physical loss.3 Whether it is known or unknown that that risk has arisen — i.e., that a collapse loss has occurred — a loss has in fact occurred. There may be additional damage after that point, or there may be additional parts of the structure (or additional units in a condominium complex) which reach that point at a later time, but a covered loss has in fact occurred. The policy language does not say that suit must be brought within 12 months after the initial covered loss and all additional damage or additional covered losses are complete; it says that suit must be brought 12 months after the loss has occurred. The fact that damage due to decay continues does not mean that a covered loss has not occurred.
The critical question is not when ongoing damage ended; it is when a covered loss occurred. “After a loss occurs” means after a covered collapse loss occurs, not after additional ongoing damage occurs. The majority has improperly rewritten the policy language.
The question remains, when does a covered collapse loss occur? Coverage for a collapse loss is not like traditional property losses because
a collapse does not occur the minute one of the enumerated perils commences. Termites can begin eating studs and wood can begin to rot long before there is a collapse under any definition.
It would be difficult to determine when th[e] theoretical point of “collapse” is achieved for “hidden” decay .... By definition, decay. . . must progress “secretly” to result in a covered collapse loss.
Paula B. Tarr, William S. Daskam IV & Herbert J. *150Baumann, Jr., Insurance Coverage for Collapse Claims: Evolving Standards and Legal Theories, 35 Tort & Ins. L. J. 57, 85-86 (1999). Generally speaking, the time at which a loss occurs is easily determined where, for example, the loss is due to a fire or an earthquake. However, where latent or progressive damage occurs, the determination is not so easy. In the case of a collapse caused by hidden decay, the point at which a covered loss first occurs may be unknown or very difficult to ascertain.
In order to resolve the difficulty in determining when loss occurs in progressive or latent damage cases, courts have recognized an exception to the general rule regarding construction of suit limitation clauses. The general rule is that where an insurance policy covering risks connected to real property provides that its suit limitations period begins to run from the date of loss,
courts have generally adopted the plain meaning of the terms as the date of the loss or damage, or the date of the catastrophe insured against, as opposed to the date on which the loss was discovered, the date when the loss was ascertained, the date when proof of loss was rejected or the claim denied, or when the claim becomes due and the cause of action accrues.
17 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d § 236:22 (2000) (footnotes omitted). However, “[i]n order to accommodate a claim involving latent or progressive damage, some jurisdictions have defined the date of loss in terms of knowledge or manifestation of the damage.” 17 Couch on Insurance 3d § 236:23; see also § 236:47 (noting that the discovery rule may be invoked for purposes of suit limitation provisions where the nature of the loss is progressive or latent).
The Court of Appeals’ application of a discovery rule provides a fair balance that protects the interests of both the insured as well as those of the insurer.
In a similar context, determining when a loss occurs for purposes of determining which policy period applies to a collapse loss, commentators have noted:
*151For most property insurance claims, the date that the loss occurs is obvious. Windstorms, fires, explosions, thefts, earthquakes, and lightning almost always occur at a fixed point in time. Consequently, there is generally no dispute as to which policy period applies to such a loss. For long-term progressive losses, the timing of the loss is much more difficult to determine. Most property policies cover “property damage which occurs during the policy period.” Under this definition, when does a long-term progressive loss occur?
Practically speaking, there are two times during which a collapse loss could be said to “occur” for purposes of insurance coverage: at the time of discovery, a “manifestation” trigger, or at the point in time when the decay and termite damage first caused substantial structural impairment, an “injury-in-fact” trigger.
35 Tort & Ins. L. J. at 77-78 (footnotes omitted).
If the injury-in-fact trigger is used, the one-year period can run before the insured is even on notice that a loss has occurred. This is obviously a harsh result, which can be avoided by use of a discovery rule approach. Application of the discovery rule in this case thus serves two important goals. It alleviates the difficulty of determining when in fact a collapse loss occurs, and it avoids expiration of the suit limitation period before the insured is even on notice of a covered loss. The fairness of this approach to both the insurer and the insured is demonstrated by the following cases from California.
Prudential-LMI Commercial Insurance v. Superior Court, 51 Cal. 3d 674, 798 P.2d 1230, 274 Cal. Rptr. 387 (1990) is a leading case on this issue. In Prudential-LMI, the insured discovered, while laying carpet in 1985, that there was an extensive crack in the foundation and floor slab of an apartment building. The crack, it was learned later, was caused by expansive soil, and may have started shortly after the apartment complex was constructed in 1971. Prudential-LMI argued, among other things, that a suit limitation clause in its policy had expired and therefore coverage was denied. The suit limitation clause provided that suit must be brought within 12 months “next after *152inception of the loss.” 798 P.2d at 1233.
The California court observed that some courts construing “inception of a loss” defined it as occurrence of the physical event causing the loss. Id. at 1236. This strict construction approach, however, “may lead to an inequitable technical forfeiture of insurance coverage.” Id. at 1237. In contrast, in several California Court of Appeals cases the principle was advanced that the term “inception of the loss” means “that point in time at which appreciable damage occurs so that a reasonable insured would be on notice of a potentially insured loss.” Id. The supreme court agreed, stating that “[w]e agree that ‘inception of the loss’ should be determined by reference to reasonable discovery of the loss and not necessarily turn on the occurrence of the physical event causing the loss.” Id. at 1238. The court held that suit is timely if it is filed within one year after the “point in time when appreciable damage occurs and is or should be known to the insured, such that a reasonable insured would be aware that his notification duty under the policy has been triggered.” Id. Determination of this point in time is a fact question. Id. The court cautioned that to take advantage of the delayed discovery rule, the insured must be diligent in the face of discovered facts. Id.
In another case decided earlier the same year as Prudential-LMI, the California Court of Appeal also applied a discovery rule. Magnolia Square Homeowners Ass’n v. Safeco Ins. Co., 221 Cal. App. 3d 1049, 271 Cal. Rptr. 1 (1990). In Magnolia Square, the facts were markedly similar to those in the case before this court. The suit limitation period provided that suit must be commenced “within one year after the loss occurs.” Id. at 5. The court concluded that the insured’s suit was untimely, because its complaint contained allegations establishing that the insured had notice over a year before suit was brought that structural problems existed at its condominium complex. Id. at 6. The court observed that while the insured homeowners’ association did not know the extent of the structural defects, it had *153a duty to act with diligence to discover the extent of the deficiencies. Id. at 7.
As these two California cases demonstrate, the delayed discovery rule inures to the benefit of both the insured and the insurer. It allows delay in bringing a suit on a policy until the insured knows or reasonably should know of the damage, thus preventing loss of coverage before the insured even has notice that damage has occurred. It also precludes suit where the insured knows or should know of damage but delays bringing suit, thus precluding an insured from unreasonably incurring greater damage as occurred in this case.
A comparison of other cases demonstrates the appropriateness of applying a discovery rule in progressive loss cases involving collapse. In Davidson v. United Fire & Casualty Co., 576 So. 2d 586 (La. Ct. App. 1991), the issue was when a collapse of a building caused by termite damage occurred for purposes of determining whether coverage was provided by either of two insurance policies. The court assumed for purposes of its analysis that a collapse had occurred. The court held that the plaintiffs had the burden of establishing that a collapse occurred during one of the policy periods. Id. at 590. The court found no error in the trial court’s conclusion that plaintiffs failed to prove coverage. The court essentially applied an injury-in-fact trigger, requiring proof of when a collapse actually occurred for purposes of determining whether the loss fell within a policy period. Two experts testified that there was no way to determine when extensive damage occurred within the walls or over how long a period of time it occurred. There was, however, some evidence that damage occurred prior to coverage by the two insurance policies. Davidson demonstrates the difficulty in proving a fact that may not be susceptible of proof where an injury-in-fact approach is followed.
In contrast, in O’Reilly v. Allstate Insurance Co., 474 N.W.2d 221 (Minn. Ct. App. 1991), the court applied a discovery rule. The question in O’Reilly was whether the insured’s claim was barred by a one-year suit limitation *154clause that provided that “ ‘any suit or action must be brought within one year after the date of loss’ ” Id. at 222 (emphasis added) (quoting O’Reilly’s policy). A severe thunderstorm cracked the basement walls of the insured’s house, and she filed a claim that was denied because the damage was minimal and was caused by earth movement not covered by the policy. Over several years cracks in the house slowly spread, and over five years after the thunderstorm the damage suddenly accelerated, causing serious damage to the home which ultimately resulted in its condemnation. The insured filed a second claim, which was denied as untimely.
While the insured argued that the term “date of loss” is ambiguous, and should be resolved in favor of coverage, the court approached the issue differently. The court noted the phrase “date of loss” is similar to the more commonly used “inception of loss,” which some other jurisdictions had construed to mean the date of the casualty causing the loss. Id. at 222-23. The court also noted that “[w]hen the insured’s loss is progressive or latent, however, courts have been reluctant to interpret contractual limitations periods strictly,” observing that the court in Prudential-LMI, 798 P.2d 1230, had held that in progressive damage cases the “inception of the loss” is the date of reasonable discovery of the loss. O’Reilly, 474 N.W.2d at 223. Under this approach, as noted above, “the suit limitation period begins to run after ‘appreciable damage occurs and is or should be known to the insured.’ ” Id. (quoting Prudential-LMI, 798 P.2d at 1238).
The court adopted the California approach, stating: “This approach protects against potentially inequitable technical forfeitures of insurance coverage in progressive or latent loss cases where the time between the inception of the damage and its patency exceeds the applicable period.” 474 N.W.2d at 223. The court concluded that there was a factual issue as to when the insured should actually have discovered the loss, and accordingly reversed summary judgment granted in favor of the insurer. Id.
*155Thus, contrary to Panorama’s arguments and the majority’s analysis, in progressive damage situations the discovery rule has frequently been applied to suit limitation provisions despite the lack of express “discovery” language in the policy. O’Reilly, Prudential-LMI, and Magnolia Square are well-reasoned decisions that this court should join.
The majority, however, accepts Panorama’s contention that Magnolia Square, which was relied on by the Court of Appeals, is distinguishable and irrelevant because the California statutory one-year suit limitation provision requires suit to be commenced “ ‘within 12 months next after inception of the loss,’ ” see Prudential-LMI, 798 P.2d at 1233 (quoting statute), unlike Allstate’s suit limitation provision requiring suit to be brought “within one year after the loss occurs” and this state’s statutory requirement that in contracts of property insurance suit limitations provisions not be for “period [s] of less than one year from the date of the loss.” RCW 48.18.200(1)(c).
The California courts have not, however, found this distinction of any significance. In Prudential-LMI, the court noted that an additional provision of the policy in that case provided that suit must be commenced within 12 months “next after the happening of the loss.” 798 P.2d at 1233 n.2. The court concluded, however, that there was “no legal difference” between “inception” and “happening” for purposes of resolving the issue before it, i.e., when does the one-year period begin to run in a progressive property damage case. Id. The California Court of Appeal in Magnolia Square similarly concluded that the fact that the suit limitation provision in the insurance policy provided that suit had to be commenced “within one year after the loss occurs,” rather than “inception of loss” was a trivial difference, just as it had in an earlier case reasoned that the difference between “occurrence” and “inception of loss” was trivial. Magnolia Square, 271 Cal. Rptr. 5, 6 n.3.
More importantly, the difference in language actually *156works against Panorama, as the court in O’Reilly explained:
Although the [discovery] standard is derived from cases in which the policy limitation period is defined as commencing at the “inception of the loss,” the standard applies even more logically to [the insured’s] policy language, which commences the limitation period at the “date of loss.” Unlike “inception,” “date” does not restrictively modify loss, and the initiation of the limitation period depends only on the determination of when [the insured’s] loss arose.
O’Reilly, 474 N.W.2d at 223 (emphasis added). The reasoning from O’Reilly applies here as well; “after a loss occurs” is more amenable to use of the discovery rule than the “inception of the loss” language. (As explained above, a collapse loss actually occurs at some point, although additional damage may be ongoing.)
Panorama complains, however, that the Court of Appeals relied on improper policy reasons for its decision, noting that the Court of Appeals rejected its continuing loss argument as involving an untenable position because it “would allow an insured who is fully aware of significant continuing property damage to wait until the property actually collapses before making a claim.” Panorama Vill. Condo. Owners Ass’n v. Allstate Ins. Co., 99 Wn. App. 271, 277, 992 P.2d 1047 (2000). Panorama complains that the court’s reasoning involves rewriting the parties’ contract. Panorama maintains that the court should not have allowed concern for whether an insurer will have to pay to supersede the policy language.
The court’s policy consideration is completely consistent with fundamental principles underlying insurance. Losses which the insured knows will occur are not insurable; the risk insured against “must involve the possibility of real loss which neither the insured nor the insurer has the power to avert or hasten.” 7 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d § 101:2 (1997). In a similar vein, an insured should not be allowed to allow known property damage to continue and costs of repair or rebuilding to mount, waiting to file a claim until all damage is *157complete. And there is nothing inappropriate about requiring an insurance company to pay only for losses which it has contracted to insure, nor to protect it from paying for damage which the insured knows will occur and allows to happen before filing a claim.
I completely agree with the Court of Appeals’ conclusion that the discovery rule should be applied in continuing damage situations where the property damage initially occurs and may continue for a time without the insured being aware it is happening. “Any other approach would either penalize unaware insureds or allow those who are aware of the condition to delay in repairing it until the insured property literally collapses. The law does not condone waste.” Panorama Vill., 99 Wn. App. at 279.
“Hidden” Decay
The second issue in this case is what is meant by the term “hidden.” The Allstate policy excludes losses caused by rot. However, as noted, collapse losses are covered if collapse if caused by “hidden decay.” CP at 821. “Decay” means rot or “decomposition of organic matter as a result of bacterial, fungal, or insecticidal action, resulting in destruction or dissolution.” 11 Russ & Segalla, Couch on Insurance 3d § 153:91 (citing Arkin v. Fireman’s Fund Ins. Co., 228 Ga. App. 564, 566, 492 S.E.2d 314, 316 (1997)); see also Whispering Creek Condo. Owner Ass’n v. Alaska Nat’l Ins. Co., 774 P.2d 176, 180-81 (Alaska 1989); Webster’s Third New International Dictionary 584 (1993) (“rot” is synonymous with “decay”). Thus, because losses caused by “rot” are excluded, the “hidden decay” must run its course and result in collapse before there is a covered loss. If the decay is no longer hidden, and the structure is not yet in a state of collapse, there is no coverage. Further, the policy is intended to cover only the risk of direct physical loss involving collapse due to hidden decay, not damage resulting from hidden decay itself.
The issue is whether “hidden” simply means “out of sight,” or whether it means “undisclosed” or “unknown.” *158The term is not defined in the Allstate policy. “ ‘Courts interpret insurance contracts as an average insurance purchaser would understand them and give undefined terms in these contracts their “plain, ordinary, and popular” meaning.’” Diaz v. Nat’l Car Rental Sys., 143 Wn.2d 57, 65-66, 17 P.3d 603 (2001) (quoting Kish v. Ins. Co. of N. Am., 125 Wn.2d 164, 170, 883 P.2d 308 (1994) (quoting Boeing Co. v. Aetna Cas. & Sur. Co., 113 Wn.2d 869, 877, 784 P.2d 507 (1990))).
The majority notes that there are multiple meanings of the term “hidden.” The majority concludes that “hidden” is ambiguous because it has more than one reasonable meaning — saying that Panorama’s proffered meaning is reasonable because it is one of the ordinary dictionary definitions. Majority at 141. This novel approach dictates that whenever the dictionary lists more than one ordinary meaning of a word, any one of the word’s listed meanings is reasonable simply because it is one of the word’s ordinary meanings listed in the dictionary. Thus, any word having multiple meanings is necessarily ambiguous — and must be construed in the insured’s favor. Under the majority’s circular approach, the inquiry into reasonableness is a meaningless exercise.
“An ambiguity in an insurance policy is present if the language used is fairly susceptible to two different reasonable interpretations.” Kitsap County v. Allstate Ins. Co., 136 Wn.2d 567, 576, 964 P.2d 1173 (1998). The reasonableness of the interpretations is determined with regard to the contract as a whole. See State Farm Gen. Ins. Co. v. Emerson, 102 Wn.2d 477, 484, 687 P.2d 1139 (1984). If a term is ambiguous, and the ambiguity is not resolved by extrinsic evidence of the parties’ intent, the term is construed in favor of the insured.
As the majority indicates, there are multiple ordinary meanings of the word “hidden.” It is defined as “[1] being out of sight or off the beaten track : concealed ... [2] UNEXPLAINED, UNDISCLOSED, OBSCURE, SECRET ... [3] obscured by something that makes recognition difficult : covered up.” *159Webster’s Third New International Dictionary 1065 (1993). However, as the Court of Appeals held, while the term “hidden” has more than one meaning, it does not have more than one reasonable meaning in the context of this insurance policy. If “hidden” simply means “out of sight” as Panorama contends, the insured could simply allow known decay to continue behind walls to the point of collapse simply because the decay is not visible. Panorama Vill., 99 Wn. App. at 281. This definition “would permit insureds to turn their backs on maintenance problems to keep something ‘hidden.’ ” 35 Tort & Ins. L.J. at 74. Moreover,
[t]he meaning of the term “hidden” becomes clearer when one considers why decay or insect damage must be hidden for there to be coverage. There is no coverage for decay or insect damage. There is coverage for a collapse, but a collapse does not occur for several months or years after decay, insect damage, or both begins. Hence, the beginning of a collapse loss is an uncovered event.
In other words, if an insured discovers the decay or insect damage soon enough, a collapse will not have occurred and there would be no coverage. If decay or insect damage were not hidden, the eventual collapse would not be a fortuitous event.
Id. Panorama’s definition would allow insureds to ignore damage which is not covered under this policy and delay any action until the uncovered damage from rot becomes a covered loss, collapse. Panorama’s definition is inconsistent with the coverage and exclusion provisions as a whole, and inconsistent with fundamental insurance principles.
Because the only reasonable definition of “hidden” in the context of this policy is “undisclosed” or “unknown,” there is no ambiguity and the principle of construing the term in favor of the insured therefore does not apply, as the Court of Appeals held.
Finally, the majority’s precise holding is that where the covered loss is the risk of direct physical loss from hidden decay, the one-year period in which to commence suit begins on the earlier of the date of actual collapse, or the date when the decay posing the risk of actual collapse is no *160longer obscured from view. Majority at 133-34. Contrary to the majority’s holding, the covered loss is not the risk of physical loss from hidden decay — it is the risk of physical loss involving collapse due to hidden decay. Hidden decay is not a covered event. Moreover, the first of the two time periods identified by the majority essentially equates the policy to an actual collapse policy — involving the actual falling down of the structure — contrary to the policy language and the trial court’s unchallenged ruling that an actual falling-down collapse is not required. The second of these two periods is dependent upon the majority’s conclusion that “hidden” means out of sight. That is, as explained above, an untenable interpretation of the policy language.
Conclusion
Allstate has presented considerable evidence that Panorama knew about the problems giving rise to its claim years before making that claim — that Panorama specifically knew or should have known of problems with structural integrity due to rot. I would affirm the Court of Appeals’ holding that a discovery rule applies, because that is the best way to effectuate the parties’ intended bargain, and would remand this case for resolution of factual issues as to when Panorama knew or should have known of substantial decay and structural damage.
Chambers, J., concurs with Madsen, J.

 The trial court ruled, and that ruling is unchallenged on appeal, that a collapse loss does not require that the structure actually fall down. The language of the policy states the covered loss as being “the risk of direct physical loss involving collapse,” Clerk’s Papers (CP) at 821 (emphasis added), and thus actual collapse is not required.