Wanda Jean Thiele v. Kentucky Growers Insurance Company

Summary

The Kentucky Supreme Court affirmed the Court of Appeals’ reversal of a trial court judgment awarding coverage for termite damage under a homeowner’s policy. The court held that Kentucky’s precedent requires an actual collapse of a building or part of a building and declined to adopt the broader majority rule based on substantial impairment of structural integrity. A dissent argued that portions of the residence had broken down and therefore satisfied the policy’s collapse provision.

Holdings

1. Under Kentucky law, "collapse" has its plain and ordinary meaning and requires a falling down, breaking down, or going to pieces of a building or part of a building; mere damage or a condition of impending collapse is insufficient.
2. Kentucky declines to adopt the majority rule that substantial impairment of structural integrity can constitute collapse without an actual falling down or breaking down.
3. Interpretation of an insurance contract is a question of law reviewed de novo on appeal.

Questions Presented

1. Whether the term "collapse" in the homeowner's insurance policy should be interpreted under the Kentucky rule requiring a falling down or going to pieces of a building or part of a building.
2. Whether Kentucky should adopt the more lenient majority rule under which substantial impairment of a building's structural integrity may constitute collapse even without an actual falling down.
3. Whether the insured could recover under the policy for termite damage when the residence had not collapsed under the controlling Kentucky definition.

Disposition

affirmed