Sullivan v. Nationwide Affinity Insurance ( 2021 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT January 11, 2021
_________________________________
Christopher M. Wolpert
Clerk of Court
DUSTIN E. SULLIVAN; NANA
NAISBITT,
Plaintiffs - Appellants,
v. No. 20-1063
(D.C. No. 1:19-CV-01948-DDD-STV)
NATIONWIDE AFFINITY INSURANCE (D. Colo.)
COMPANY OF AMERICA,
Defendant - Appellee.
_________________________________
ORDER AND JUDGMENT *
_________________________________
Before HARTZ, McHUGH, and CARSON, Circuit Judges.
_________________________________
Dustin Sullivan and Nana Naisbitt (Plaintiffs) appeal from the district court’s
grant of summary judgment to their insurer, Nationwide Affinity Insurance Company
of America (Nationwide). The court ruled that an “earth movement” exclusion in
Plaintiffs’ homeowners insurance policy barred coverage for damage to their house
caused by a rockfall. Exercising jurisdiction under 28 U.S.C. § 1291, we deny
*
After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
submitted without oral argument. This order and judgment is not binding precedent,
except under the doctrines of law of the case, res judicata, and collateral estoppel. It
may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1
and 10th Cir. R. 32.1.
Plaintiffs’ motion to certify legal questions to the Colorado Supreme Court and
affirm the district court’s judgment.
I. Background
Plaintiffs’ house in Colorado sustained extensive damage when two or three
large boulders dislodged from a rocky outcropping and rolled down a steep hillside.
One boulder came to rest in the yard, and one or two others struck the house. 1
Plaintiffs filed a claim with their insurer, Nationwide, which hired an engineering
firm and a geological firm to investigate. The engineering firm’s report (Botic
Report) found that “two rocks dislodged from the upper part of the mountain slope
. . . accidentally and were not influenced by meteorological conditions such as
torrential rain or high winds.” Aplt. App., Vol I at 100. The geological firm’s report
(Trautner Report) observed that “[r]ockfall hazards exist at [Plaintiffs’] property”
primarily due to an undercut sandstone outcrop, as “evidenced by numerous rocks
from both recent and relict rockfall events that scatter the subject property.”
Id. at 124. The Trautner Report continued:
It is common for rocks to break apart during impact in a rockfall event as it
seems was the case during the [subject] event; however, this is not a given,
and there is evidence of boulders in excess of 10 feet diameter having fallen
along this slope in the past. There are three large fragments of rock
deposited in the . . . event that measure 4 by 2 feet, 3 by 2 feet, and 5 by 4
feet, and now rest in the former closet, former kitchen, and yard,
respectively.
Id.1
Plaintiffs claim only one boulder struck the house and then split in two, but
whether one or two boulders struck the house is immaterial to our disposition.
2
After receiving these reports, Nationwide denied coverage under an “earth
movement” exclusion in Plaintiffs’ insurance policy. The exclusion provides that
Nationwide does “not insure for loss caused directly or indirectly by . . . Earth
Movement” and regardless of “whether or not the loss event results in widespread
damage or affects a substantial area.” Id. at 226. The term “Earth Movement” is
defined as follows:
Earth Movement means:
a. Earthquake, including land shock waves or tremors before,
during or after volcanic eruption;
b. Landslide, mudslide, or mudflow;
c. Subsidence or sinkhole; or
d. Any other earth movement including earth sinking, rising or
shifting;
caused by or resulting from human or animal forces or any act of
nature . . . .
Id. (emphasis added). The emphasized words in the foregoing quote are at the heart
of this appeal, and the policy does not further define them.
After Nationwide denied their claim, Plaintiffs filed suit, asserting claims for
breach of contract, insurance bad faith, statutory damages for insurance bad faith, and
a declaratory judgment regarding coverage. Nationwide moved for summary
judgment. As part of their response to that motion, Plaintiffs submitted a report by a
geological engineer (West Report). The West Report offered support for their
position that a rockfall is not a landslide and the term “earth” means soil, not rock.
See, e.g., id., Vol. II at 298 (opining that “rockfalls and landslides are distinctly
3
different” and that “use of the term landslide to describe a rockfall, or vice versa, is
incorrect.” (boldface omitted)); id. at 294 (“The terms earth and/or soil . . . do not
incorporate in-place rock/bedrock and do not address geologic hazard and risk related
to rock/bedrock.” (boldface omitted)). But the West Report also quoted various
sources suggesting that a rockfall is a type of landslide, see id. at 293 (“Terminology
designating landslide types generally refers to the landform as well as the process
responsible for it, e.g. rockfall . . . .” (quotation omitted)), and that a landslide
includes the movement of rock alone, id. at 295 (“A landslide is a downslope
movement of rock or soil, or both . . . .” (quotation omitted)). Plaintiffs also moved
to certify the coverage question to the Colorado Supreme Court as a matter of first
impression under Colorado law—whether the earth-movement exclusion bars
coverage for direct physical loss caused by a rockfall.
The district court denied the motion to certify and granted summary judgment
to Nationwide, concluding that the earth-movement exclusion barred coverage.
Plaintiffs appeal.
II. Motion to Certify
Plaintiffs have filed a motion asking us to certify to the Colorado Supreme
Court five questions of law related to the earth-movement exclusion. Although we
have discretion to certify questions to a “state’s highest court according to that
court’s rules,” 10th Cir. R. 27.4(A)(1), we decline to do so here.
Under Colorado law, the Colorado Supreme Court may answer a question of
law certified to it that “may be determinative of the cause then pending in the
4
certifying court and as to which it appears to the certifying court that there is no
controlling precedent in the decisions of the [Colorado] supreme court.” Colo. R.
App. P. 21.1(a). Accordingly, we will certify a question if it “(1) may be
determinative of the case at hand and (2) is sufficiently novel that we feel
uncomfortable attempting to decide it without further guidance.” Pino v. United
States, 507 F.3d 1233, 1236 (10th Cir. 2007). In deciding whether to certify, we take
into account “that the judicial policy of a state should be decided when possible by
state, not federal, courts.” Id. But we must also bear in mind that, in a diversity
case, we have a “duty to decide questions of state law even if difficult or uncertain.”
Colony Ins. Co. v. Burke, 698 F.3d 1222, 1235 (10th Cir. 2012) (internal quotation
marks omitted). We therefore “apply judgment and restraint before certifying,” and
“will not trouble our sister state courts every time an arguably unsettled question of
state law comes across our desks.” Pino, 507 F.3d at 1236. “When we see a
reasonably clear and principled course, we will seek to follow it ourselves.” Id.Applying these tenets, we deny Plaintiffs’ motion to certify. As our ensuing
discussion illustrates, there is “a reasonably clear and principled course” that we may
“follow . . . ourselves.” Id.III. Discussion
A. Standards of review
We review an order granting summary judgment de novo, applying the same
standards that district courts apply. Leprino Foods Co. v. Factory Mut. Ins. Co.,
453 F.3d 1281, 1286 (10th Cir. 2006). A “court shall grant summary judgment if the
5
movant shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “We must examine
the record in the light most favorable to the party opposing the motion [for summary
judgment].” Leprino Foods Co., 453 F.3d at 1286.
In a diversity case such as this, “we apply Colorado law and interpret
insurance policies as a Colorado court would.” Id. at 1287. Because “the Colorado
Supreme Court has not addressed the specific issues raised in this appeal, . . . we
must predict how that court would rule.” Pompa v. Am. Fam. Mut. Ins. Co., 520 F.3d
1139, 1142 (10th Cir. 2008).
B. Interpretation of insurance policies under Colorado law
Under Colorado law, “[i]nsurance policies are subject to contract
interpretation.” Bailey v. Lincoln Gen. Ins. Co., 255 P.3d 1039, 1050 (Colo. 2011).
But unlike “regular contracts,” which “must be examined and construed in harmony
with the plain and generally accepted meaning of the words employed, insurance
policies must be given effect according to the plain and ordinary meaning of their
terms.” Id. at 1050-51 (citation and internal quotation marks omitted). In
determining the plain and ordinary meaning of a term in an insurance policy, the
Colorado Supreme Court has eschewed the use of “technical readings” and instead
looks to “what meaning a person of ordinary intelligence would attach to” a policy
term. Id. at 1051.
To that end, the Colorado Supreme Court follows the doctrine of reasonable
expectations. Id. at 1050. As relevant here, under this doctrine Colorado will not
6
enforce an exclusionary provision “where an ordinary, objectively reasonable person
would, based on the language of the policy, fail to understand that he or she is not
entitled to the coverage at issue.” Id. Courts must read the policy as a whole, not as
a collection of isolated terms. Id. at 1051. Therefore, “[i]f, based on how an
ordinary, objectively reasonable insured would read the whole policy, the question of
whether certain coverage exists is susceptible to more than one reasonable
interpretation, then the coverage provisions are ambiguous” and must “be construed
against the insurer as the drafter of the policy.” Id. (citation and internal quotation
marks omitted). “[T]he question of whether an ambiguity exists is always an
objective test: policy terms should be read in the sense in which the insurer had
reason to believe they would be interpreted by the ordinary reader and purchaser.”
Id. (internal quotation marks omitted). Nonetheless, the doctrine “does not
contemplate the expansion of coverage on a general equitable basis.” Id. at 1054(internal quotation marks omitted).
We also keep in mind that the insurer bears the burden of establishing an
exclusion is “not subject to any other reasonable interpretation[].” Hecla Min. Co. v.
N.H. Ins. Co., 811 P.2d 1083, 1090 (Colo. 1991); see also Bohrer v. Church Mut. Ins.
Co., 965 P.2d 1258, 1262 (Colo. 1998) (where an insurer seeks to limit coverage
through an exclusionary provision, the exclusion “must be written in clear and
specific language”).
7
“Interpretation of a written contract and the determination of whether a
provision in the contract is ambiguous are questions of law . . . .” Fibreglas
Fabricators, Inc. v. Kylberg, 799 P.2d 371, 374 (Colo. 1990).
C. The earth-movement exclusion applies to the rockfall
The parties’ dispute concerning the earth-movement exclusion centers on the
meaning of the term “landslide” and the phrase “[a]ny other earth movement
including earth sinking, rising or shifting” in the definition of “Earth Movement.”
Aplt. App., Vol. I at 226. 2 To resolve this dispute, we first canvass (in chronologic
order) a handful of cases from courts other than Colorado state courts (most of which
Nationwide relies on) that have concluded an earth-movement exclusion barred
coverage for damage caused by a rockfall. We then explain why we think the
Colorado Supreme Court would find those cases persuasive rather than a case from a
Colorado state district court, which Plaintiffs heavily rely on, that reached the
opposite conclusion.
1. Cases concluding that earth-movement exclusions include rockfall
In Olmstead v. Lumbermens Mutual Insurance Co., the insured’s buildings
shifted due to adjacent excavation. 259 N.E.2d 123, 124-25 (Ohio 1970). Although
the policy covered damage caused by a landslide, id. at 125, the Ohio Supreme Court
2
Plaintiffs also argue that the district court erred by weighing facts, in
particular whether more than one boulder struck the house, and evaluating the expert
opinions in the Botic, Trautner, and West Reports. Because the number of boulders
and the experts’ opinions are immaterial to our analysis, we need not reach these
arguments.
8
determined a landslide had not occurred, because the “ordinary meaning of
[landslide] is the ‘sliding down of a mass of soil or rock on a steep slope,’” id. at 127(emphasis added) (ellipsis omitted) (quoting Random House, THE AM. COLL.
DICTIONARY).
In Dupps v. Travelers Ins. Co., the roof of a cave near the top of 30-foot bluff
partially collapsed, sending down rocks that damaged the plaintiffs’ property.
80 F.3d 312, 313 (8th Cir. 1996). The insurer denied coverage based on an exclusion
for damage cause by “any earth movement (other than sinkhole collapse), such as an
earthquake, landslide, mine subsidence, earth sinking, rising or shifting.” Id.(brackets and internal quotation marks omitted). Relying on a dictionary definition
of “landslide” as ‘the downward falling or sliding of a mass of soil, detritus, or rock
on or from a steep slope,’” id. at 314 (emphasis added) (quoting THE RANDOM
HOUSE DICTIONARY OF THE ENG. LANGUAGE 1080 (2d ed. 1987)), the Eighth Circuit
held that the plain and ordinary meaning of “‘landslide’ includes rocks falling down a
bluff,” id.Next, in Murray v. State Farm Fire & Casualty Co., several large boulders and
rocks fell from a man-made highwall and damaged the plaintiffs’ house. 509 S.E.2d
1 ,5 (W. Va. 1998). The insurer denied coverage based on an exclusion for losses
caused by a landslide or erosion. Id. at 6. Relying primarily on Olmstead and
Dupps, see id. at 7, the West Virginia Supreme Court held that “the plain, ordinary
meaning of the word ‘landslide’ in an insurance policy contemplates a sliding down
of a mass of soil or rock on or from a steep slope,” id. at 8 (emphasis added).
9
In Parker v. Safeco Insurance Co. of America, a single large boulder fell from
a hillside several hundred feet above the plaintiffs’ cabin, severely damaging it.
376 P.3d 114, 116 (Mont. 2016). The insurer denied coverage based on an
earth-movement exclusion defining “earth movement” as, among other things, “the
sinking, rising, shifting, expanding or contracting of earth,” including “landslide.”
Id. The Montana Supreme Court held that “the term ‘earth’ includes more than just
soil such as that found in a garden. Reasonable people would recognize that rocks of
all sizes ordinarily comprise more or less of the surface of the earth upon which we
live.” Id. at 118. The court found support for this view (1) in the fact that the
exclusion included “landslides and lava flow as examples of earth movement,” id.;
(2) in cases “reflect[ing] the common understanding of the term landslide as a
movement, falling or sliding of whatever is on the surface of the earth and some
distance below the surface,” id. (citing Dupps and a Montana state district court case
(Deschner); and (3) in cases that have concluded a landslide “includes movement of
‘soil or rock on or from a steep slope,’” id. at 119 (emphasis added) (quoting Murray,
509 S.E.2d at 8, and citing Dupps and Deschner). The Parker court also concluded
that “[t]he clear examples of earth movement provided in the policy” (“earthquake,
landslide, mudflow, mudslide, along with volcanic blast, volcanic explosion,
shockwave, lava flor, lahars and fallout of volcanic particulate matter”) made “it
clear that [the earth-movement exclusion was] not limited to movement of soil” but
was instead “clearly intended to be broadly inclusive of all natural materials that
comprise the surface of the earth, including rocks and soil.” Id.10
Most recently, the United States District Court for the District of Colorado
decided Bulinski v. State Farm Fire & Casualty. Co., No. 16-CV-02066-RPM,
2017 WL 2459751 (D. Colo. June 7, 2017). There, the insurer denied coverage for
damage caused by a single large rock that fell from a cliff face and damaged
plaintiffs’ Colorado house based on an exclusion defining “earth movement” as, in
relevant part, “the sinking, rising, shifting, expanding or contracting of earth”
including “landslide” and “movement resulting from . . . any other external forces.”
Id. at *1. Although the district court did not discuss the doctrine of reasonable
expectations, the court concluded that the plaintiffs’ loss “clearly and
unambiguously” fell within the dictionary definition of “landslide” as “‘the
downward falling or sliding of a mass of soil, detritus, or rock on or from a steep
slope.’” Id. at *2 & n.2 (emphasis added) (quoting Dictionary.com Unabridged 3).
The court also determined the event fell “within the broader [policy] language
excluding the ‘sinking, rising, shifting, expanding or contracting of earth,’ and
‘movement resulting from any other external forces.’” Id. at *2 (ellipsis omitted)
(quoting policy). 4
3
See https://www.dictionary.com/browse/landslide?s=t (last visited Jan. 4,
2021).
4
Nationwide also points to Western United Insurance Co. v. Heighton,
No. 2:14CV435DAK, 2016 WL 4916785 (D. Utah Sept. 14, 2016), as another
example of a case construing the meaning of “landslide” to include a rockfall.
However, we find Heighton of limited utility. In that case, a large rock mass
detached from a cliff and fell onto a steep slope “where it shattered into massive
fragments” that “then rolled and bounced downslope until the rock-fall debris
reached . . . [and] totally destroy[ed] [a] home.” Id. at *1. The insurer denied
11
2. Predicting how the Colorado Supreme Court would rule
The common thread in Olmstead, Dupps, Murray, Parker, and Bulinski is the
use, directly or indirectly, of general (as opposed to technical or specialized)
dictionary definitions to determine the plain and ordinary meaning of the term
“landslide.” The Colorado Supreme Court has expressly sanctioned the use of
“recognized dictionaries” in “determining the plain and ordinary meaning of words”
in an insurance policy. Renfandt v. N.Y. Life Ins. Co., 419 P.3d 576, 580 (Colo.
2018). We therefore think the Colorado Supreme Court would consider Olmstead,
Dupps, Murray, Parker, and Bulinski persuasive regarding whether the landslide
exclusion in Plaintiffs’ policy applies to the damage caused to their house, even if, as
they maintain, only one boulder struck the house.
We also expect the Colorado Supreme Court would consult several general
dictionaries. Having done that ourselves, we find one well-recognized dictionary
that, like those used in Olmstead, Dupps, and Bulinski, defines “landslide” to include
the movement of rock alone. See Landslide, MERRIAM-WEBSTER.COM DICTIONARY,
coverage based on an earth-movement exclusion that included “landslide” and “any
other earth movement.” Id. The district court upheld the denial of coverage based
solely on the ordinary meaning of “landslide” as stated in Dupps, Murray, and
Parker. Id. at *2-3. But the court said the case was not one “where a single 2700 ton
rock broke off of an overhang and fell directly onto a house below without coming
into contact with any other soil or organic materials.” Id. at *3. Instead, the rock
“broke off, hit a steep slope, and triggered a downward shifting of a mass of rocks
and soil toward [the] house,” which, the court said, was “a plain and ordinary
example of a landslide.” Id. Consequently, Heighton is materially distinguishable
from our case, which involves two or three falling rocks, only one or two of which hit
Plaintiffs’ house, and no soil.
12
Merriam-Webster (2021) (defining “landslide” as “the usually rapid downward
movement of a mass of rock, earth, or artificial fill on a slope” (emphasis added). 5
However, we also find two other recognized dictionaries that define “landslide” as
consisting of earth and rock. See Landslide, AM. HERITAGE DICTIONARY OF THE
ENG. LANGUAGE (5th ed. 2020), Houghton Mifflin Harcourt Publ’g Co. (defining
“landslide” as “[t]he downward sliding of a relatively dry mass of earth and rock”
(emphasis added)) 6; Landslide, CAMBRIDGE ENG. DICTIONARY (2021), Cambridge
Univ. Press (defining “landslide” as “a mass of rock and earth moving suddenly and
quickly down a steep slope”) (emphasis added)) 7.
To be sure, the Colorado Supreme Court has held that where recognized
dictionaries differ on the meaning of a term in an insurance policy, the term is
ambiguous and therefore construed against the insurer, at least where construing the
term in favor of the insurer would be inconsistent with other portions of the policy.
See Hecla Min. Co., 811 P.2d at 1091-92. That is not the case here. Reading the
earth-movement exclusion as a whole, as we must, see Bailey, 255 P.3d at 1051, the
examples of earth movement in the exclusion, together with the catch-all “any other
earth movement” provision, convince us the exclusion was “intended to be broadly
5
See https://www.merriam-webster.com/dictionary/landslide (last visited
Jan. 4, 2021).
6
See https://ahdictionary.com/word/search.html?q=landslide (last visited
Jan. 4, 2021).
7
See https://dictionary.cambridge.org/us/dictionary/english/landslide (last
visited Jan. 4, 2021).
13
inclusive of all natural materials that comprise the surface of the earth, including
rocks and soil,” Parker, 376 P.3d at 119.
Moreover, the fact that an objective, reasonable reader of the term “landslide”
could view it either as soil, a combination of rock and soil, or, as in this case, two
rocks falling without soil, one of which struck the house, does not make the term
ambiguous. As we have seen, “landslide” is variously defined to include all of these
types of movement, so the term “landslide” in Plaintiffs’ insurance policy is not
ambiguous. See Allstate Ins. Co. v. Juniel, 931 P.2d 511, 513 (Colo. App. 1996)
(explaining that “the fact that terms of a policy of insurance may be construed as
ambiguous where applied to one set of facts does not make them ambiguous as to
other facts which come directly within the purview of such terms” (internal quotation
marks omitted)). It would be unreasonable for an ordinary reader to think that
damage caused by soil-only and soil-and-rock slide events would not be covered but
damage caused by a rock-only slide event would be.
Regardless, even if a rockfall consisting of two boulders and no soil were not a
landslide, it would come within the catch-all provision—“any other earth movement
including earth sinking, rising or shifting,” Aplt. App., Vol. I at 226. The fact that
dictionary definitions of “landslide” include a combination of soil and rock indicates
that “earth” in the catch-all provision includes more than just soil—it includes the
“sinking, rising or shifting” of rock alone.
Having explained why we think the Colorado Supreme Court would find the
earth-movement exclusion applicable here, we must explain why we disagree with
14
Plaintiffs that it would instead follow Kresge v. State Farm Fire and Casualty Co.,
No. 2011CV008352 (Colo. Dist. Ct. Nov. 4, 2012). In Kresge, a single boulder
rolled down a slope and damaged a house. Id., slip op. at 1. 8 The insurer denied
coverage based on an exclusion for “earth movement,” which the policy defined as
“the sinking, rising, shifting, expanding or contracting of earth, all whether combined
with water or not . . . includ[ing], but . . . not limited to earthquake, landslide,
mudflow, mudslide, sinkhole, subsidence, erosion or movement resulting from
improper compactions, site selection or any other external forces,” and “volcanic
explosion or lava flow.” Id. at 3.
The state district court concluded that the exclusion was ambiguous with
regard to the movement of a single boulder. The court gave several reasons in
support, but we think none of them, taken alone or together, would persuade the
Colorado Supreme Court to follow Kresge and conclude that the earth-movement
exclusion here, which is similar to the one in Kresge, does not apply to the damage
Plaintiffs’ house sustained.
First, Kresge cited cases from state appellate courts outside Colorado finding
similar or identical earth-movement exclusions ambiguous, id. at 8-9, and reasoned
that “the fact that there is so much judicial disagreement about the earth-movement
exclusion supports the Court’s conclusion,” id. at 9. But the ambiguities in those
8
Although Kresge is available on Westlaw, see 2012 WL 8499731, the text
there contains some typographical errors and omits a table containing the insurance
policy’s earth-movement exclusion. We therefore cite to the slip opinion, which is
separately available as a PDF file in the upper left-hand corner of the Westlaw page.
15
cases concerned whether the exclusion applied to human-caused events. 9 That the
courts in those cases found an ambiguity regarding causation is irrelevant here
because the exclusion in Plaintiffs’ policy specifically applies to earth movement
“caused by or resulting from human or animal forces or any act of nature,” Aplt.
App., Vol. I at 226. We think it unlikely that the Colorado Supreme Court would be
persuaded by Kresge’s reliance on these materially distinguishable cases to determine
that the exclusion here is ambiguous. 10
Another reason Kresge gave in support of its conclusion that the
earth-movement exclusion there was ambiguous was that it was simply “unclear”
whether the exclusion applied “to a single boulder, as opposed to a landslide” and, if
it did not apply to a single boulder, “how many boulders are required before the event
9
See Powell v. Liberty Mut. Fire Ins. Co., 252 P.3d 668, 672-74 (Nev. 2011)
(determining exclusion was ambiguous regarding whether human-caused event—
damage from soil expansion due to a leaky water pipe—was excluded from
coverage); Pioneer Tower Owners Ass’n v. State Farm Fire & Cas. Co., 908 N.E.2d
875, 877-78 (N.Y. 2009) (same regarding damage due to adjacent excavation);
Duensing v. State Farm Fire & Cas. Co., 131 P.3d 127, 134-36 (Okla. Civ. App.
2005) (same regarding damage caused by leaky water pipe due to shift in
human-placed sand fill beneath home’s floating slab); Murray, 509 S.E.2d at 9 (same
regarding damage due to rockfall from man-made highwall, after first determining, as
we discussed above, that “landslide” means “a sliding down of a mass of soil or rock
on or from a steep slope,” id. at 8); Bly v. Auto Owners Ins. Co., 437 So.2d 495, 497
(Ala. 1983) (same regarding damage caused by vibrations of passing vehicles).
10
In a separate part of its opinion, Kresge addressed the Alaska Supreme
Court’s determination in State Farm Fire & Casualty Co. v. Bongen that an
earth-movement exclusion identical to the one in Kresge was “not ambiguous” and
“encompasses both natural phenomena and human processes.” 925 P.2d 1042, 1046
(Alaska 1996). Paradoxically, Kresge declined to follow Bongen because in Kresge,
“the mechanism or cause of the boulder rolling down the hill [was] irrelevant under
the policy.” Kresge, slip op. at 10.
16
becomes an excluded landslide?” Kresge, slip op. at 9 (internal quotation marks
omitted). But Kresge did not consult any dictionary definitions of “landslide” or
discuss the portion of the earth-movement definition describing “the sinking, rising,
shifting, expanding or contracting of earth,” id. at 3, which is substantially similar to
the catch-all “any other earth movement” clause here. As we have already discussed,
the plain and ordinary reading of those terms brings the event here within the scope
of the exclusion.
The failure to consult any dictionary definition of “landslide” also undermines
yet another reason Kresge gave for concluding that the exclusion was ambiguous—
that “reasonable consumers would certainly differentiate between a ‘landslide’ and a
single boulder rolling down a hill, and expect the latter to be covered.” Id. at 10.
Absent at least a dictionary definition of “landslide” supporting its view, the court’s
determination is wholly conclusory. Moreover, although Plaintiffs’ view that only
one boulder struck their house may be accurate, no one disputes that two boulders
fell, the second coming to rest in the yard.
Finally, Kresge said the insurer’s interpretation of the exclusion was “contrary
to ordinary expectations and common sense,” because under that interpretation, “a
decorative boulder which rolled off a flatbed truck of a landscaping company would
be an included peril, but would be excluded if it rolled down the hill.” Id. We think
the Colorado Supreme Court would find this observation of little value because
hypotheticals are unhelpful in determining whether an exclusion is ambiguous with
regard to the facts of a particular case. See Juniel, 931 P.2d 511 at 513 (explaining
17
that a policy term may be construed as ambiguous when applied to one situation but
not when applied to a situation that falls within the scope of the term). 11
In sum, we do not think the Colorado Supreme Court would follow Kresge.
We are instead convinced it would be persuaded by a combination of Olmstead,
Dupps, Murray, Parker, Bulinski, and general dictionary definitions of “landslide”
that an ordinary, reasonably objective insured would read the earth-movement
exclusion as excluding coverage for the event here, either as a “landslide” or as “any
other earth movement including earth sinking, rising or shifting,” Aplt. App., Vol. I
at 226.
11
In a preamble to its analysis, Kresge noted that the historic use of
earth-movement exclusions was to protect insurers against events like earthquakes
that were hard to predict, difficult to insure against, and caused widespread damage
rather than damage to an individual policyholder. See Kresge, slip. op. at 7. Such
usage is irrelevant here, because the earth-movement exclusion in Plaintiffs’ policy
applies “whether or not the loss event results in widespread damage or affects a
substantial area.” Aplt. App., Vol. I at 226. Indeed, in a case Kresge failed to
acknowledge, the Colorado Court of Appeals had determined that earth-movement
exclusions that “unambiguously exclude coverage for ‘any’ expansion or other
movement of land, earth, or mud” are not ambiguous on the ground that they could
be read as applying only to large-scale or catastrophic damage. Hoang v. Monterra
Homes (Powderhorn) LLC, 129 P.3d 1028, 1036 (Colo. App. 2005), rev’d on other
grounds sub nom. Hoang v. Assurance Co. of Am., 149 P.3d 798 (Colo. 2007).
Therefore, to the extent the historic use of earth-movement exclusions informed the
result in Kresge, we think the Colorado Supreme Court would find it unhelpful in
determining whether an ambiguity exists in the exclusion here.
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IV. Conclusion
We affirm the district court’s judgment and deny Plaintiffs’ motion to certify.
Entered for the Court
Joel M. Carson III
Circuit Judge
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