Appeal from the Circuit Court of Cook County. No. 07 L 1903 The Honorable Charles R. Winkler, Judge Presiding.
The opinion of the court was delivered by: Justice Harris
JUSTICE HARRIS delivered the judgment of the court, with opinion. Justice Cunningham concurred in the judgment and opinion. Presiding Justice Quinn dissented, with opinion.
¶ 1 Plaintiff, Theodore Gulino, appeals the order of the circuit court granting defendant Economy Fire & Casualty Company's (Economy) motion for summary judgment on Gulino's breach of contract claim. The trial court found that Gulino failed to set forth a prima facie case that his insurance policy with Economy covered water damage to the basement of his residence. On appeal, Gulino contends the trial court erred in granting summary judgment where genuine issues of material fact exist as to (1) whether the loss was fortuitous and thus covered by the policy; (2) whether the damage resulted from a collapse as defined in the policy; and (3) whether an exclusion to coverage applies because Gulino neglected to take reasonable measures "to save and preserve property at and after the time of a loss, or when property is endangered by a peril insured against." For the following reasons, we reverse the judgment of the trial court and remand for further proceedings.
¶ 3 The trial court entered summary judgment in favor of defendants on July 26, 2010. Plaintiff filed a notice of appeal on August 20, 2010. Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rules 301 and 303 governing appeals from final judgments entered below. Ill. S. Ct. R. 301 (eff. Feb. 1, 1994); R. 303 (eff. May 30, 2008).
¶ 5 In January 2006, Economy issued an all-risk homeowner's insurance policy to Gulino covering property located at 1800 Forest Avenue in Wilmette, Illinois. The policy covered the period from January 22, 2006, through January 22, 2007. It provided that Economy "will pay for sudden and accidental direct physical loss or damage to the property *** except as excluded in Section I-- Losses We Do Not Cover." It further provided that Economy "will pay for sudden and accidental direct physical loss to covered property including the entire collapse of a building or any part of a building caused by "certain perils," including "weight of contents." The policy defined "collapse" as "an abrupt falling down or caving in of a building or any part of a building. Collapse does not include settling, cracking, sagging, bowing, bending, leaning, shrinking, bulging or expansion. A building or any part of a building that is in danger of falling down or caving in is not considered to be in a state of collapse." The policy excluded coverage for the insured's "[n]eglect *** to use all reasonable means to save and preserve property at and after the time of a loss, or when property is endangered by a peril insured against."
¶ 6 On February 26, 2006, Gulino returned home at approximately 1:30 a.m. and noticed that the heat was not working. He went down to the basement to check the furnace and noticed several inches of water on the floor. The water flowed from a pipe above the washing machine. Gulino could not find the shut-off valve so at around 8 a.m. he called a plumber who contacted the village of Wilmette (village) and had the water turned off. At that point, more than a foot of water was on the basement floor. The plumber inspected the property, finding excessive amounts of paper and debris piled throughout the residence. He contacted the village and the following day, the village posted a notice that the property was dangerous and uninhabitable. An architect retained by the village subsequently inspected the property and found several thousand pounds of paper and other debris on the first floor of Gulino's home. Gulino was not permitted to live in the residence and he moved to an extended-stay hotel. Shortly thereafter, Gulino submitted a claim to Economy. Economy acknowledged Gulino sustained a water loss and paid for water damage to property in the basement area. However, it denied his structural damage claim on the grounds that the loss did not constitute a "collapse" under the policy and that Gulino "neglected to use reasonable means to preserve [the] property when endangered by a potentially covered loss."
¶ 7 Gulino filed a complaint on February 20, 2007, and filed an amended complaint on November 15, 2007.*fn1 In the amended complaint Gulino alleged that Economy breached its contract with him when it denied his claim. Gulino further alleged that the loss occurred after the basement ceiling "suddenly sagged," which disabled the heating system of the home and caused the water pipes in the rear to freeze and split. As a result, large quantities of water entered the basement causing substantial damage. In its answer, Economy denied that the ceiling "suddenly sagged" and claimed insufficient information to admit or deny Gulino's allegation that the sagging ceiling disabled the heating system of the home. Economy admitted that Gulino sustained water damage in the basement but denied that the pipes in the home froze and split. It filed affirmative defenses asserting that Gulino's alleged structural damage loss resulted from sagging, bowing, or bending floor joists and not the result of a "collapse," and that by allowing excessive quantities of debris to accumulate on the property he failed to "use all reasonable means to save and preserve [the] property at and after the time of loss." Therefore, the policy excluded coverage for the loss and Economy did not have a duty to indemnify Gulino.
¶ 8 In his deposition, Gulino testified that prior to the February 26, 2006, incident, which resulted in a citation from the village, he had received a citation in 2004 for having a hole in the roof of his house which he had fixed. He also stated that the hot water in his home stopped working in 2005 and he bought a new gas hot water heater from Home Depot and had it installed on January 16, 2006. Gulino stated that the installers examined the gas line. After the February 26 incident, the village determined that the home was uninhabitable. Gulino notified Economy of his loss less than a week after the incident, and Economy opened a claim file, helped pay for a few weeks' stay in a hotel, and sent checks for water damage to clothes and other items that had been in the basement. It also sent someone to the house to view the property, which had been boarded up by the village.
¶ 9 Gulino asserted that a portion of the basement ceiling was collapsed about eight inches and the collapsed ceiling subsequently disabled the heating system. He further asserted that some of the pipes in the rear of the house were frozen and split, which resulted in large quantities of water flowing into the basement. Gulino stated that the piles of papers and debris accumulated over a period of five years or less. He asserted that the photographs of debris on the first floor near the entry way of the home did not accurately depict the amount of materials actually on that floor. He stated that he could open the front door and that "[t]he rest of the first floor had a lot less materials." Gulino was informed that the cost of renovating the home to bring it up to code would likely exceed $500,000. He sold the property to a developer who subsequently demolished the house.
¶ 10 Demetrios Criezis testified in his deposition for the defense that the village retained him in March 2006 to inspect Gulino's property and render an opinion on its condition. He stated that the property was neglected and looked as if it had not been cared for in many years. The first floor of the home had piles of papers, newspapers, magazine clippings, and articles stacked approximately six to seven feet high. He stated that it was difficult to walk past the front door and he did not inspect the second floor of the home because the stairway was covered with newspapers and inaccessible. Criezis stated that the load on the first floor from all of the debris was 420 pounds per square foot and that a standard home is designed to withstand about 60 pounds per square foot.
¶ 11 He further noticed that in the basement the floor joists were bending and bowing and had been pulled off their beam bearings. When asked how long it would take for such damage to occur, Criezis responded, "[I]t's a guess, probably related to the load of the paper above, I'm not sure, it could have been six months, it could have been at least a year." He opined that "the integrity of the structure ha[d] been compromised by the heavy loading of all the papers stacked above" and that the house was not safe for human occupancy. He asserted that the overloading from the debris throughout the house could have resulted in a collapse of the structure but that it had not yet collapsed upon his inspection.
¶ 12 On April 5, 2010, Economy filed a motion for summary judgment arguing that: (1) the loss was not sudden or accidental, but instead was the inevitable result of the accumulation of debris over several years; (2) the loss did not constitute a "collapse" as defined in the policy; and (3) the loss was the result of Gulino's failure to use reasonable means to preserve the property at the time of loss or when it was endangered by a potentially covered collapse. Gulino filed a counteraffidavit in response to the summary judgment motion. In his counteraffidavit, Gulino stated that up to the time of the incident, he regularly visited the basement two to three times a month and never noticed "settling, cracking, breaking, bending, bowing, bulging or expanding" of the basement ceiling. He further stated that the affected joists were located under an area of the foyer approximately four to seven feet from the front door. At the time of the incident, this space was occupied only with an empty lightweight desk against the wall and a stack of papers about two feet high. He asserted that the first time he was aware of any problem with the basement ceiling was February 28, 2006.
¶ 13 After a hearing the trial court granted Economy's motion for summary judgment on July 26, 2010. It stated that "for the reasons set forth by defendant, the plaintiff in this case will be unable to prove or to set forth a prima facie showing that there was a breach of contract. Neglect, the most obvious, the other two certainly support it most favorably and to the point where the plaintiff has not refuted to the ...