It’s the last Saturday in January, and that means pirates invade Tampa Bay this weekend. Not familiar with Gasparilla? Here is a little on the Legend. While the name may sound like a rare tropical flower or an exotic drink, to Tampa, Gasparilla means boats, pirates, parades, and merriment and it is important to know that this invasion is just steps away from our office on Harbour Island in Tampa!

In the spirit of one the nation’s largest and oldest festivals, I thought it would be at least a little exciting if I found a case about collapse coverage and party supplies.

A little researching and I ran across a case from the great state of Massachusetts. Back in 2009, in O’Sullivan v. Hingham Mutual Fire Insurance Company,1 the Court ruled that, yes, the evidence supported a jury’s finding that the collapse of a beer cooler was covered under the property insurance.

As I have set forth in the prior blogs in this series, collapse is a very fact specific coverage and each jurisdiction may treat the coverage differently. With that caveat, let’s take a look at what happened to the walk-in beer cooler at Sandra O’Sullivan’s family business, Harper’s Package Store, in Greenfield, Massachusetts.

The collapse:

It was the fall of 2004 and Sandra O’Sullivan arrived at the store to open up and discovered, “the back of the cooler had fallen through the floor, leaving the floorboards, she testified, “broken straight across and sticking up.” On October 20th, she contacted Hingham [Insurance] and filed a claim under the “collapse” provision of her business owners insurance policy.”

The coverage:

In O’Sullivan’s policy, the language on collapse stated:

Collapse—“We” pay for loss caused by direct physical loss involving collapse of a building or structure or any part of a building or structure caused only by one or more of the following: … b. hidden decay … Collapse does not include settling, cracking, shrinking, bulging, or expanding

The response from the insurance company:

The floor settled! The court opinion does not tell us how old the building was but we know that Sandra took the business over from her parents thirty years prior to the loss and to stay in business for that long, you have to keep a regular schedule of open business. But the insurance company said it was the building settling, the floor sagging, and the claim was denied.

Collapse is not defined in the policy:

When it comes to insurance, the courts in Massachusetts have defined collapse to include both a temporal element of suddenness and the visual element of structural damage that is distinct from the degenerative process causing the collapse.2

The testimony on visual damage:

For visual element of collapse, Sandra testified “that the cooler had fallen through the floor, leaving the floorboards ‘broken straight across and sticking up.’ Moss, the project manager for the builder, elaborated that, upon first inspecting the damaged floor, “before I even could look underneath, I could just tell from seeing the condition of the floorboards that the floor framing system had snapped through, it had broken.” And that “[t]he floor framing system, which is the support for the floor, had deteriorated to the point where it was completely nonviable as any kind of structural—it had no structural value at all. It had rotten through to, you know, you could actually pull it down with your fingers”

Was it drastic?

Sandra O’Sullivan operated a package store with a walk-in beer cooler, one day it was fine and then on this day in October, the cooler had fallen into the crawl space below the store! As she testified, “I went in and opened the store, and I looked at the cooler and I saw that the back part had collapsed, the back of the cooler, into the floor.” To the question whether that condition was a “drastic change” in the structure of the flooring, she answered “it definitely was.”

After the jury ruled in favor of Ms. O’Sullivan, the insurance company appealed and said that the judge was wrong for denying motions for a directed verdict for the insurance company and the insurance company’s motion for a judgment not withstanding the verdict. The appellate judge ruled that the evidence did support the jury’s finding of a collapse and affirmed the court’s ruling on this issue. This means Mrs. O’Sullivan is the prevailing party on her breach of contract claim.

Ms. O’Sullivan also sued for improper claims handling, and while the trial court found that the insurance company had failed to conduct a reasonable investigation, that ruling was overturned on appeal and the insurer’s liability was determined not to be reasonably clear.

In the end, Ms. O’Sullivan prevailed in her case for the walk-in cooler and overcame the insurance company’s argument that the floor had merely sagged or settled, but remember: what constitutes a collapse under one policy in one state may not be so in another jurisdiction.

Have a fun and safe weekend to those of you reading in Tampa Bay and beyond!

1 Sullivan v. Hingham Mutual Fire Ins. Co., 2009 Mass.App.Div. 154 (2009).
2 Clendenning v. Worcester Ins. Co., 45 Mass.App.Ct. 658, 660, 700 N.E.2d 846 (1998). See also Driscoll v. Providence Mut. Fire Ins. Co., 69 Mass.App.Ct. 341, 344–345, 867 N.E.2d 806 (2007).