Rare win for insured in coverage dispute: North Pointe must pay after grocery store roof collapse
The roof of the More Food 4 Less Grocery store in Oakland County collapsed under the weight of snow. The owners had insured the building with North Pointe Insurance Company, but the insurer refused to cover the losses. The collapse resulted from a weaking of roof trusses resulting from chemical treatment of the trusses with fire retardant at installation.
It was undisputed that the owners were unaware of the weakening trusses, but the insurer argued that its coverage exclusion for "decay, deterioration, hidden or latent defects" that cause property to "destroy itself...or collapse" applied even though the exclusion specifically did not apply to collapse caused by "weight of snow, ice or sleet." The insurer argued that the terms of the policy should be modified by an understanding that "decay" provisions related only to "organic" decay and not "chemical" decay. The Court rejected this absurd argument, noting multiple dictionary definitions of "decay" that included non-organic decomposition.
The Court also rejected the insurer's argument that the collapsing trusses were not "defective" because they had been installed in accordance with existing building codes and lasted for fifty years. The appellate court agreed with the trial judge that the trusses were in fact "defective"--a term not defined in the policy--because the trusses were "faulty"--the most prevalent definition of "defective."