Claim for Collapse After Demolition of Building Fails

    After several city citations and the eventual demolition of the insureds’ apartment building, their claim for coverage based on collapse was unsuccessful. Barker v. AmGuard Ins. Co., 2022 U.S. Dist. LEXIS 202069 (W.D. Mo. Nov. 7, 2022).

    The plaintiffs purchased a three-story multi-family apartment building on March 9, 2009. Prior to the purchase, steel beams were installed in the basement along the east and south walls. By 2013, the south and east walls were leaning. 

    On March 13, 2017, the city building inspector observed “the foundation failing in several areas and deflection in the south wall.” The building inspector issued a citation for a pubic nuisance in violation of the City Code. This was followed by several more citations against plaintiffs. The plaintiffs’ inspector reported the basement walls were experiencing “extensive lateral deflections primarily due to the inadequate design of the basement walls.” 

    Plaintiffs understood the issues to be “cosmetic.'” They had no work done on the property besides aesthetic upgrades. After additional citations were entered, the building was ordered demolished.

    Shortly before the demolition, the plaintiffs submitted a claim to AmGuard. Collapse was only covered when “an abrupt falling down or caving in of a building or any part of a building” occurred. AmGuard’s inspection before the demolition found damage to the building, including a leaning foundation cracks in the walls and ceilings, and unsanitary conditions. Further, the walls were nearly vertical and there was no imminent danger of collapse. 

    When the claim was denied, plaintiffs filed suit. AmGuard moved for summary judgment. The court agreed with AmGuard. Plaintiffs did not create a genuine issue of material fact. The failed to submit evidence that the property’s framework itself fell or collapsed.