La Bato v. State Farm Fire & Casualty Co.

Part of La Bato’s backyard fell into a creek during a storm. State Farm rejected the claim which La Bato submitted under his all-risks homeowner’s insurance policy. State Farm now appeals from a judgment for $233,372.67 entered against it on account of this rejection.

The judgment is reversed.

Statement of Facts

Julian La Bato bought a house at 157 Ponderosa Lane in Walnut Creek in 1977 and has lived in that house continuously since 1978. At the time La Bato moved in, the backyard of the house extended to Las Trampas Creek, and the house itself was about 40 or 45 feet from the bank of the creek. As of 1982, the left hand side of the backyard, as one faced the creek from the house, was partially covered by a redwood deck which La Bato had built and connected to the house.

At the time La Bato bought the house, he bought an all-risk homeowner’s insurance policy issued by State Farm Fire and Casualty Company (State Farm), through State Farm agent Channing Parrett. The policy included the following language.

“Reasonable Repairs. We will pay the reasonable cost incurred by you of repairing damage to covered property necessary to protect the property from further damage or…