Carty

William J. Carty and Rosemarie Carty appeal from a judgment entered in favor of Western Casualty and Surety Company, Western Indemnity Company, Inc., American Economy Insurance Company and American States Insurance Company (collectively American States) following a bifurcated court trial of the coverage issue in the Cartys’ action. The Cartys contend the court erred in deciding none of their policies, issued by American States, covered their property loss. We affirm.

Factual and Procedural Background

In June 1974, the Cartys purchased a six-year-old home in the Lemon Heights area of Santa Ana. Their first homeowner’s policy was issued by an insurer which is not a party to this appeal. In 1979, the Cartys began insuring their home through American States, and for the next five years, successive policies covered “all risks of physical loss to the property,” excluding perils such as loss due to inherent vice or latent defect, settling or cracking of the foundation or floors, or earth movement. In July 1984, a renewal policy revision further excluded losses due to contractor negligence: faulty, inadequate or defective design, workmanship, construction, grading or soil…