Doheny West Homeowners' Ass'n v. Am. Guarantee & Liab. Ins. Co.

In this case, we consider the scope of collapse coverage in a property insurance policy, an issue which has long been the subject of litigation in other states. The insurance policy before us covered “loss or damage caused by or resulting from risks of direct physical loss involving collapse of a building or any part of a building” resulting from specified causes. We reject the position of a number of states, that such a clause covers only “actual collapse,” and agree with those states, and the trial court here, which find that such a clause covers actual or imminent collapse.

Factual and Procedural Summary

Doheny West Homeowners’ Association (Doheny West) is the homeowners association of a 151-unit condominium complex in West Hollywood. The complex has three levels of enclosed parking, topped with a deck, pool, hot tub, and pool room. Doheny West purchased an insurance policy for the complex from respondent American Guarantee & Liability Insurance Group and Zurich-American Insurance Group (American Guarantee). The policy, titled a “Commercial Package Policy,” included property insurance. A section entitled “Causes of Loss—Special Form” listed a number of exclusions and…