The Bulinskis sued, and the parties moved for summary judgment.

What specific force caused rock to break free?

The Bulinskis argued that the flaw in State Farm’s denial of coverage was that it had not determined, in its investigation of the claim, what specific force had caused the rock to break free, and consequently it never had, and could not, articulate how any particular seismic, geological, or other force that generally would be considered “earth movement” had anything to do with the event.

Therefore, they argued, State Farm could not meet its burden of proving that the earth movement exclusion applied and that the exclusion was “not subject to any other reasonable interpretations.”

Related: Top 10 states for homeowners' insurance protections

The State Farm policy provided:

LOSSES NOT INSURED

2. We do not insure under any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events. We do not insure for such loss regardless of: (a) the cause of the excluded event or (b) other causes of the loss; or (c) whether other causes acted concurrently or in any sequence with the excluded event to produce the loss; or (d) whether the event occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:

* * *

b. Earth Movement, meaning the sinking, rising, shifting, expanding or contracting of earth, all whether combined with water or not. Earth movement includes but is not limited to earthquake, landslide, mudflow, mudslide, sinkhole, subsidence, erosion or movement resulting from improper compaction, site selection or any other external forces. Earth movement also includes volcanic explosion or lava flow, except as specifically provided in SECTION I - ADDITIONAL COVERAGES, Volcanic Action.

Decision favors State Farm

The district court granted summary judgment in favor of State Farm.

In its decision, the court explained that there was no dispute that for no known specific reason a large rock had broken loose and fallen, causing the Bulinskis’ loss. The district court pointed out that State Farm had obtained an expert opinion that, to a reasonable degree of engineering probability, erosion, expansion/contraction of the earth due to abundant and abnormally high moisture, and ice seeping into crevices in a cliff face had caused the rock to fall. The district court said, however, that it was “not necessary to consider that opinion” to determine that the earth movement exclusion applied.

Related: Coverage disputes and 'arising out of' claims

The district court reasoned that if a loss would not have occurred in the absence of “earth movement” as defined in the policy, the “lead-in” language of the exclusion “unambiguously” excluded coverage for losses caused by earth movement as defined by the exclusion.

Here, the district court continued, the Bulinskis’ loss had been caused by the movement of a large rock. That event “clearly and unambiguously” fell within the policy definition of earth movement, according to the district court, whether it was considered to be one of the “included but not limited to” named examples — such as erosion or landslide — or simply to fall within the broader language excluding “the sinking, rising, shifting, expanding or contracting of earth,” and “movement resulting from … any other external forces.”

Court rejects homeowner's arguments

The district court also rejected the Bulinskis’ argument that coverage was provided by the policy’s “falling object” provision, concluding that regardless of the provision under which coverage was claimed, the policy’s exclusion section “plainly” stated:

We do not insure under any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events….” (Emphasis added.)

This exclusion, the district court ruled, applied to the “falling object” coverage, even if that applied.

In short, the district court concluded, by writing this “broad exclusion for earth movement,” State Farm had not accepted this risk of loss.

The case is Bulinski v. State Farm Fire and Cas. Co., No. 16-cv-02066-RPM (D. Colo. June 7, 2017).

Related: Know these covered losses and exclusions after a collapse

Steven A. Meyerowitz, Esq., is the director of FC&S Legal, the editor-in-chief of the Insurance Coverage Law Report, and the founder and president of Meyerowitz Communications Inc. Email him at [email protected].