AMCO argued that no reasonable jury could conclude that a collapse as defined in the policy occurred. According to AMCO, a collapse occurs only when a building (or part of it) completely falls down or caves in and is no longer standing. According to the insured, the definition of collapse in the policy means that something less than completely falling to the ground qualifies as a collapse.

 The district court said that AMCO is relying on the sections of the definition that declare a building that is standing is not considered to be in a state of collapse; in other words, AMCO contends that if the building is standing, it has not collapsed. However, said the court, these parts of the definition merely serve to clarify other situations in which a building is not in a state of collapse. To initially determine when a building is in a state of collapse, the court said that one must refer back to that part of the definition of collapse that noted "the building or part of a building cannot be occupied for its intended purpose". This phrase expressly referenced a collapse as being triggered by the inability to occupy.

 The insurer also contended that no reasonable person could conclude that the slow sagging of the exterior northwest corner of the hotel (as a result of gradual rot) was an abrupt falling down or caving in as required by the definition. In answer to this, the court found that the insured presented sufficient evidence for a jury to conclude that the failure of the northwest corner of the hotel caused part of the hotel to fall or cave in so that it could not be occupied for its intended purpose, such that the hotel suffered collapse within the meaning of the collapse coverage provision of the property policy.

 The court denied the motion of the insurer and the jury award for the insured was upheld.

 Editor's Note: The current causes of loss special form has a definition of collapse similar to the one used in the AMCO policy and both forms would seem to require the building to abruptly fall down or cave in in order for a collapse to occur. However, the definitions in the AMCO policy and in the current causes of loss form both have the phrase pertaining to the building not being able to be occupied for its intended purpose. This is the part of the definition of collapse that this court emphasized in its opinion. (However, the United States District Court in this decision did say it joined the current majority judicial view which interprets a collapse as referring to a substantial impairment to the structural integrity of the property.)