Structural Damage Revisited And A Global Lesson

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One of Ruminations’ most popular blog postings explored what distinguishes a structural repair from one that is non-structural. In doing so, it pointed out that not every component of a structure is a structural element or a structural component. For those who haven’t seen that posting or want to re-visit it, click HERE to see it. Today, we are going to revisit that subject using an Eleventh Circuit United States Court of Appeal decision as our foundation (ugh – pun!).

The point we’re working toward won’t be irrelevant just because the case in question, Hegel v. First Liberty Insurance Corporation (viewable by clicking HERE), resolves an insurance coverage dispute. Those of us who draft leases and mortgages, and who interpret them when a disagreement arises, need to look wherever the needle might be found.

The insurance policy before the court insured against “Sinkhole Loss.” Fortunately for us, the policy explained that such a loss means “structural damage to the building, including the foundation, caused by “sinkhole activity.’” Unfortunately for us, the insured, and the insurer, the policy did not define “structural damage.” So, it seems that people who write insurance policies and those who write real property leases can be interchangeable, at least when it comes to not realizing how failing to define certain technical terms can send a lot of litigator’s children to college, graduate school, professional school, and beyond.

Florida, as is the case with most states, closely regulates insurance by way of regulations and statutes. It has a statute about sinkhole insurance (did you know there was such a thing as sinkhole insurance? – we didn’t), but its statute had the same definition for “sinkhole loss” and suffered from the same failure as did the actual policy – the failure to define structural damage. Its building code and statutes do have some useful insights, at least as to “structural” when relating to buildings. From them, we learn that in its code, “structural” means “any part, material or assembly of a building or structure which affects the safety of such building or structure and/or [sic] which supports any dead or designated live load and the removal of which part, material or assembly could cause, or be expected to cause, all or any portion to collapse or fall.” [Emphasis of and, is “ours.”] So, by way of example, some subfloors would qualify and some would not.

In May of 2011, Florida adopted an amendment to one of its statutes, and Ruminations, to supplement our June 22, 1014 posting, thinks this will be pretty helpful to those of us who draft documents and struggle with defining “structural damage.” If appropriate, one could define “structural damage” as “having the same meaning as ‘Structural Damage’ is defined in Florida Statutes Section 627.706(2)(k).” No. you don’t have to have a Florida property to use the Florida Statute for the definition. Even better would be using the information in the statute and writing our own definition. We’re too lazy to do that just now, but that would be our approach. All of that having been said (written?), here is the definition:

“Structural damage” means a covered building, regardless of the date of its construction, [that] has experienced the following:

  1. Interior floor displacement or deflection in excess of acceptable variances as defined in ACI 117–90 or the Florida Building Code, which results in settlement related damage to the interior such that the interior building structure or members become unfit for service or represents a safety hazard as defined within the Florida Building Code;
  1. Foundation displacement or deflection in excess of acceptable variances as defined in ACI 318–95 or the Florida Building Code, which results in settlement related damage to the primary structural members or primary structural systems that prevents those members or systems from supporting the loads and forces they were designed to support to the extent that stresses in those primary structural members or primary structural systems exceeds one and one-third the nominal strength allowed under the Florida Building Code for new buildings of similar structure, purpose, or location;
  1. Damage that results in listing, leaning, or buckling of the exterior load-bearing walls or other vertical primary structural members to such an extent that a plumb line passing through the center of gravity does not fall inside the middle one-third of the base as defined within the Florida Building Code;
  1. Damage that results in the building, or any portion of the building containing primary structural members or primary structural systems, being significantly likely to imminently collapse because of the movement or instability of the ground within the influence zone of the supporting ground within the sheer plane necessary for the purpose of supporting such building as defined within the Florida Building Code; or
  2. Damage occurring on or after October 15, 2005, that qualifies as “substantial structural damage” as defined in the Florida Building Code.”

We haven’t researched the topic, but our guess is that the Florida Building Code is based on the Uniform Building Code.

Readers, wherever you come out on the question, it’s time to concede that, as the Court of Appeals concluded, structural damage cannot be just any damage to the structure. A cosmetic gouge in an exterior, load bearing wall (probably caused by a truck too near) is not structural damage.

As we concluded last June, the problem we who “do documents” have is that there is confusion between “structural” and “structure.” It is our job, as craftspeople, to avoid this confusion because, if we don’t, large costs and unpredictable results will be the outcome.

Today’s posting has two goals. The obvious one is to advance our specific understanding as to what constitutes structural damage so that we can better allocate responsibility for structural repairs in leases. That’s a “micro” goal. Our “macro” goal is less obvious. We wanted to reiterate, and thereby reinforce, one of the constant themes in Ruminations’ postings. And that theme is “let’s know what we are writing about.” If we use terms of art, such as “structural repairs,” we have an obligation to know what constitutes a “structural repair.” If we call for a particular type of insurance policy, we should know if there is really such a policy. Even where there is such a policy, we have a responsibility to each other, and to those we serve, to know what that policy covers and, even more importantly, what it doesn’t cover.

The same is true about HVAC or utility services. And, it is doubly true about “what the law provides.” Attributed to the late Senator Daniel Patrick Moynihan is the following: “Everyone is entitled to his own opinion, but not his own facts.” How is that quotation relevant? Here’s what we think. Let’s negotiate business and deal issues. Let’s not negotiate facts. If you don’t know something, and you aren’t willing to accept “knowledge” from the other side, it’s appropriate to be skeptical and then to research the “fact” on your own. It isn’t appropriate to stonewall and plow on. Ruminations ventures to guess that almost all of our readers know what we mean by all of that and have the wounds and war stories to prove it.


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