___________________________

Belknap

No. 98-257

ROBERT M. AND VIRGINIA V. BERGERON

v.

STATE FARM FIRE AND CASUALTY COMPANY

November 15, 2000

Forman & Bernier, P.A., of Londonderry (Gary H. Bernier on the brief and orally), for the plaintiffs.

Scotch & Zalinsky, of Manchester (Barry M. Scotch on the brief and orally), for the defendant.

DALIANIS, J. The plaintiffs, Robert M. and Virginia V. Bergeron, appeal the Superior Court's (Smukler, J.) denial of their petition for declaratory judgment, see RSA 491:22 (1997), to establish coverage under a homeowners insurance policy (policy) issued by the defendant, State Farm Fire and Casualty Company, for damages sustained as a result of a dam's failure on their property. We affirm.

The following facts were adduced at the hearing. In 1992, the plaintiffs purchased property in Alton, which consisted of a barn foundation, septic system, thirty-three acre pond, and a dam that impounded the pond. The plaintiffs reconstructed the dam. They also purchased a builder's risk policy from the defendant that was later converted into a homeowners policy upon the substantial completion of their home. This policy was in effect on the date of the incident.

On March 13, 1996, the Bergerons' dam collapsed. Several engineering firms investigated the dam's failure and concluded that it failed because of "piping." Piping is the migration of the materials of which the dam is constructed, which creates an open flow, or pipe, within the dam. The dam's design and construction caused it to be susceptible to piping.

The plaintiffs brought a petition for declaratory judgment to determine whether their policy covered the dam's failure. They contended that there was coverage because the dam was a "building" which "collapsed" either from: (1) an "explosion" of part of the dam; or (2) "hidden decay." Each alternative would entitle the plaintiffs to recover under the policy. The trial court found that the defendant had met its burden of proving, see RSA 491:22-a (1997), that the policy did not cover the incident because the dam was not a "building" nor was its failure caused by an "explosion" or by "hidden decay."

On appeal, the plaintiffs contend that the trial court erred by: (1) construing certain undefined terms in the policy, including "explosion," "building," and "hidden decay"; (2) failing to find coverage under the "any resulting loss" section of the policy; and (3) admitting the presentation and related testimony of the defendant's expert regarding whether an "explosion" occurred.

"The interpretation of an insurance policy is a question of law for this court to decide." Bianco Prof. Assoc. v. Home Ins. Co., 144 N.H. ___, ___, 740 A.2d 1051, 1055 (1999). "In interpreting an insurance policy, we take the plain and ordinary meaning of the policy's words in context, and we construe the terms of the policy as would a reasonable person in the position of the insured based on more than a casual reading of the policy as a whole." Federal Bake Shop v. Farmington Cas. Co., 144 N.H. ___, ___, 736 A.2d 459, 460 (1999) (quotation omitted).

Our analysis of the policy begins with SECTION I - COVERAGES, which states:

Dwelling Extension. We cover other structures on the residence premises, separated from the dwelling by clear space. Structures connected to the dwelling by only a fence, utility line, or similar connection are considered to be other structures.

The parties agree that the dam constitutes an "other structure" under the policy. SECTION I - LOSSES INSURED, COVERAGE A - DWELLING, states that the defendant will provide coverage "for accidental direct physical loss to the property described in Coverage A, except as provided in SECTION I - LOSSES NOT INSURED." Therefore, the dam is covered by the policy unless coverage is withdrawn by the "losses not insured" section.

SECTION I - LOSSES NOT INSURED states, in pertinent part, that the defendant

do[es] not insure for any loss to the property described in Coverage A which consists of, or is directly and immediately caused by, one or more of the perils listed in items a. through m. below, regardless of whether the loss 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:

a. collapse, except as specifically provided in SECTION I - ADDITIONAL COVERAGES, Collapse;

. . . .

The parties also agree that the dam collapsed. Thus, we turn to SECTION I - ADDITIONAL COVERAGES, Collapse, which provides that the defendant

insure[s] for direct physical loss to covered property involving collapse of a building or any part of a building caused only by one or more of the following:

a. perils described in SECTION I - LOSSES INSURED, COVERAGE B - PERSONAL PROPERTY. These perils apply to covered building and personal property for loss insured by this Additional Coverage;

b. hidden decay;

. . . .

SECTION I - LOSSES INSURED, COVERAGE B - PERSONAL PROPERTY provides that the defendant will insure "for accidental direct physical loss to property described in Coverage B caused by the following perils, except as provided in SECTION I - LOSSES NOT INSURED: . . . Explosion." Thus, the plaintiffs conclude that the combination of these sections provides coverage for the dam's collapse because the dam is a "building," and its "collapse" was caused either by an "explosion" or by "hidden decay."

The plaintiffs first contend that the trial court erred in concluding that a reasonable reading of the term "building" did not include the dam. Alternatively, they contend that it is at least ambiguous as to whether the term "building" includes the dam and therefore the policy should be construed in favor of coverage. We disagree that a reasonable reading of the term "building" clearly encompasses the dam, see 1 M. Rhodes, Couch on Insurance 2d