C.A. 2nd;
B268850

The Second Appellate District affirmed a judgment. The court held that the impairment of an underground storage tank's structural integrity, resulting from the apparently settling of the tank over time, did not constitute a “collapse” for purposes of the owner's insurance policy.

In 1997, Tustin Field Gas & Food, Inc. arranged to the installation of two 15,000-gallon underground gasoline storage tanks. The installer did not follow the tank manufacturer's instructions to bury them in pea gravel or crushed rock. Instead, the installer just dug a hole, placed the tanks into that hole, and then covered them with “native soil” containing rocks, boulders, chunks of asphalt, rusted pipes, and other debris. The first tank was set atop a boulder with a nine-inch diameter as well as atop pockets of air. The tanks had an inner wall made of steel, wrapped in a synthetic honeycomb and sheathed with an outer wall made of fiberglass. In 2013, Tustin discovered that the fiberglass sheath on the first tank had cracked where it rested on the boulder. The tank's inner steel wall was still intact, and there was no “imminent danger” of rupture, but it was unusable until the sheath was repaired. Tustin paid to have the fiberglass sheath patched, and then filed a claim with its insurer, Mid-Century Insurance Company, for the cost of the repair. Mid-Century denied the claim, finding the damage to the tank was not covered under Tustin's policy, which limited coverage to the “collapse” of a building or structure, including outdoor fixtures and permanently installed machinery and equipment. Tustin sued Mid-Century for breach of contract and related claims.