The Denver-based federal appeals court ruled on Thursday that a trial judge incorrectly interpreted the meaning of “sudden” when he concluded an insurance company need not pay for damage to a home allegedly caused by prolonged construction work nearby.

Experts hired by Allstate and homeowner Michael Catalano Jr. disagreed whether the damage to Catalano’s Denver property was caused by age-related deterioration or by the vibrations from heavy equipment working on a sewer. Further, Allstate’s policy on the home indicated it would only cover “sudden” losses.

The question in Catalano’s civil lawsuit was whether the visible defects that appeared one day during the construction were truly sudden, considering how long the equipment had been vibrating the house. A three-judge panel of the U.S. Court of Appeals for the 10th Circuit decided that if sudden were to mean “unexpected and unintended,” then yes, the damage was sudden.

“The phrase ‘all of a sudden’ means ‘very quickly in usually an unexpected way,'” wrote Senior Judge Paul J. Kelly Jr. in the panel’s April 17 order. Therefore, sudden encompasses “both quick and unexpected, not merely one or the other.”

Beginning in August 2020, a construction company worked on the sewer system outside of Catalano’s rental property in the 2900 block of N. Marion St. The tenant described how he would “wake up to the house shaking every day for months.”

In January 2021, the tenant informed Catalano there was new damage to the floor. Catalano filed a claim with Allstate for defects in the foundation and flooring. Allstate’s expert concluded the cause of the damage was “age-related deterioration of the brick mortar and inadequate framing,” which was not covered under Catalano’s policy. Allstate also cited the provision not covering losses from “Earth movement of any type.”

Catalano’s hired expert, however, believed the construction vibrations caused the floor components to move, dislodging the bricks and damaging the foundation. 

Catalano sued Allstate and the construction company in state court. After he settled with the construction company, Allstate transferred the lawsuit to federal court. It sought to resolve the case in its favor by arguing the damage was not sudden and, therefore, it was excluded from coverage.

In a February 2023 order, U.S. District Court Judge Daniel D. Domenico agreed.

“Mr. Catalano’s argument that ‘one day the floors were not damaged, and the next day, they were damaged’ is unavailing,” he wrote. “The construction next to the property had been ongoing for months, and the vibrations it caused were felt ‘every day’ by the renter. The continuous damage done to the foundation by these vibrations is not a sudden loss.”

On appeal, the parties disputed whether sudden meant “in a short period,” as Domenico believed, or “unexpectedly.” The judges and attorneys raised numerous hypothetical examples in attempting to define the word during oral arguments.

“If you think about the last five times you used the word ‘sudden’ in your daily life, it might have been you saw a spider on your ceiling when you were going to sleep,” argued attorney Robert E. Roetzel, representing Catalano. “It would be both instantaneous and surprising.”

“I think sudden could be expected, as well,” said Justin H. Zouski, representing Allstate. “It could be extremely cloudy and, being in the mountains going on a hike on one of the 14ers, you may be aware there is a danger from lightning and storms. And suddenly in front of you, there’s a lightning bolt that hits the ground.”

“I live in the desert and we had 7.5 inches of rain in five hours,” added Judge Joel M. Carson III of New Mexico. “And after this rain, I went out and I saw holes in the ground that I presume were just caused by the saturation. … Something that presumably was going on for a long time, but that manifested itself all of a sudden.”

Ultimately, the panel agreed the meaning of sudden could encompass something quick, but also something manifesting without warning. Kelly wrote that a jury could actually find the damage to Catalano’s home was sudden under both parts of the definition.

“Allstate makes much of the fact that the tenant felt vibrations for months before the loss. However, that does not necessarily resolve whether Mr. Catalano expected (or should have expected) the floor to buckle,” wrote Kelly. “A house near an airport might vibrate every day, yet it would be an open question whether a person might expect damage to result from those vibrations.”

The panel reversed Domenico’s decision in Allstate’s favor, but allowed him to address the insurer’s other argument that the earth-movement exception also applied.

The case is Catalano v. Allstate Indemnity Company.