U.S. Appeals Court Finds Loss Due to Fungus May Be Result of 'Hidden Decay;' Remands

SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals remanded to district court a bad faith case concerning fungus damage to a home, finding that the "dry rot" exclusion and "collapse" exception together create an ambiguity that should be construed in favor of the insured to provide coverage. Joseph Glaviano and Jodeanna Glaviano, Plaintiffs-Appellants, v. Allstate Insurance Company, Defendants-Appellees, No. 00-56754 (Ct. App., 9th Circuit).

In an appeal of a district court's grant of summary judgment to Allstate Insurance Company dismissing Joseph and Jodeanna Glaviano's breach of contract and breach of the implied covenant of good faith and fair …