Insurance won’t cover couple’s destructive wall collapse

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DENVER -- It’s a sight no homeowner wants to come home to: The north wall of their house gone, the interior exposed to the elements of winter.

Cort Cagle and his wife Cody Galloway haven’t been able to live in their own home since November 21, 2014. That’s when an excavation crew digging a foundation next door caused an entire two-story brick wall of their home in the historic Five Points neighborhood to collapse.

State Farm insurance denied the couple’s claim because it said earth movement is not covered.

The couple’s denial letter lists,  “Earthquake, landslide, mudflow, mudslide, sinkhole, subsidence, erosion...or any other external forces" as factors that are not covered by the homeowner’s policy.

"I don`t understand why you have homeowner`s insurance if you aren`t covered for something that is so outside of your control,” Cody Galloway said.

The couple’s attorney, Cass McKenzie, said State Farm is interpreting its policy unfairly.  “It really wasn`t the bulldozer that was the problem, it was the soil that they moved was the problem, that`s a technicality,” complains McKenzie, who added, “If the bulldozer had run into the house and hit it, instead of just moved the soil that was next to it  causing the collapse, then we have a completely different scenario.”

The couple is expecting their first child in March. They had spent the last four years renovating the home at 2438 Glenarm Place just east of downtown.

“Got it to the point where we loved the house and where it was our dream house basically,” said Cagle.

He and his wife had predicted disaster just hours earlier after seeing how close the excavation crew was digging next to their house.

“Even jumped down into the hole and ran up to the excavator and was like, 'You`re crazy. I can`t believe you`re getting this close to my house. Don`t get any closer to my house,'” Cagle remembers telling the backhoe operator.

Cagle’s wife Cody Galloway had emailed the property owner next door, writing, “We are really concerned with this huge hole that was dug yesterday that is literally less than two feet from our house ... our house collapsing is a real possibility.”

Just a few hours after she sent the email, firefighters were called to the home because of the wall collapse.

An attorney for JBC Enterprises, the excavator who caused the accident, said his client won’t release a statement because of potential litigation and insurance claims.

One thing is clear though, JBC Enterprises, won’t face a fine from the city of Denver.

The City’s Construction Engineer, Paul Schaffer, said the accident is a civil matter.  He said the city’s role is simply to provide permits if a contractor submits a shoring plan signed by a state certified engineer.  “It was a shoring failure,” claimed Schaffer who added JBC “didn’t look at the entire plan and follow it.”

Schaffer said he discovered discrepancies in the engineering plan after the fact, but insisted it’s not the responsibility of city reviewers to catch flaws in a shoring plan. “They do not check an engineer`s document. They`re not engineers. They`re residential plan reviewers."

Schaffer said the city only requires its engineers to double check shoring plans for commercial projects. He explained there is no city code for how shoring is done on residential projects. As long as a certified engineer submits a plan, Schaffer said it’s up to the excavator to follow it.

“We do like 20 to 50 a month in this town right now and this is the first time we`ve had a problem with it. It`s really a breakdown in communication of the plan by the contractors,“ Schaffer said.

In the meantime, Cort Cagle and his wife Cody Galloway are stuck paying the mortgage for a house they can’t live in while they also pay rent for a new home.

“Out of pocket on everything until who knows?" said an incredulous Cagle. His wife added even more depressing news, “We`ve heard from a couple of structural engineers that the house is likely not savable.”

The couple won’t be allowed to retrieve their furniture until contractors stabilize it. Even if the couple wins a lawsuit, they insist it will never make them whole.  “How does this happen?” Galloway wondered.

The couple is now considering lawsuits against their next-door neighbor, his contractor, engineer, subcontractor JBC Enterprises and State Farm insurance.