Chadwick v. Fire Insurance Exchange

Opinion

WERDEGAR, J.

Franklin S. Chadwick and Charlene D. Mandel (homeowners) were the insureds under a broad peril homeowners insurance policy issued by Fire Insurance Exchange (FIE). They noticed cracking in their walls, the cause of which was found to be substandard design and construction of the house’s wall and floor framing. FIE denied coverage on the grounds the policy excluded loss from “cracking,” “latent defect” and “inherent vice.” Homeowners sued for breach of contract, breach of the covenant of good faith and fair dealing, and additional tort causes of action. The superior court…