Thomas L. Burton and Edith M. Burton v. State Farm Fire and Casualty Company

RONEY, Circuit Judge:

This diversity action requires the interpretation of an insurance contract to determine whether the “all risk” policy issued by the defendant excluded from coverage extensive damage to plaintiff-insured’s house incurred when the front portion of the house and a portion of the front yard fell about one and one-half feet into a limestone sinkhole. Reserving judgment on defendant’s motion for directed verdict at the close of the evidence, the district court ruled that the terms of the policy were ambiguous, properly stating that if damage resulted from “settling” the loss…